Over the past month, several reports have emerged about apartment owners being stung by huge costs, and being embroiled in legal battles, relating to dangerous flammable cladding that now must be removed.

Last month, The AFR reported that owners in one Pyrmont apartment complex in Inner Sydney are facing a $7 million bill to have dangerous flammable cladding replaced, with each owner facing a $10,000 levy per quarter instead of the current $3000 for at least five years.

A week ago, owners of the 328 apartments in Melbourne’s Lacrosse residential tower launched legal action against builder LU Simon to recoup an estimated $10.7 million in recladding costs, $1 million in lost rent and emergency accommodation costs and over $500,000 in insurance premium hikes.

Then over the weekend, it was reported that a major Melbourne building company facing millions of dollars in claims for flammable cladding went bust, leaving apartment owners with $3.8 million in rectification costs.

Yesterday, The Age reported that the result of the Lacrosse residential tower case could set a precedent for at least 100 other Victorian buildings where flammable cladding needs to be removed, with the builder admitting flammable cladding is widespread across Australia’s high-rise:



In Melbourne alone, the state government has issued apartment owners with about 100 orders to remove flammable cladding from building exteriors and replace it with suitable material…

Melbourne City Council’s municipal surveyor has ordered removal of the flammable cladding the [Lacrosse] tower is wrapped in to start by September 23.

The owners’ corporation at the 21-storey Lacrosse tower is suing eight parties in all, including builder LU Simon, surveyors Galanos and Gardner Group, architect Elenberg Fraser and fire engineers Thomas Nicolas.

Virtually the only party not being sued in the case is the developer, a $2 holding company registered in 2007 by Morrie Schwartz and a member of the Halim family…

The six-week tribunal case began last week, with 17 barristers and solicitors at the bar table, and at least as many lawyers for various parties looking on in the public gallery.

Evidence tendered by builder LU Simon in its defence shows just how widespread combustible aluminium cladding has become on Australian skyscrapers.

In 1998, one statement tendered by LU Simon said, around 100,000 square metres of one brand of the material was sold. Two years later sales of that brand alone had risen by 50 per cent, and by 2008 there was half a million square metres of the cladding sold…

Lawyers for the owners’ corporation predict work to replace the building’s cladding will cost $17.1 million, while $6.9 million has already been spent as a result of the 2014 fire…

No doubt the defendants will pass the blame with the apartment owners ending up being liable for the remediation works.

Napalm cladding. Total failure by the Building Commission. I foresaw this nearly twenty years ago when certification was privatised.

First thing I read in the Australian media after the initial news on Grenfell ; “nah, wouldn’t happen here, mate. We’ve got the best regulations onna planet”.

It is an excellent reason why any policy support for property investment should be directed to new construction rather than mere acquisition of existing housing.

Investors will be staying a long way away from new apartment builds, too hamstrung trying to refinance the IO loans and stump up the funds to pay for the cladding fix. Going to have an interesting side effect on established houses, but luckily with serious credit tightening in place and falling prices their ability to leverage up the wazoo is gone.Otherwise we’d see house prices take off as apartments plunge.

Pyrmont is $7m over 5 years across 200 units which is $7k additional per unit per year not quarter. I learnt that in MB comments first time this was reported.

– I fear A LOT OF builders will choose to close their companies/subsidiaries in order to avoid giant financial claims. Just simply close one company and open a new building company. Problem solved !!!!

Builds are carried out by special purpose companies (and trusts) for this very reason. It is routine.

http://www.abc.net.au/news/2018-09-07/west-footscray-factory-fire-not-registered-chemical-storage/10201234

Metropolitan Fire Brigade (MFB) was called to a large industrial fire at a factory in West Footscray at around 5am this morning (30 August 2018).

https://www.epa.vic.gov.au/about-us/news-centre/news-and-updates/news/2018/august/30/west-footscray-factory-fire

https://www.theage.com.au/national/victoria/sore-throats-stinging-eyes-coughing-residents-feel-ill-weeks-after-west-footscray-fire-20180909-p502pi.html

I did plumbing and drainage on chemical storage warehouses and one of the choices of site was that there was NO storm water for the very reason of fire and the chemicals ending up in the river … bay

Sounds expensive to get such a purpose-built facility leased. Better just lease aome other warehouse and quietly store drums of chemicals there.

Yesterday we looked at the structural life of high-rise built 40 years ago Most at at the end of that life. What now. For sewers (piping) the design life is also 40 years and for sewage handling (mechanical) the life is 25 years. BAck of the envelope stuff shows about half of the sewage piping systems are at the end of their design life. So plenty of work for u guys yet, But who covers the cost of replacement ??

I use my sewer camera on nearly every jetblast nowdays (good for generating diggups