Combustible cladding update: A wave of "building product rectification orders" begins

In brief - in the wake of the fire at the Lacrosse building in Melbourne in November 2014, as well as the fire at the Grenfell Tower in London in 2017, relevant authorities in NSW are now at the stage of issuing "building product rectification orders" to owners of buildings affected by combustible cladding

Such orders, when issued,  require building owners to take steps to eliminate or minimise the safety risk posed by the use of a banned building product on the building (i.e. combustible cladding). It is well known that the relevant works (involving project managers, engineering professionals, waste removal and installation of new products) will be an expensive, complicated and time consuming task. 

There is a critical opportunity before building product rectification orders are issued for building owners to make representations about the proposed order to ensure it is workable, enforceable and capable of being complied with. 

Usually, building owners will receive a notice of intention to give an order which sets out the proposed order and timeframe for compliance for comment. In our experience, making persuasive submissions that are adopted by the authority issuing the order are likely to make the process more efficient.

This article provides a brief overview of the combustible cladding situation in NSW followed by general tips about dealing with building product rectification orders.

Extent of the cladding crisis in NSW

As at July 2019, the NSW Cladding Taskforce, in connection with the NSW Department of Finance, Services and Innovation and the Department of Planning and Environment had identified 4,019 public and residential buildings throughout NSW that require assessment for combustible cladding. In the City of Sydney area alone, 350 buildings are said to be at "high risk". 

The financial costs of the rectification works are not yet unknown. Owners corporations are unlikely to have the necessary funds at hand to promptly comply with any building product rectification orders issued. Funding the rectification works is going to be one of a number of issues owners corporations will face during this process.

In response to the crisis in Victoria, the Victorian Government committed to a $600 million package to assist with fixing buildings with combustible cladding. However, no similar package has been announced by the NSW Government leaving building owners in the uncertain position of potentially needing to outlay costs for the rectification works, when a government assistance package may eventuate if the Victorian position is followed.

Building product rectification orders

Once a building is identified as being at risk, the relevant enforcement authority may issue a "building product rectification order" to a building owner under section 20 of the Building Products Safety Act 2017 (NSW) (BPS Act). 

A 'building product rectification order' requires building owners to do such things as are necessary in order to (s 20(2)(a) of the BPS Act):

• eliminate or minimise a safety risk posed by the use in the building of a building product to which a building product use ban applies; and/or
• remediate or restore the building following the elimination or minimisation of the safety risk.

Building product rectification orders can only be issued by "relevant enforcement authorities" which include the local council, with the power of other authorities being dependent on matters such as the type of development and who the consent authority was for the building. See section 16 of the BPS Act. We have also seen circumstances where more than one authority issues a proposed order. In those circumstances, common sense has prevailed and one of the authorities withdraws the notice to avoid duplication.

Notices of intention to give a building product rectification order

Importantly, except in emergencies, notice must be given to the person to whom the proposed order is directed of the following:

• the intention to give the order;
• the terms of the proposed order;
• the period proposed to be specified as the period within which the order is to be complied with; and
• that the person to whom the order is proposed to be given may make representations to the relevant enforcement authority as to why the order should not be given or as to the terms of or period for compliance with the order.

The opportunity to make representations to the relevant enforcement authority on the proposed order should not be dismissed or ignored. Each affected building is likely to have unique circumstances that should be considered against the proposed terms and period of compliance with the proposed order. For example:

• owners may wish to make representations on the time in which the rectification works can reasonably be completed with advice from professionals
• orders that will or are likely to have the effect of making a resident homeless may also trigger obligations on the relevant enforcement authority in terms of arrangements for satisfactory alternative accommodation
• our experience has also demonstrated that the "boiler plate" conditions attached to the proposed order that control the carrying out the physical works may not always be relevant or amenable to what works actually need to occur. Care needs to be taken to avoid being issued with an order and conditions that cannot be complied with

Some building owners may indicate a preference for obtaining a development consent for the necessary rectification works as opposed to receiving an order. However, councils do not have the power to compel those with the benefit of a development consent to act on it. Consequently, in circumstances where there is a safety risk, the relevant enforcement authorities are likely to exercise their powers to ensure more certainty as to the outcome which means issuing a building product rectification order. 

This of course does not prevent building owners from lodging a development application. However, it may be more efficient to rely on the order for carrying out the necessary works. This is because whilst building product rectification orders are issued under the BPS Act, the Environment Planning Assessment Act 1979 (EP&A Act) applies as if the order was a development control order (see section 21 of the BPS Act). Under clause 29 of Part 11 of Schedule 5 of the Environmental Planning and Assessment Act 1979 (NSW), a person who carries out work in compliance with a requirement of a development control order (and by virtue of section 21 a building product rectification order) does not have to make an application under the EP&A Act for consent or approval to carry out the work. There may be time and cost benefits in undertaking the works under the building product rectification order as opposed to making a development application.

The link of building product rectification orders to the EP&A Act also affords those subject to an order the procedural and appellate rights provided by the EP&A Act, including a direct appeal path to the NSW Land and Environment Court in certain circumstances. 

Front ending the work by reviewing the terms of any draft order, early planning about the works needed, discussing the proposed order with the relevant enforcement authority will make this process more efficient and cost effective than those that passively respond to this process.