Buyers of Units Beware

COMBUSTIBLE CLADDING

On the 1st of October 2019 the State Government amended the Building Regulation with the Building and other Legislation (Cladding) Amendment Regulatory.

The changes require all building owners of residential units to complete a checklist by the 29th of March 2019. This is to be done by the body corporate.

Further, after 1 October 2018, Sellers of residential units are required to disclose with an approved form whether there has been compliance with the checklist. This disclosure is to be made to any Buyer of a unit.

The legislation changes are because inflammable cladding has been used in the construction of some unit complexes in Queensland. The cladding poses a possible safety issue where it has been used.

Buildings that have combustible cladding may need to have the cladding replaced with the cost of replacement being paid for by the body corporate (the individual owners of the units).

If a building is affected by combustible cladding, the building owner must display a notice in a conspicuous position in the building near the main entrance. The Seller can provide this notice to the Buyer any time before settlement.

The costs of replacement are likely to be significant and the new owner of a residential unit could become liable for payment of these replacement costs.

At present there is no provision in the standard contract that protects a Buyer if there is combustible cladding in the property being purchased or if the Seller has not made disclosure before the contract was signed.

We recommend that the following special condition be added to the contract before being signed by the Buyer.

“This contract is subject to and conditional upon the Buyer being satisfied within a period of 21 days from the date of this contract with all due diligence inquiries.”

We also recommend that if you getting a building inspection that you ask the building inspector that you engage to investigate the cladding (as a potential fire hazard).