Developers to remove unsafe high-rise cladding

Huge victory for leaseholders as Michael Gove to force developers to remove unsafe cladding or put them out of business.
High-rise cladding repairs

Leaseholders have been handed hope after the government announced how it plans to make manufacturers and developers pay to replace dangerous cladding. In tough-talking measures, property companies and manufacturers will be blocked from the housing market if they do not act.

Many property owners have been effectively trapped in their homes unable to sell after it was discovered cladding on their building was unsafe in the wake of the Grenfell Tower fire. Many building owners (freeholders) have tried to pass on the cost of repairs to leaseholders, with some facing bills of more than £200,000, despite structural maintenance being the responsibility of the freeholder.

Developers or landlords owning a building worth more than £11 million will be forced to pay the entire cost to fix historic building safety issues. And where a building owner doesn't have the resources to pay, there will be a cap in place for what leaseholders can be charged—£15,000 for London and £10,000 in the rest of England.

The government said this should only be needed for a small number of cases.

The proposed changes to the Building Safety Bill will also see the cap cover non-cladding costs such as charges for "waking watches" to patrol sites.

Anything a leaseholder has already had to pay out for changes will count towards the cap, preventing them from needing to pay more.

Under the proposals, the Department for Levelling Up, Housing and Communities said building owners and landlords will be able to take legal action against manufacturers of products used over the last 30 years which have been found unfit for use.

The government also wants to bring in a building safety levy—paid for by developers—to more developments.

While leaseholders are grateful for the measures, they said there was still a long way to go before issues were settled and they can rest easy.

Jenni Garratt, of the End Our Planning Scandal group, who lives in a building more than 18 metres high in Sheffield, said:

"Up until now all of the support, all of the focus has been specifically on removal of cladding, so the fact Michael Gove is now saying that developers, freeholders in the first case, will be pursued to fix the non-cladding defects, to be completely honest I called my parents and cried. I was so taken aback by how much of a 180 change this has been.

"It's not right that innocent people should be paying anything towards this, but I can't escape the fact that up until now the unwritten cheque that was hanging above my head could have been £50,000."

Liam Spender, a trustee of the charity Leasehold Knowledge Partnership, was told he and his fellow leaseholders would have to pay for changes to the 14 metre high building he lives in.

He said:

"We were never given a figure, we were just told we'd have to pay whatever they asked for. So it could potentially have been huge. I could have easily been looking at low to mid-tens of thousands to do the work".

"I think there is a sense of relief. It's cautious, it's tempered, because I know how complicated the legislative intervention is."

Michael Gove, Secretary of State for Levelling Up said: "It is time to bring this scandal to an end, protect leaseholders and see the industry work together to deliver a solution.

"These measures will stop building owners passing all costs on to leaseholders and make sure any repairs are proportionate and necessary for their safety.

"All industry must play a part, instead of continuing to profit whilst hardworking families struggle."

Erin Yurday

Erin Yurday is the Founder and Editor of NimbleFins. Prior to NimbleFins, she worked as an investment professional and as the finance expert in Stanford University's Graduate School of Business case writing team. Read more on LinkedIn.