Strata owners are getting on with cladding repairs, at last

November 8, 2022

Anyone who has ever managed a strata entity through a majordefect remediation project will know that two things are certain. First, progress will be slow. Second, it’s a thankless task.

It’s slow work because of the collective decision-making processes within strata. Getting all owners to agree on anything major is difficult. You’re contending with  multiple personality types and the different circumstances of the owners, who have nothing in common except co-ownership of floors walls and ceilings.   

It’s thankless work because, in most cases, owners are out of pocket and inconvenienced. Those that put in the hard yards to get the best possible outcome become  frustrated at the lack of appreciation of their work by their co-owners, who contribute little(if anything) to the process. With this frustration, relationships become strained. Questions raised late in the piece can be misunderstood as slights when none was intended, and right to the end and even beyond successful completion of repair works, grudges can be held. The Office of Project Remediate will be experiencing these things right now. Project Remediate (PR) is a NSW state government-funded service that provides advice, free finance and other services to eligible owners corporations that have had their occupation certificates issued despite having combustible cladding found not to meet the standards prescribed by the National Construction Code.

Project Remediate saw a slow start. But according to the latest information available from the NSW Building Commissioner, David Chandler OAM, NSW strata owners are beginning to take up the bundle of packaged goods and services provided by Project Remediate to replace their combustible cladding.

When I last spoke with the Commissioner just over one week ago, 65 % of eligible buildings had committed to PR, and some early figures were in on the total cost of rectification to owners. The numbers are encouraging -

·    140 owner’s corporations committed to the project to date.

·    215 eligible Class 2 apartment buildings are involved.

·    30 – 40 may have gone alone in undertaking rectification. Perhaps 25 of them may be eligible for retrospective compensation (the disqualifier being those that have not done a proper whole wall rebuild).

·    20 – 30 further sites may join ProjectRemediate following the recent extension to 16 December 2022, which was granted to enable uncommitted Owners Corporations to consider.

·    Remediation costs range from$1465 to $1835 m2 depending on site-specific issues. These figures include remediation of other previously hidden non-cladding related defects, triage/investigation, design, superintendence, warranties, and quality assurance by a panel of qualified selected experts. Approximately 10-percent of projects will experience higher costs due to a range of site-specific complexity.

·     Negligible cost overruns so far are limited. In one of Project Remediate projects, overruns were $15,000 to$20,000 on a $930,000 job compared with a project that could have qualified for PR where the contracted cost increased from ~$1.0 M to $1.7M due to poor scoping.

The Project Remediate package has been carefully and thoughtfully developed, as I have written about before. It provides away forward for owners corporations with members with different financial resources to meet their financial responsibilities as property owners. It also means that owners can be confident that he repairs work has been done correctly. However, I’ll note – when push comes to shove, the bulk of the costs will be worn by strata owners to simply to get back what they thought they had bought in the first place. And for that, most will never be thankful.

Michael Teys

Strata expert

Michael is a strata expert with over 30 years experience in strata law and management. He is a strata researcher with City Futures Research Centre UNSW, a consultant to strata industry suppliers, and conducts executive education for strata managers and property processionals.