Finance Property Combustible cladding removal costs leave Melbourne apartment owners in a bind

Combustible cladding removal costs leave Melbourne apartment owners in a bind

Apartment owners are being forced to have cladding removed because government's budget for the project is too small. Photo: The New Daily
Tweet Share Reddit Pin Email Comment

Anais Wood saved up for years to buy her dream home, but it quickly became one of the worst decisions of her life.

The 26-year-old moved into her apartment in Melbourne’s south-east last year, but two months later she was told the building was covered in combustible cladding, which could cost hundreds of thousands of dollars to remove.

Months after the Victorian government set up a body to foot the bill for cladding rectification works, Ms Wood will have to get rid of the dangerous material at her own expense.

She received a letter from her council that stated she had five months to remove the cladding it described as a “danger to life”, or she faced criminal conviction.

Michelle Wood (left) and Anais Wood (right) stand close together outside Anais Wood's apartment building.
Michelle and Anais Wood are shocked at how much money they need. Photo: Bridget Rollason, ABC News

But the organisation set up to support building owners in her position, Cladding Safety Victoria (CSV), said Ms Wood’s situation was not dangerous enough to qualify her for compensation.

“I didn’t even know what cladding actually meant when I received the notice,” Ms Wood said.

It took me years to find what I was looking for. I finally found my perfect home but basically from day dot it’s been a nightmare.’’

Ms Wood’s mother, Michelle, has been trying to help her daughter deal with the stress and confusion.

“It was pretty upsetting for her having bought her first apartment and to be faced with something like this – we had absolutely no idea of the costs or to what extent the building was covered in cladding,” she said.

“We are going to have to come up with the funds to have this cladding removed because we’ve been told we’ll get absolutely no funding at all, because there just isn’t enough money to cover everybody.”

The outside of an apartment building with combustible cladding.
A local council called the cladding on this building a “danger to life”. Photo: ABC News

Michelle Wood said they had received one quote for $40,000 for the removal, and another quote for the same project for more than $200,000.

“It’s very stressful because we don’t know if we are going to be ripped off,” she said.

“Morally we don’t believe we should have to fund it. It’s not the owner’s problem that the cladding was put on there – you rely on the correct authorities to make the right decisions in relation to the building and building materials.”

Retiree faces loss of super to fix cladding

In July, the Victorian government announced a $600 million package to fix buildings with dodgy cladding.

It set up CSV to oversee the process.

A new building levy, which could see permit costs for apartment developments in Melbourne rise significantly, will come into force on January 1 to cover the costs of the cladding removal program.

But many home owners still cannot get compensation, with councils threatening court action if they do not fork out for the repairs.

Graham Arvidson sold his family home of 37 years to retire to a townhouse near the beach at Carrum, in Melbourne’s south-east.

A few months later, he learnt it was covered with combustible cladding and was assessed to be a high-risk building.

“It’s greatly devalued our property,” Mr Arvidson said.

“Rather than the superannuation we have worked hard for to be used to live, we’re going to have to pay for the replacement of the cladding.”

Graham Arvidson stands in front of a wall outside his property wearing a t-shirt and cap.
Mr Arvidson thinks it’s unlikely he’ll be compensated. Photo: Bridget Rollason, ABC News 

Mr Arvidson received a letter from his local council demanding the cladding be removed by December 22, or he would face huge fines.

He has requested an extension because he is yet to hear whether CSV will cover the costs – which he said was unlikely given his building was not in the highest risk category.

He is particularly worried about his safety during summer, as many neighbouring properties host barbecues over the festive season.

CSV has since said Mr Arvidson would qualify for assistance, but Mr Arvidson said he was still waiting to be told whether he would receive compensation and, if so, how much.

Homes with lower-risk cladding told to sort it themselves

CSV plans to remove combustible cladding from 100 buildings a year, for the next five years.

Chief executive officer Dan O’Brien said there simply was not enough money to go around to cover every building in Victoria that has the cladding.

“We can’t deal with all buildings, so we are dealing with the highest-risk buildings,” Mr O’Brien said.

“The intention for us at this point in time is to focus on financial assistance for the higher-risk buildings.

“Those in the lower-risk categories are expected to undertake the works and fund it themselves.”

The government has identified 15 buildings to be fixed first using the taxpayer funds, but has not revealed which ones.

“Those who don’t have buildings listed as extreme should work with their local council to see what needs to be done to meet the terms of the building notice,” Mr O’Brien said.

“It’s a difficult situation, but if it’s lower risk it probably means less needs to be done to make the building safer.”

It is not known how many buildings with the cladding will not qualify for compensation funding, but a statewide audit has identified more than 850 properties deemed to be between extreme and moderate risk.

The Opposition’s planning spokesman Tim Smith said it was unfair home owners had been left in limbo over Christmas.

“These people, through no fault of their own, are caught up in this terrible situation and now they’re being told that they can’t be helped by the government,” Mr Smith said.

“Despite the fact the councils are telling them the building they live in is a danger to life, CSV and the Andrews Government say it’s not dangerous enough and you have to pay.

I just don’t think that’s fair.’’

Mr Smith said $600 million was not enough funding and the real cost of removing cladding from buildings in Victoria was more like $2.2 billion.

“The government said they’d help everyone that was caught up in the cladding crisis,” he said.

“Instead they’ve said ‘you’re on your own’.”

Housing and Planning Minister Richard Wynne referred the ABC’s inquiries back to CSV.


View Comments