On 17 February 2016, the Victorian Building Authority (VBA) released the findings from its audit of the use of non-compliant external wall cladding on buildings. The audit showed a large percentage of buildings did not comply with the Building Code of Australia (BCA) requirements and highlights a potential risk for builders and developers.

Audit Findings

The audit was prompted by a fire in a residential tower at Docklands in late 2014. The fire started on a balcony of the building and spread rapidly up the external façade of the building, due to the use of aluminium cladding on the external façade. The cladding was found to be combustible and therefore not compliant with the BCA for use externally.

The VBA subsequently audited 170 Class 2, 3 or 9 buildings in central Melbourne and identified that 51 percent of the buildings audited were clad with non-compliant external cladding. Importantly however, the VBA concluded that most of those buildings were still safe to occupy because they were sufficiently protected by other fire safety features, with only two buildings requiring urgent remedial works. The report shows the use of non-compliant external cladding is more likely to increase the fire risk to a building where the building has balconies, openable windows or other openings where a fire could penetrate into the building.

The audit report also shows:

  • the BCA requirements for external walls and the certification of building materials are poorly understood by the industry and inconsistently applied
  • decisions as to the use of materials are made by different building practitioners at different stages of the building work without coordination or oversight, which tends to result in non-compliant outcomes
  • the ‘as-built’ documentation showing the materials and methods used by the builders were sometimes inconsistent with the building permit or the permit documents were not sufficiently clear or detailed.

The VBA will continue its audit of at-risk buildings across Melbourne and Victoria, in collaboration with local councils.

Risks for the construction industry

Contractors may face a risk of being found to have breached contractual requirements if they have selected or substituted external cladding materials that did not comply with the BCA. This could potentially give rise to a damages claim if the VBA or a local council orders that remedial work be undertaken to improve the fire safety of the building, such as the retrofitting of balcony fire sprinklers or replacement of the non-compliant cladding. Melbourne City Council has ordered the cladding be replaced on the tower in which the fire occurred, which has been estimated to cost $20 million.

Risk mitigation

Contractors should give careful consideration to the materials specified for a project, including whether materials are BCA-compliant for the specific use for which they are proposed. An industry alert issued by the VBA on 24 February 2016 should provide assistance in this regard. The alert (which can be found on the VBA website) provides guidance as to how the BCA requirements for external wall materials operate, the base on which materials can be deemed suitable for use on external walls and the proper process for assessment of the design of external walls for compliance with the BCA. In addition, regulations have been passed to amend the BCA requirements for fire sprinklers on covered balconies in residential buildings.

Contractors should also ensure both the building permit drawings and documents and the as-built drawings accurately document the materials used in the project.