Page 2353 - Week 07 - Thursday, 4 August 2022
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remediate cladding, such as fire engineers, architects, facade engineers, project managers and builders.
The assistance provided by the government in phase 1 has resulted in apartment owners receiving advice on the level of risk posed by the cladding on their building, the remediation works they can take to better manage fire safety in the building, the estimated cost of these remediation works, and any interim risk mitigation measures that they can take while waiting for rectification to be completed.
This week I announced phase 2 of the scheme, which offers a concessional loan to eligible owners corporations to remove and replace potentially combustible cladding from their buildings. The government has committed $50 million to the scheme. This means that we are providing assistance for the entirety of the remediation process.
The key elements of the concessional loan includes a fixed interest rate, initially set at 4.2 per cent, 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, and no penalties for repaying the loan early.
Owners corporations who have obtained a through the scheme testing and assessment report which indicates that cladding on their building poses a moderate or higher risk will be eligible to apply for a concessional loan. Applications will open on 29 August.
Costs covered under the concessional loan will include the cladding remediation design and works, any “make good” works necessary due to cladding remediation, and regulatory fees such as building approvals. I am pleased to advise that we have engaged a loan administrator to administer the loan on the government’s behalf and provide quality strata loan services to Canberrans. This loan administrator brings extensive experience in providing strata loans and will assist the ACT government to provide a stable and reliable financial loan so that Canberrans can get on with the good work of remediating their cladding.
We understand that cladding remediation and loan administration will be a significant undertaking for owners corporations and executive committees. Under the loan, owners corporations can access up to $10,000 on their loan for administration costs, such as administration support services, tools or additional strata management services related to loan administration.
We have engaged with the community and found that many owners corporations have been proactive in the removal of cladding products from their buildings. We understand that owners corporations have obtained commercial loans at high interest rates, which can place unnecessary stress on unit owners. These owners corporations will be able to apply to transfer those high interest loans to the concessional loan at the low interest fixed rate. This will provide relief to owners corporations and individual unit owners who have been proactive in remediating their buildings.
Hardship provisions for individual owner-occupied units have been developed and will provide relief to unit owners who may not be able to service their loan repayments. This will provide relief to these individuals and provide certainty that the
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