Home Loan - 70% LVR on Apartment with Exterior Cladding

My home loan from NAB only wants to provide 70% LVR due to the Cladding installed in the apartment exterior. They want certification from the builder or strata that it is compliant. Unfortunately the the apartment is 15years old and the builder no longer exist.

Is this normal or someone experienced this?


  • +4

    Its not necessarily normal but its fairly new requirement.


  • +1

    This is now the new normal

  • yes it's up to the bank's due diligence / risk mng

    gov auth is currently collecting reports from strata on all bldgs w/ such cladding

    the strata would have ordered for investigation with report done submitted to the relevant auth

    once the list is out, the unit with affected cladding will see 30% drop over & on top of cooling market conditions

    ozzie is so slow & behind all these that it takes years for gov auth to react

    current buyers are buying affected unit without knowing the value its' paying for.

  • I searched the internet and I saw that non compliant Cladding replacement can cost from 40-60k per unit. This for sure will affect the apartments value.


  • My solicitor wants my broker to ask the bank if certificate of occupancy is sufficient because getting certificate of compliance for the cladding may take weeks if not months. But I am concerned to take the risk.

    • I'm assuming you've already signed the contract.

      You should ask your lawyer if:
      (a) you can walk away from the deal (if this risk/cost is a deal breaker for you)
      (b) renegotiate a lower price to account for the costs and uncertainty of removing the cladding.

      1. Doubtful. OC do not usually go into detail about external cladding.

      2. I wouldn't take the risk if you can still back out. But that's a big "if".

    • I signed the contract but its not dated. I think it means the contract of sales is not yet valid. I feel lucky that i was able to know this issue before commiting with the purchase. personally I will not take the risk buying property with out that cladding certification.

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