Cladding Safety Victoria: How to Protect Yourself When Buying a Melbourne Apartment

Combustible cladding is one of the most serious financial risks in the Melbourne apartment market. It's also one of the most invisible — there is no public database you can check to confirm whether a specific building is affected. If you buy an apartment without knowing its cladding status, you may inherit a liability that runs to six figures.

The Scale of the Problem

The Victorian cladding crisis became visible after the Lacrosse building fire in Docklands in 2014, and was internationally underscored by the Grenfell Tower disaster in London in 2017. The hazardous materials — Aluminium Composite Panels with polyethylene cores (ACP) and Expanded Polystyrene (EPS) — are highly flammable and were extensively used on Class 2 residential apartment buildings of three or more storeys constructed after March 1997.

The Victorian Cladding Taskforce identified thousands of potentially affected buildings across the state. The state government established Cladding Safety Victoria (CSV) and allocated $600 million to a rectification program. As of mid-2025, CSV had funded and managed rectification for over 440 privately-owned apartment buildings, covering approximately 20,000 individual homes.

That sounds comprehensive. It isn't. Thousands of affected buildings remain. Not all are eligible for CSV funding. For those that don't qualify, the cost of removing and replacing the cladding falls entirely on the Owners Corporation — and therefore on the individual lot owners as a special levy.

Why There Is No Public Register

One of the most frustrating realities for buyers is that CSV is legally prohibited from making its list of affected buildings publicly available, citing privacy legislation.

You cannot simply look up an address on a government website to check cladding status. The onus is entirely on the purchaser to discover the risk through their own due diligence during the contract review process.

This is not a bureaucratic gap that will be closed — it's the current law. Every apartment buyer in Melbourne must treat the cladding status of any building constructed between 1997 and approximately 2015 as an active unknown that requires specific investigation.

What the Section 32 Must Disclose

Under Victorian property law, vendors must disclose all material facts that could influence a buyer's decision. For cladding, the key disclosures should appear in the Section 32 Vendor's Statement:

Municipal Building Orders: Any compliance notice or order from the local council requiring the removal or replacement of non-compliant cladding. These notices are legal instruments and must be disclosed if they exist.

Building Permits: Details of permits issued in the last seven years. Permits issued for cladding rectification works indicate the building has been (or is being) addressed. Permits issued for other works may still reveal the building's vintage and construction method.

Owners Corporation Certificate: This is the most important document. The OC certificate must disclose current levies, proposed special levies, and any contingent liabilities. A building that has received a cladding notice but hasn't yet passed a special levy should still have the notice disclosed in this document. A building with active litigation against the developer or builder regarding cladding or fire safety must disclose this.

AGM Minutes: The minutes of recent AGMs often contain more detail than the formal OC certificate. Look for any discussion of cladding audits, pending building orders, insurance difficulties, or changes in premium levels. Insurers increasingly refuse to cover or impose enormous surcharges on cladding-affected buildings — if the AGM minutes show the OC struggled to renew insurance or faced dramatically increased premiums, that is a cladding signal.

When a Vendor Fails to Disclose

If a vendor knows about cladding issues and omits them from the Section 32, this constitutes a material breach of the Sale of Land Act. The buyer has potential grounds to rescind the contract before settlement.

However, enforcement requires proving the vendor knew about the issue at the time of sale. Proving knowledge can be difficult if the cladding was identified after the sale. Legal action is costly, slow, and uncertain. Rescission is only available before settlement — after settlement, you own the problem.

The practical lesson: do not rely on the legal system to protect you after the fact. Your protection is the due diligence you conduct before signing.

What to Do When the Section 32 Is Silent on Cladding

Silence in the Section 32 is not clearance. A Section 32 that doesn't mention cladding could mean the building has no issue, or it could mean the vendor hasn't disclosed one. In any apartment building constructed between 1997 and 2015, proceed as follows:

1. Search the SRO/CSV registers for the building address — while no public register exists for all affected buildings, the Residential Cladding Rectification Register maintained by the Department of Treasury and Finance lists buildings enrolled in the CSV program. Being listed there is a disclosure; not being listed doesn't clear the building.

2. Engage a building inspector with cladding assessment experience — a qualified inspector can assess the visible external cladding materials and identify ACP or EPS products. This doesn't replace a full engineering review but provides a practical screen.

3. Contact the Owners Corporation manager directly — before auction, your conveyancer or solicitor can write to the OC manager requesting specific confirmation on whether any cladding notices, building orders, or insurance issues related to the external facade have been received or discussed.

4. Check the building's insurance documentation — ask your conveyancer to obtain the current OC insurance policy. If the building is carrying an enormous excess on fire-related claims, or has excluded certain perils due to cladding risk, that's information you need.

The Financial Consequence of Getting It Wrong

The worst-case scenario is buying an apartment in a building where CSV declines to fund rectification, the OC passes a special levy to fund the works themselves, and your share of that levy is $80,000 to $120,000. This is not hypothetical — it has occurred in Melbourne apartment buildings, including in well-regarded suburbs.

A special levy of this magnitude, on top of your existing mortgage, can make the property genuinely unaffordable to hold. The resale market for a cladding-affected building is severely constrained — buyers conduct the same due diligence you should have done, and they discount accordingly.

The Victoria Investment Property Guide includes a full cladding due diligence checklist covering Section 32 review, OC certificate analysis, AGM minutes interpretation, and the specific questions to ask before bidding on any Melbourne apartment built between 1997 and 2015.

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