15 Feb, 2022

A ‘guarded welcome’ to government’s answer to ‘who pays’ for cladding removal

A leading property agency has welcomed government plans for new laws to protect leaseholders living in apartments from exorbitant costs by forcing industry to pay to remove cladding.

But MetroPM has pointed out that the legislation could be very subjective, will be closely considered by all and could result in costly court battles.

The comments follow tough new laws unveiled by Michael Gove, the secretary of state for Levelling Up, which could result in any developers and product manufacturers who do not help fix the cladding scandal to be blocked from the housing market.

MetroPM said this was “good news” as the government’s guarantee that no leaseholder living in medium or high-rise buildings will have to pay a penny for the removal of cladding will now be enshrined in legislation.

Ian Smallman, a director at MetroPM, a residential property management company with national coverage with offices in Birmingham and Cheltenham, explained that leaseholders are now only expected to pay a capped amount towards non-cladding costs.

Mr Smallman said: “We welcome the confirmation that no leaseholders will be burdened with the cost of remediating cladding.

“However, a cap will be applicable for non-cladding related works and some leaseholders will be excluded from obtaining funding – the devil is in the detail.

“These new powers will allow cladding companies to be sued and subject to fines for defective products, as well as the protections for leaseholders being extended to cover other fire safety defects.”

The controversy arose after the Grenfell fire, which killed 72 people in 2017, when flammable cladding and other fire safety defects were discovered in hundreds of blocks of flats across the UK.

The government had already promised to pay to remove cladding in taller buildings, and the planned legislation means leaseholders in buildings between 11 and 18 metres will no longer be expected to pay.

Mr Smallman said: “Under the proposed legislation, building owners may be expected to pay for building safety defects and will be means tested.

“But building owners are unlikely to have been involved in the design and construction of the development, which means this will be subjective and challenged as freeholds were acquired in good faith from developers, being signed off by Building Control.

“Leaseholders, however, will be protected by a cap, set at similar levels to ‘Florrie’s Law’ which applies to some repairs to social housing.

“That cap will be £10,000 for homes outside London and £15,000 for homes in the capital, which will limit how much leaseholders in this scenario can be asked to pay for non-cladding costs, including waking watch charges.

“The legislation will mean buy-to-let landlords with one rental property are covered, in addition to their principal home, if that is within an affected building.

“But buy-to-let landlords with more than one rental property may not benefit from the proposed legislation.”

Mr Smallman added that the new laws were likely to lead to various costly litigation, but that the fact they were being designed to protect leaseholders should be welcomed.

Established in 2006, MetroPM provides day-to-day estate management services to a growing number of developers, freeholders and resident management companies in the Midlands and South West.

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