Defects and cladding help deadlines looming

There are two very important deadlines coming up for strata schemes in NSW – both on June 30, this year and both demanding immediate attention from affected schemes.

In one, called Project Intervene, if you are a strata manager or part of an owners corporation with a residential building that has serious defects – you might be able to get them fixed for free.

The other program – Project Remediate – gives buildings with flammable cladding problems an opportunity to get retrospective assistance if they started remediation work before the state’s Project Remediate program was in place.

Project Intervene

This program is designed to help owners corporations get developers or builders to fix serious common property defects in buildings that are still under statutory warranty.

Under the program, the NSW Department of Customer Service prepares an agreement (an undertaking) between the developer and OC, then provides experts, such as supervisors to ensure the work is done properly and to current standards.

The remediation work and associated costs are then covered by the developer, not the owners corporation. 

That said, to qualify, there are two basic conditions that must be met:

1. The building must be no more than six years old (still under statutory warranty) and more than four storeys high
2. The developer or the builder must still be operating (to be able to pay for the remediation). 

Applications close on June 30 so if you think your building qualifies, check with your strata manager or starta secretary to make they are aware that, if they haven’t already done so, they need to visit the Project Intervene page  as a matter of urgency.

Retrospective cladding assistance

Owners corporations that began cladding remediation work on, or before, 30 June 2021 may be eligible for financial assistance as part of Project Remediate.

Retrospective assistance is available to eligible owners corporations that have: 

1. passed a strata resolution to enter into a contract for cladding remediation work on or before 30 June 2021, and, 
2. agree to the terms set by the Office of Project Remediate, which includes the alignment of all cladding remediation work with the scope of work supported by Project Remediate. 

Retrospective assistance will apply to the same scope of work as Project Remediate, that is cladding remediation and directly associated façade repair work.

You can apply for retrospective assistance by reading the information below, completing the form, and providing documentation. All registrations of interest by owners corporations will be assessed to determine if the building is eligible and the status of any works undertaken.

What is retrospective assistance?

Retrospective assistance makes financial assistance (including an interest-free loan) available to those owners corporations that began cladding remediation works before Project Remediate was available.

According to information provided by the NSW Department of Customer Service, eligible owners corporations can either:

1. Receive a lump sum payment equivalent to the interest that would have been paid by government under Project Remediate. This amount will be based on the interest cost to government of a Project Remediate loan for the same amount spent by the owners corporation on eligible remediation work, or, 
2. If the owners corporation borrowed funds using a strata loan, the loan can be refinanced with an interest-free loan provided through Project Remediate. Any refinancing, early repayment or ‘break’ costs will be paid by the owners corporation. If a portion of the borrowed funds was used for other purposes, only the amount used for cladding remediation may be refinanced.

A combination of these assistance arrangements may also be applicable in some circumstances.

Eligibility

• Your building must be a residential apartment building (Class 2) in NSW. This includes multi-use buildings, for example part commercial/part residential, and, 
• your building must be confirmed by the NSW Cladding Taskforce to have had a high-risk combustible cladding façade requiring remediation, and, 
• your owners corporation must have passed a strata resolution to enter into a contract for cladding remediation work on or before 30 June 2021.  

Strata support payment

Any owners corporation that receives retrospective assistance is eligible for the $10,000-$15,000 strata support payment as if it were in Project Remediate. The payment amount is calculated based on the number of residential lots in the strata scheme. Click on this link to read more about the strata support payment.