Legal Insights

Cladding Rectification Agreements: What does it mean for councils?

By Branevan Shankumar

• 30 July 2018 • 1 min read

Last week the Victorian Government introduced into Parliament the Building Amendment (Registration of Trades and other matters) Bill 2018. As part of the reforms, the Local Government Act 1989 will be amended to create Cladding Rectification Agreements.

Upon recommendation by the Victorian Cladding Taskforce, the Andrews Government has introduced into parliament last week as part of the Building Amendment (Registration of Trades and other matters) Bill 2018, a mechanism to reduce the cost of removing dangerous combustible cladding in Victorian residential buildings.

The mechanism, known as Cladding Rectification Agreements (CRAs), will be an agreement between owners (or owners corporations), lenders and local councils whereby owners are provided a long-term, low-interest loan to pay for the building work required to rectify the combustible cladding.

Under the CRA, the owners will pay the funds back through their council rates over a minimum period of 10 years with the CRA transferred to any subsequent purchaser of the property if it was sold during that period.

Similarly to the existing Environmental Upgrade Agreement, Councils are likely to play a role in the administration of CRAs and therefore will need to establish robust policies and procedures for these agreements.

The Bill is expected to be released to the public on Tuesday 7 August 2018.

Details of how the new regime will work will only be clear once the Bill is released, at which time we will update you once again.

If you would like more information about the impact CRAs will have on your municipality, contact Maddocks on (03) 9258 3555 and ask to speak to a member of the Construction and Projects team.

Click here to read more about what the new CRAs mean for developers and builders.

Need legal advice on combustible cladding issues?

Contact the Construction team.

By Branevan Shankumar

  • Share

Related capabilities


Construction & Projects

Related sectors


Infrastructure

Related services


Construction

Related articles

Online Access