Applications will open at the end of this month (29 August) for owners corporations to apply for a low-interest rate concessional loan of up to $15 million to fund the removal and replacement of combustible cladding.
It’s the latest development in a long-running attempt to remedy issues relating to combustible cladding which was brought to the world’s attention in 2017 with the horrific Grenfell Tower catastrophe.
Some have criticised the ACT Government for taking too long to act on the issue. Most recently, Opposition Leader Elizabeth Lee called on the government to release details of the scheme after what she claimed had been “years of inaction”.
The details of the loan scheme have now been released.
As anticipated, owners corporations deemed eligible after participating in the first testing and assessment phase can apply for a concessional loan of up to $15 million.
The government says there will be no penalties for repaying the loan early, no application or other loan fees and a loan repayment period of 10 years which will start after works are completed. The loans will be fixed at the government’s current borrowing rate of 4.2 per cent.
The scheme will be administered by Lannock Strata Finance and applications will be open for 18 months.
Under the first phase of the cladding scheme, owners corporations were offered a rebate of up to $20,000 to conduct testing and assessment on their building.
This phase received 74 applications from 73 owners corporations for the testing and assessment rebate of the Private Building’s Cladding Scheme. Of these, 62 were approved, six were deemed ineligible, two applications were withdrawn and four are still being assessed.
It was initially believed around 90 buildings in the Territory would have the cladding.
Costs that will now be covered under the concessional loan include the cladding remediation design and works, any ‘make good’ works necessary due to cladding remediation, and regulatory fees, such as building approvals.
Minister for Sustainable Building and Construction Rebecca Vassarotti said the government takes the safety of Canberra residents seriously and is committed to reducing the risk of potentially combustible cladding on residential apartment buildings in the ACT.
“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 a concessional loan scheme to assist with rectification work,” she said.
Ms Vassarotti previously defended the speed of the government’s response. Earlier this year, she said it was important the loan scheme was developed in a way that would deliver the best possible outcomes for all involved.
“We want to ensure the loans are set up in a way that will deliver the best possible outcomes for all involved,” Ms Vassarotti said.
The government says building owners who have already taken out a commercial loan to remediate their cladding before the concessional loan became available will be able to transfer the balance to a concessional loan.
This commitment has been particularly welcomed by the president of the Owners Corporation Network of the ACT Gary Petherbridge.
“That is definitely a positive,” he said.
“Some building owners moved quickly to fix cladding and therefore they were excluded from the government’s scheme. If they can access the loan now, that’s good news.”
Mr Petherbridge said he’s also concerned about insurability for building owners and hopes that, in the future, the government will move to introduce stricter building standards.
“The government is standing by time and time again as owners corporations are forced to pay massive amounts of money to rectify buildings because the certification wasn’t done properly in the first place,” he said.
“When is the government going to provide government certifiers for residential strata buildings?”