Following the Grenfell Tower fire in June 2017, which killed 72 people in the West London community, governments around the world have taken a stand against combustible cladding.
Last year, the Victorian government contacted owners with flammable cladding on their property to instruct them to remove it immediately.
Later in the year, the government put together a $600 million package to help those who needed to replace cladding with the cost.
But some cladding is classed as not dangerous enough, which means those property owners have to remove it at their own expense and do not qualify from state support.
That was the situation Anais Wood was in, not long after the 26-year-old bought her first apartment in Melbourne’s south-east, she received a letter saying she had to get rid of the cladding at her own expense, or face criminal convictions, the ABC reported.
Lannock Strata Finance has noticed the hardship many landlords have been put in, and he wants to bridge the gap between government support and the total cost of replacing the cladding for strata owners.
“For those owners still in limbo waiting to hear if they will qualify for compensation from the Victorian government, a Lannock Strata Loan will allow owners to resolve occupational health and safety issues as quickly as possible,” Lannock CEO Paul Morton said.
“This is particularly important for the many owners corporations which have already received notices from local council to rectify the defective cladding within a few months or face criminal prosecution.”
As this situation puts owners in a hard place to finance the project, Lannock wants to help fund the work quickly without owners having to dip into their mortgage.
“Later on, if their property does qualify for government assistance, owners corporations can use these funds to repay the strata loan early – without penalty,” Mr Morton said.
It has been estimated the total repair bill for all Victorian apartments could be up to $1.6 billion, he said.
“To fix all buildings affected and raise this money to make the repairs may take years, but through a strata loan, owners can have the problem fixed immediately, rather than wait for the government processes to provide funds,” he said.