18 March 2020

Fire events in Australia and around the world involving the use of certain types of external wall cladding highlight the need for landlords and property managers to be aware of their obligations in relation to disclosures, as the presence or use of combustible cladding that does not comply with the Building Code of Australia has been found to contribute to rapid fire spread across the facade of the building.   

In Western Australia, the Department of Energy, Mines, Industry Regulation and Safety (DMIRS) – Building and Energy Division (Building and Energy) recently completed a state-wide audit of high risk buildings with combustible cladding. The audit resulted in 52 buildings with combustible cladding being referred to the relevant local government permit authority for enforcement action including the issuing of building orders.  Building and Energy understands that each building owner that has been issued a building order under the Building Act 2011 is required to engage a fire engineer and remediate the combustible cladding. 

When issuing the building order, local governments notified all occupants of affected buildings in writing about the potential dangers of combustible cladding.  However, Building and Energy understands that since the notification was issued by local governments some new tenants who have recently entered into tenancy agreements have not been made aware of the existence of combustible cladding on the building being tenanted.

Landlords have a duty of care under the Occupiers Liability Act 1985 to any persons who may from time to time be on the premises in respect of dangers arising from any failure on their part in carrying out their responsibilities of maintenance and repair on the premises. DMIRS - Consumer Protection Division (Consumer Protection) considers voluntary disclosure to tenants, property managers, agents or sales representatives to be reasonable action in order to reduce the risk of harm. The disclosure should also include the risks associated with the cladding and any remediation requirements that have been ordered by the local government.

Where a property manager or sales representative has been engaged, the Real Estate and Business Agents and Sales Representatives Code of Conduct 2016 requires agents, sales representatives and property managers to disclose “material facts” prior to the execution by a client of any contract relating to the sale or lease of any real estate or business. Consumer Protection’s view is that the existence of combustible cladding on a building would be considered a material fact and should be disclosed to prospective purchasers and tenants.
 
Consumer Protection understands that local governments have required the Council of Owners of a strata complex to formally notify the local government about any interim control measures recommended by fire engineers and to confirm that these measures have been implemented while options for remediation are being considered.  Such measures include ensuring occupiers of the building are fully informed about the risks and measures to manage them.