Canberra home and apartment building owners have finally learned the details of the ACT Government’s Private Buildings Cladding Scheme this week, after waiting more than a year for an announcement.
The long-awaited details of the concessional loan includes:
- A 4.2 per cent fixed interest rate
- A loan repayment period of 10 years, which starts after works are completed
- No application or other loan fees
- Individual loans generally up to $15 million per owners corporation
- No penalties for repaying the loan early
Costs covered under the loan include cladding remediation deign and works, any ‘make good” necessary works, and regulatory fees such as building approvals. Lannock Strat Finance will be administering the scheme on behalf of the government.
The ACT Government revealed $50 million has been put aside for owners corporations to remove any combustible cladding. Minister for Sustainable Building and Construction, Rebecca Vassarotti, said if the scope of the government’s investment needs to be re-evaluated, “that’s exactly what we’ll do”.
“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,” Ms Vassarotti said.
Of the 74 applications submitted to date from 73 owners corporations, 62 have been approved, six have been deemed ineligible, two have been withdrawn, and four are being assessed.
The concessional loan details within the scheme have raised eyebrows of some ACT stakeholders, with the Strata Community Association (SCA) (ACT) expressing relief at the announcement but are “concerned” by the lack of details.
SCA (ACT) president Shelley Mulherin, said the association was “really glad to finally see progress on this front after waiting for a long while to see the details of the concessional loans promised by the government”.
Ms Mulherin said she was especially concerned with the possible long-term implications of a 4.2 per cent fixed interest rate and will be pushing for more details during further conversations with Minister Vassarotti.
“We’re still disappointed that the government did not initially lead an audit of private buildings, and that the need for OCs [owners corporations] to self-identify may have led to underreporting of dangerous cladding in the Territory, so we want to make sure we see this through until we know the scheme inside out,” she said.
Canberra Liberals leader Elizabeth Lee said the ACT Government has sat on the scheme for far too long and there’s a “very significant risk” there will be buildings in the ACT which will be left unrectified.
“This is a life threatening issue that is impacting people’s homes. They’ve [ACT Government] known about this risk, this is a known risk in our community, and they have known about it for at least five years, if not more,” Ms Lee said.
“It was over a year ago that this Labor-Greens government announced that it will establish a concessional loan scheme, and homeowners have been waiting for over a year just to find out what the details of that scheme will be.
“We know that Equity Economics in 2019 did a study that indicated that almost 160 homes in the ACT may be affected, and we know that the take up of interest in the scheme has been less than half.”
Applications will be open for 18 months, allowing eligible owners corporations to apply until 29 February 2024.
For further details about the concessional loan, visit Major Projects Canberra.
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