Victorian Cladding Rectification Agreements

Last week, the Andrews government presented to Parliament, on the basis of the recommendations of the Victorian Control Force, a mechanism to reduce the cost of removing hazardous flammable coatings from Victorian residential buildings as part of the Building Amendment (Registration of Trades and other matters) Bill 2018. Applications for building permits “accepted” by an RBS prior to the start are not subject to the new coating disposal tax. For some types of social housing, there will be an exemption from the cladding overhaul tax. Cladding Safety Victoria provides support, advice and links with registered and qualified practitioners. Cladding Safety Victoria also funds remedial work on hundreds of buildings with high-risk cladding to ensure they can be safely occupied in the long term. Amendments to the Construction Act 1993 in the Construction Amendment Act 2019 provide that the building permit tax includes an additional element of disguise tax. This component is referred to as “disguise.” These changes will begin on January 1, 2020. Changes to the coatings elimination tax introduced rebates under the phased permit reassessment authority, for which the total cost of construction is at least $15,625 higher than originally estimated construction costs. Cladding Safety Victoria does not fund construction unless it is directly related to the repair of the cladding to address fire safety risks. This also includes buildings: Cladding Safety Victoria will enter into financing agreements with a proprietary company to ensure that it will be reimbursed for the costs incurred and proposed, necessary to complete the design phase of the correction procedure. An agreed timetable for construction and repayment bricks is being developed, with each owner company proactively seeking to rectify its buildings on a case-by-case basis.

The CSV Act also amends Section 137F of the Construction Act to clarify that Crown transfer fees are triggered when CSV`s financial assistance is paid to the owner of a building. Subsequently, CSV has the right to make all claims against construction practitioners in order to recover the costs associated with the corresponding disguise work. With respect to construction work on Commonwealth Crown land, the current exemption from any tax on building permits, including the new cladding development tax, is maintained. However, this extension applies only to measures that expired on July 16, 2019 (when the Victorian government announced the Disguise Fund), but 12 months after Section 53 of the CSV Act came into force. The design phase focuses on the development of a corrective solution that would result in compliance with construction instructions or contracts. This includes preparing an application to the Construction Appeals Agency (BAB) for approval of the corrective solution. For buildings with construction costs (single-storey project) or for entire work (several phases) of $800,000 or more, the following amounts of the correction rebate tax must be paid. An open pre-qualification system to correct or dispose of flammable coating products in private residential buildings. On July 16, 2019, the Victorian government announced a $600 million package to repair higher-risk private homes with flammable disguises. Cladding Safety Victoria is the world leader in cladding Retification Program. The amendments to the 1993 Construction Act involve a legal transfer of the rights of the owners who received financial assistance from Cladding Safety Victoria to pay for the renovation of the cladding.

Owner companies remain responsible for repairing non-compliant flammable coatings.

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