Thousands more apartments wrapped in flammable cladding

Australia’s flammable cladding fiasco has just mushroomed with “biowood” also being declared unsafe, and apartment owners now facing millions of dollars in costs to have the cladding replaced:

Thousands of apartment owners across Australia who thought they were safe from potentially deadly cladding fires now face millions of dollars in bills to remove and replace timber-based panels.

In a landmark legal ruling, timber-PVC cladding that was believed to be a reliable alternative to dangerous aluminium composite has now also been declared unsafe.

This puts the widely-used Biowood panelling into the same category of major defects of the kind that caused the catastrophic 2017 blaze at London’s Grenfell Tower in which 72 people died, and the Lacrosse building in Melbourne, where this year owners won $5.7 million in damages after a cladding fire in 2014.

“This will affect thousands and thousands more buildings all across Australia,” said Faiyaaz Shafiq of JS Mueller & Co Lawyers who conducted the case at the NSW Civil and Administrative Tribunal.

“We think this is the first ruling in Australia, and possibly in the world, against Biowood, and it will have consequences for so many buildings that used it, thinking of it as a safe and aesthetically pleasing cladding…

Owners of apartments in buildings out of the six-year claims period, however, won’t be able to sue developers and builders for defects; they will be compelled to undertake the replacement at their own cost.

The bill for removing flammable aluminium cladding was already estimated to be “many, many billions of dollars”, so adding ‘biowood’ to the mess will obviously send the repair bill soaring.

This is an unmitigated disaster for Australia’s growing army of apartment dwellers who, through no fault of their own, are being left with financially crippling repair bills, alongside apartments whose values have been decimated.

When viewed alongside the myriad of structural faults discovered across Australia’s high-rise, it is clear that the whole industry is in crisis and deserving of a royal commission.

With Australia’s population growing like a science experiment due to mass immigration, and apartments now the dominant form of new housing across Australia’s major cities, the industry must be cleaned up urgently.

Leith van Onselen

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

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