Lithium-ion batteries in strata buildings

How to manage e-bike use & enjoyment against the risk of explosion & fire from lithium-ion batteries

Owners and occupiers of strata buildings are increasingly asking about what to do to prevent fires caused by exploding lithium-ion battery powered household products, including eBikes, eScooters and eTools. These products are injuring people on a weekly basis globally and there has been fatalities and multiple injuries in Australia. They are often cheaper, lower quality, and not subject to the higher standards and laws that apply to, for example, batteries in vehicles that must be road registered such as cars and motorcycles.

A ban is not feasible. Nor is it desirable. When powered by renewable energy, these products provide an environmentally clean form of power, and a pathway to meet net zero greenhouse gas (GHG) emissions.

What is desirable is a greater awareness and appropriate insurance, government regulation and building by‑laws to protect all occupants using strata buildings.

ACCC urges consumers to use and store lithium-ion batteries safely

In October 2023 the Australian Competition & Consumer Commission (ACCC) urged consumers to “use and store lithium-ion batteries safely to prevent deadly fires”.

Some of the ACCC’s key warnings are:

• Batteries can explode if they are used, charged or disposed of incorrectly or if they are damaged.
• Fires caused by the batteries can be dangerous and difficult to extinguish.
• Battery fires may cause serious injuries, including burns, chemical exposure and smoke inhalation, as well as property damage.

Over the last five years, the ACCC has made 23 recalls relating to lithium-ion batteries affecting an estimated 89,000 products on the market. By 2026, it is estimated that a household will have on average 33 products powered by lithium-ion batteries.

A survey of more than 4000 Australians found 54 per cent of respondents used aftermarket chargers and 39 per cent did not know how to correctly dispose of lithium-ion batteries. Many respondents said they leave products unattended while charging.

There is no relevant government regulation yet

The ACCC recommended Australian state and territory governments create a harmonised electrical regulatory framework and establish consistent requirements for the testing, labelling, transportation and storage of lithium-ion batteries.

There is no relevant government regulation yet. It is not yet known if or when this framework will be established, or whether it might also include matters relating to the use and disposal of such batteries. Nor is it known whether it will provide guidance or protection to strata occupants.

A September 2023 NSW Parliamentary Committee enquiry is considering more than 20 submissions made to it in relation to the risk and management of fires caused by batteries in electric and hybrid vehicles, including eBikes and eScooters. A government response has not yet been provided.

Why take action now?

Fire and Rescue NSW consider Lithium-ion batteries are the fastest growing fire risk in New South Wales, with 149 battery-related incidents between January 1 and September 15, 2023 – a 16 per cent increase on the same time in the previous year. Of these incidents, 22 per cent involved e‑mobility products – a 94 per cent increase on the same period the previous year.

In addition to potentially saving a life or avoiding serious injury, a submission to the NSW Parliamentary Committee enquiry states that the average financial cost from fires caused during the charging of power tools and vacuum cleaners was $160,000. One claim resulted in a warehouse fire that caused $3.8 million worth of damage.

Will insurance cover us?

The Insurance Council of Australia has recommended that occupants ensure that their insurance policy provides sufficient coverage to rebuild or replace the building and contents in the event of a fire, consider the rising cost of building materials and adjust coverage accordingly.

Some strata building by‑laws impose requirements for “top up” or higher insurance coverage for items generally described as “dangerous goods”. This may implicitly or expressly include e‑bikes or similar products that use lithium‑ion batteries.

What action might we take?

As an increasing number of these products and batteries are put in use, it is in the interests of all occupants that they together:

• Use, store and recharge safely: Improper storage or e-scooters and e-bikes pose a fire hazard and may lead to an insurance claim being denied. In general, store these devices in a well-ventilated area away from flammable materials, and avoid charging them indoors.
• Arrange safe battery disposal: It is important that there is adequate infrastructure for safe battery disposal. Owners can check www.recyclemate.com.au and www.bcycle.com.au for information about safe disposal.
• Review insurance coverage: Ensure insurance policy provides sufficient coverage to rebuild or replace the home and contents in the event of a fire. Consider the rising cost of building materials and adjust coverage accordingly. Some apartment buildings or body corporates may impose specific insurance requirements.
• Review building regulations: A review of building by‑laws and the introduction of a by‑law to assist with these actions and follow up reviews. Strata by-laws do not normally require any of these actions to be taken, even if they already include a by‑law dealing with bicycles.

Further information

Your Strata + strata manager can provide further information these matters.

About the author

Brendan Maier is a partner in the property and development group at Colin Biggers & Paisley. Brendan provides high quality legal advice on commercial, industrial, residential, tourism and agricultural projects throughout Australia. He is a leading property lawyer who enjoys applying his industry knowledge and networks to drive commercial value for his clients. He has been recognised in Legal 500 Asia Pacific and Doyle’s Guide, he was elected as a councillor of the Urban Development Industry of Australia (NSW) and as a councillor of the Royal Agricultural Society of NSW.

Brendan regularly publishes legal articles on current trends and prepares government submissions on policy issues affecting his clients and the Australian property industry more generally. Brendan was admitted as a solicitor in the ACT in 1997 and in NSW in 2000. He is admitted to practice in the Supreme Court of NSW, Federal Court and High Court of Australia.