" Grenfell Towers " Long Shadow !

On June 14, 2017 we watched television footage of a London housing tower enveloped in fire as flames consumed its outer cladding, resulting in the death of seventy-one of its residents.   We quickly learned that this became known as the Grenfell Tower tragedy and that many buildings spread across the world were clad in a similar dangerous product.

As we head nearer to the first anniversary of those deaths it seems remarkable that the city of Sydney has 412 buildings that have been identified as clad with this risky product and that 170 of those are residential buildings and 53 are described as high rise.   The people living in those apartments go to bed each night aware that they risk burning to death in a similar manner to that London tragedy.

This week we had a law change to building regulations that covered flammable exterior cladding.  Its presence on a building is now regarded as a " major defect ", giving the unit owner the right to demand rectification for up to six years after the building is completed.  Of course, that supposes the builder is still in business and has the financial capacity to finance the work that needs to be done.

Removing the existing cladding from a building and fitting a replacement can cost an enormous amount of money and it now seems likely that this will be reflected in property prices.  Owners  selling are now offering property subject to a major defect and it is reported that in London one such owner had a $475,000 unit price devalued to just $ 50,000 because of that defect.

The banks and finance houses may also get skittish because it seems doubtful that the insurance industry will insure buildings with this hazard class and most forms of finance require insurance cover as part of the contract.  In particular, buyers who made the purchase on an investment basis will be hardest hit.

Responsibility for rectification is still a legal enigma.  Flammable exterior cladding does not meet the relevant building regulations and that encompasses architects, councils and the building company that constructed the building, plus the supplier who either made or imported the material used.   That could be a nightmare if a contested case goes to court and some unfortunate judge has the job of pinpointing the bunny who has to foot the replacement bill.

Many councils are shivering in their shoes because the building regulations require councils to certify that all new buildings in their area meet the required regulations and to issue a certificate that they are fit for human habitation.  Clearly, buildings with a flammable exterior do not meet that challenge.

It is unfortunate owners who bought their units in good faith who are bearing the brunt of this debacle.  Not only are they living with an unacceptable  fire risk but the very price stability of their greatest asset may crumble before their eyes.   Eventually, the cost of rectification may rest on their shoulders.

This can not be left passing from hand to hand like the proverbial hot potato. Grenfell Tower proved that tragedy can happen and sooner or later luck will run out in another world city.