Victorians are to be granted a two-year extension to pursue legal action against builders responsible for installing combustible cladding on their homes.

The new Cladding Safety Victoria Bill increases the time limit on compensation claims from 10 years to 12. The extension applies to all claims expiring between July 16 last year and 12 months after the new legislation commences.

“Apartment owners are in this situation through no fault of their own and it’s only right they have as much time as possible to pursue compensation through the courts,” Planning Minister Richard Wynne said.

“We’re leading the world in responding to this international problem and helping to ensure those who have done the wrong thing contribute to the cost of fixing their mistakes.”

The Victorian Government says it is also pursuing legal action on behalf of owners in the most serious cases, where the state pays for rectification costs and the builder is found to have a case to answer.

The legislation will also formally separate Cladding Safety Victoria (CSV) from the Victorian Building Authority and establish it as the responsible authority for delivering the Cladding Rectification Program, a $600 million package to fix buildings that have combustible cladding.

CSV has been set up to work with building owners, owner corporations and the building sector to rectify buildings and make them safe.