Cladding and the private sector: a good first step

There have been rumours of this for a while now, but in the last few mins (9.5.19, 8.30am) the government has announced that it will make public funds available to help fund private sector cladding remediation works. The details (such as they are) are here.

A few immediate thoughts:

1) This is very, very welcome. Most of these blocks contain flats let to long leaseholders and the costs of these works are ultimately falling on them via the service charge.

2) £200m isn’t enough. I have three of these 167 affected blocks on my desk at the moment and between them they’d take 10% of that fund.

3) What about those blocks where the work has already been done? Can there be reimbursement?

4) The scope of the funding is important. It appears to be limited to ACM cladding. But (i) fire safety goes much broader than that – the post-Grenfell world is showing not just ACM cladding issues but also problems with compartmentalisation (i.e. the ability of fire to spread beyond the area where it starts), fire doors, insulation etc. Is that covered as well? (ii) even if limited to ACM cladding, what about the ancilliary costs – the waking watch costs whilst we wait for the cladding to be removed; the professional fees for overseeing the works? A waking watch can be tens of thousands of pounds a week.

5) Is it a grant or a loan? It seems to be a bit of both because it seems that funding will come with an obligation to take steps to recover the costs from the person who put the cladding up. Who will judge if those steps are sufficient? And what steps are expected? Where there has been a change in reversionary ownership since the works were done (very common – you build the building via an SPV and take all the sale proceeds into that SPV and then sell the reversionary interest (and ground rent income) to a third party) what sorts of claims does the government have in mind? And when will the government deal with the elephant in the room, namely that it was the poorly worded Building Regs and Approved Document B that opened the door for this sort of cladding to be used?

6) Who can get the funding? The press-release suggests that building “owner”. The freeholder? The intermediate leaseholder of the whole? An RMC or RTM company?

As I say, this is a very important first step but it leaves a lot still to be answered.

 

About J

J is a barrister in London. He loves service charges and all things leasehold law related. He also likes beating rogue landlords and mortgage companies.
Posted in Housing law - All.

4 Comments

  1. Thinking more about this. Is the exclusion of RTMs and RMCs intentional? If you are doing this by way of grant but with conditions then presumably you need a way of enforcing those conditions. One easy way is by securing your “grant” as a charge on the freehold title. But if you don’t have any title then…

  2. Pingback: Tessa Shepperson Newsround #98

  3. What I find disturbing is that despite full government funding, work has yet to start on 23 social sector buildings.

Leave a Reply (We can't offer advice on individual issues)

This site uses Akismet to reduce spam. Learn how your comment data is processed.