Proposals For Removal of Unsafe Cladding on Particular Buildings
The government announced recently that leaseholders living in a building between 11 and 18 metres, approximately 4 to 6 storeys high, will not have to meet the costs of fixing dangerous cladding.
Builders have until March 2022 to resolve how to help leaseholders trapped in homes, which are “unsellable” due to cladding risks. It seems the government is to pursue those builders and corporate entities that mis-sold properties with unsafe cladding or in any way cut corners on those same homes.
It is generally accepted that unsafe cladding issues have resulted in many home owners being saddled with insurmountable bills to put right unsafe homes. Previously, home owners in blocks 11 to 18 metres high were ineligible for government support with removing unsafe cladding. But a government sea change sees the retirement of its proposal for loans for medium rise leaseholders. The government asserts that these leaseholders are blameless and it would be morally unfair that they should have to foot the cost of putting right and making safe. The government’s rationale is that manufacturers of combustible cladding and insulation enjoyed significant profits and so must meet the costs instead of beleaguered leaseholders. Basically the moral argument is being put back on these companies by giving them the opportunity to “do the right thing”. But in default, government has inferred that it will legislate whereby these companies will be compelled to put right.
Thousands of leaseholders are contending with an unwelcome mix of fire safety issues, such as cladding with varying degrees of flammability, insulation that is combustible and cavity barriers, which were omitted from the building process. Consequently, these same leaseholders are stuck in worthless, unsellable homes. Also, leaseholders have had to shoulder additional and expensive service charges as a result 24-hour waking watch having to be employed in unsafe blocks. Generally any block reserve fund, usually set aside for major works and essential repairs, have had to go on waking watch costs with the effect of reducing these reserve funds and potentially causing other maintenance and repair issues having to wait. The government’s new plans do not unfortunately seem to cover these non-cladding, fire safety issues or associated costs.
Part of the government’s new plans also include: employing all steps to compel developers to pay; cutting off developer’s routes to government funding and contracts; beefing up planning regulations and/or altering the tax system; and if builders shirk their responsibility, as mentioned above, legislating to compel them to act.
The estimated average cladding bill is approximately £40,000 per leaseholder with some leaseholders receiving even more unwelcome higher bills exceeding £200,000, which is much more than the price paid for their flats. So whilst this new policy will offer some financial relief, not all cladding-issue problems have been solved like the costs of replacing unsafe insulation, putting in adequate fire breaks and balconies, which are now known to be a fire risk as well. So the quest of a lot of leaseholders goes on to ensure buildings are fully safe. Particularly those leaseholders in buildings under 11 metres high with dangerous cladding.
But critically, it is also being proposed that the time limit for leaseholders to issue claims against builders regarding defective properties will be extended in time quite significantly from 6 to 30 years.
So it remains to be seen how the government’s new proposals will be acted upon by property developers and manufacturers and whether leaseholders get total relief. Or whether government will be left with no choice but to legislate and the Court Service, thereafter, sees an increase in claims being brought by leaseholders against property developers and manufacturers.
Our Residential Property Disputes team at Hodge Jones & Allen are highly experienced in this specialist area of the law. If you are in need of legal advice, please call 0808 271 9413 or request a call back.