Insurance & Reinsurance
Building on the momentum from the recently imposed ban in NSW on the use of certain aluminium composite panels under the Building Products (Safety) Act 2017 (NSW) on 15 August 2018, two new cladding regulations affecting owners of existing and new buildings have been introduced by the NSW Government which take effect from 22 October 2018.
The first piece of regulation is the Environmental Planning and Assessment Amendment (Identification of Buildings with Combustible Cladding) Regulation 2018 (NSW) (Cladding Regulation), which requires owners of certain buildings with external combustible cladding to register their building with the NSW Government through an online portal.
The Cladding Regulation contains a new definition of "external combustible cladding" in relation to a building as follows:
The above cladding types are subject to the requirements of the new Cladding Regulation. In addition, the Cladding Regulation also contains new provisions that require the referral of certain 'alternative solutions' (under the Building Code of Australia) involving external combustible cladding to Fire and Rescue NSW.
The Cladding Regulation applies to the following building types (both existing and new) of two or more storeys:
Owners of the above building types which are identified as having external combustible cladding subject to the Cladding Regulation must register their buildings with the NSW Government through their new online portal. The details required for registration include the name and address of the building owner, the address of the building and a description of any external combustible cladding applied to the building.
The registration deadline for buildings occupied prior to 22 October 2018 is 22 February 2019. The registration deadline for buildings that are yet to be occupied is 4 months after the building is first occupied.
In conjunction with the introduction of the Cladding Regulation, eight State Environmental Planning Policies (SEPPs) will be amended on 22 October 2018 under the State Environmental Planning Policy Amendment (Exempt Development – Cladding and Decorative Work) 2018. The object of the amendments to the SEPPs is to reduce the risk of non–compliant, combustible cladding being installed on buildings without any independent expert assessment or approval by an accredited certifier or the local council.
Under the amendments to the SEPPs, cladding, re-cladding and decorative work can no longer be carried out as exempt development on certain buildings (such as dwelling houses that are more than two storeys, apartment buildings, commercial buildings and industrial buildings). For other buildings, cladding or decorative work that is proposed to be undertaken as exempt development (i.e. without planning or building approval) must not involve the use of external combustible cladding, as per the new definition in the Cladding Regulation.
With the increasing obligations on building owners in NSW in relation to the use of external combustible cladding on buildings as part of these reforms, the nature and scope of the duty of care of building owners and suppliers of cladding is likely to increase.