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 tenants to be aware of their landlords' and real estate agents' obligations in relation to disclosures as to the presence or use of combustible cladding that does not comply with the Building Code of Australia and has been found to contribute to rapid fire spread across the façade 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 cladding 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 where required.

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.

The Real Estate and Business Agents and Sales Representatives Code of Conduct 2016, requires agents, 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. The existence of combustible cladding on a building would be considered a material fact and must be disclosed to prospective purchasers and tenants. The disclosure should also include the risks associated with the cladding and any remediation requirements that have been ordered by the local government. The Code also requires that any agent or representative must make all reasonable efforts to ascertain or verify all facts material to the transaction.

Tenants looking to enter into tenancy agreements for buildings that have external wall cladding are reminded to enquire with agents or landlords as to whether the cladding complies with the Building Code of Australia. Tenants who have concerns that combustible cladding at their residence has not been disclosed to them should contact their local government to determine whether a building order has been issued to the building owner to remedy the combustible cladding.

DMIRS - Consumer Protection Division 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.

The DMIRS publication “Fire safety in existing apartment buildings” includes some information which may be of interest to agents and representatives