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The territory government has announced a loan scheme to assist with the rectification of combustible cladding on private buildings in the state.
The Private Building Cladding Scheme will assist owners’ corporations with the upfront costs of conducting the replacement or removal of such cladding, with eligible owners’ corporations able to apply for a low-interest rate concessional loan from 29 August 2022.
The three types of combustible cladding that are of concern are aluminium composite panels (ACP), expanded polystyrene systems (EPS) and biowood, with all of these able to burn rapidly once lit and melt at relatively low temperatures.
Administering the concessional loans on the territory government’s behalf is Lannock Strata Finance, which will provide stable and reliable financial loans to ensure owners’ corporations can be remediating their cladding.
“The ACT government takes the safety of Canberra residents seriously and we are committed to reducing the risk of potentially combustible cladding on residential apartment buildings in the ACT,” Minister for Sustainable Building and Construction Rebecca Vassarotti said.
“We recognise the challenges faced by apartment building owners to address combustible cladding without assistance, which is why we have provided financial support firstly with our testing and assessment rebate scheme and now with concessional loan scheme to assist with rectification work.”
In order to qualify for the scheme, a building must either:
- Be a multi-use or solely residential-use building
- Have at least three storeys under the National Construction Code
- Be a class two apartment building or involve a cluster of buildings
- Or, for applicants other than those seeking retrospective access, be reasonably judged by the owners’ corporation to have cladding, which may be combustible cladding.
To date, there have been 74 applications received for the testing and assessment rebate of the Private Building’s Cladding Scheme; 62 of those have been approved, with the remaining 12 either withdrawn, deemed ineligible or still being assessed.
Eligible owners’ corporations who have participated in the scheme’s initial testing and assessment phase are now able to apply for a concessional loan with:
- A fixed-interest rate at the cost of governing borrowing, which is currently 4.2 per cent
- A loan repayment period of 10 years, which starts after the works are completed
- No application or other loan fees
- Individual loans generally up to $15 million per owners’ corporation
- No penalties for repaying the loan early
Costs covered by the loan initiative include the cladding remediation design and works, any “make good” works necessarily due to cladding remediation, and regulatory fees such as building approvals.
Applications will remain open for 18 months, providing eligible owners’ corporations with the chance to apply for the scheme until 29 February 2024.
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