Tolland resident Leonie Roberson purchased a two-bedroom apartment off-the-plan as part of the Lacrosse tower in Docklands in 2008. 

However, in November 2014 a fire fuelled by flammable cladding from a cigarette caused significant damage to the building.

"Our real estate agent in Melbourne called us and told us to turn on the TV and she said, 'that's your apartment going up in smoke,'" Mrs Roberson said. 

"I thought, oh gosh our retirement plan and funds have gone up in smoke. 

"It was just meant to be an investment for our retirement a few years ago but I've had to keep working because of this situation."

Mrs Roberson's apartment suffered extensive smoke and water damage as her apartment was next to the row of apartments that went up in flames. 

"The builder's insurance company covered the cost of refurbishing the apartment, but we had to cover the internal costs including carpet, tiles and holes in the kitchen," she said. 

"While insurance covered a portion, when the tenants returned they felt it wasn't back up to scratch so we had to fix it before they moved back in and we lost three weeks of rent." 

The Robersons were among 137 Lacrosse owners who took action against the builder, LU Simon, through the Victorian Civil and Administrative Tribunal. 

A review by the Metropolitan Fire Brigade found the building's cladding was not compliant with combustibility requirements. 

VCAT ruled on Thursday that the builder was liable for the flammable cladding and will pay about $12 million in damages.  

However, contractors including the building surveyors and fire engineer must reimburse the builder and pay a further $6.8 million for replacement of the rest of the cladding. 

"It's a bit of a relief as it's been over four years but it's been stressful because we still have to keep paying a loan and our plan was to sell this apartment at some stage and put that money away for retirement," Mrs Roberson said. 

"It has been worrying about the cost of re-cladding because without compensation it could cost us $70,000 for just one apartment on top of all the legal fees. 

"We're lucky this didn't take any lives but it still could be tragic." 

Mrs Roberson said because the building's cladding is non-compliant, she is unable to sell her apartment until new cladding has been laid. 

"It's just bad luck and this could happen to any one because there are still hundreds of thousands of buildings in Australia that have this type of cladding," she said. 

"I didn't even know what cladding was until this happened. We've been lucky to have the same tenants since 2008 but we haven't raised our rent."