And housing associations need to help shared-owners
The senior MPs who are chairs of the APPG on leasehold have told the government today that freeholders should pay for cladding remediation or pass the freeholds on to the leaseholders living in the blocks.
The message comes from Sir Peter Bottomley, Father of the House, Sir Ed Davey, leader of the LibDems, and Justin Madders, who are also the patron MPs of the Leasehold Knowledge Partnership.
It is addressed to Lord Greenhalgh, the housing minister responsible for cladding issues and leasehold.
The initiative marks a contrast with the current direction of government thinking.
Its consultant on the financing of cladding remediation, insurance businessman Michael Wade, has proposed finance to follow existing landlord and tenant law.
This means leaseholders pick up the bill – and face forfeiture if they do not pay – with the government structuring long-term loans that it is hoped will appeal to pension investors and similar.
There is no provision that freeholders or developers pay anything at all under Mr Wade’s proposals outlined to date. There is a hope that they might make a contribution, however.
To LKP, this appears to be a return to ministers urging freeholders to “do the decent thing” and pay for their buildings: a forlorn hope that was repeatedly without a single success for two years after Grenfell.
The APPG chairs seek to make the freeholder responsible for the cladding bill, or lose the freehold:
They tell Lord Greenhalgh:
“APPG officers propose that private freeholds should be made to agree to pay for all remediation cladding costs. Failure to do so to result in control of the freehold title passing to the leaseholders.”
In addition, the APPG chairs urge government:
“to require all social landlords to make a substantial financial contribution to remediate the cladding on shared ownership flats.
“The reason: it is not right for innocent financially-stretched lease-renters to have to carry these costs. In appropriate circumstances, government or its agency could reimburse charitable housing providers.”
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Government should have equity stake in cladding freeholds covered by the fund, Hilary Benn MP tells APPG
Brokenshire wrongly says freeholders have paid for Grenfell cladding removal
Brokenshire tells freeholders to pay up to remove Grenfell cladding. But how can that work?
Here is how to avoid dumping the cladding scandal bill on leaseholders or taxpayers
Why is it not the case that the manufactuer of the cladding is not persued for damages and the Government agency that tested the products.
The developer should be given the responsibilty of taking the action against them
I think you are absolutely right, the only problem is that developers and freehold companies have stitched the legal side together so tightly that without legislation they will do exactly what they have done with their ‘custodianship’ in the past….ie …nothing.
I should imagine developers already have the means to take action against them,
but to think that the majority of these scoundrels will hand out their sacred money in order for people who did everything by the rules aided by solicitors and agreed by the owners, will do any such thing is nonsense, don’t you think that enough time has elapsed for them to show they care about their customers? not a chance.
I think it is high time that the legal proffession take responsibility for leaving leaseholders high and dry when something goes wrong but thereagain they seem to have a cosy relationship with the ‘custodians’.
This situation has done one good thing, destroyed trust in solicitors, politicians and corporate companies in general, they are all protected.
If it were any other country where this happened there would be revolution on the streets, but because the British people generally want a peacefull solution the above solicitors, politicians, corporate companies see this as a weekness to be exploited.
Something missing here. Most developments are share of freehold interest held in resident owned management companies. These flat owners own the freehold and bare liability for cladding issues. I bet this wasn’t explained by conveyancers to purchasers.
The Bottomley proposal is a good one long term, but why not an immediate Government cash levy on all freeholders – set at say 10% of lease value per residential freehold owned – to be ring-fenced for building fire remediation not covered by the cladding fund?
Slightly off topic but I have noticed again that the BBC website had a mention on its first ‘Home’ (default) page about the proposed change in leasehold law, this was at 8.00 clock this morning, by around 2.oopm I noticed that it was no longer an item on the Home page and yet other more ‘interesting’ items were in evidence, items which would appeal to those with an interest in entertainment.
But for the ~4.3 million leaseholders some of whom are desperate to receive information as to what will impact their lives in a very serious way would have to search through the pages to find the item in ‘business’ section.
I can’t help think that whoever controls the information seems to have a blind spot when it comes to anything to do with the leasehold scandal and the cladding scandal, in fact blind spot is too kind… they don’t seem to give a **** when it comes to how people in these situations are being de-humanised.
These scandals and the change in the law must be one of the biggest stories that has ever happened to this country and although I understand that Covid must be given airing time, it seems to me that they are using this pandemic to sideline what should be priority national news.
I wait with anticipation to hear if they will give news about one Tory MP wanting to cut back workers rights now Brexit is here, news I heard on LBC which does give time to serious subjects.
While I am at it, can I thank LKP and in particular Martin and Sebastion for their work in highlighting problems caused by the leasehold money for nothing schemes, and how they have managed to keep their self control when faced with people who seem to think that freeholding companies, developers, large building companies are capable of regulating themselfs, .. is something which show what honorable people they are.
This is a really stupid idea, which is why it got no traction previously. First, most freeholds are not owned by the original developers, they are owned by investors totally unconnected to the construction and the defects. Second, the costs of works required are in many cases more than the value of the freehold (and in some cases perhaps 10 times the value) so this will still leave the leasholders carrying much the cost. Is this the best these people can come up with?
I think you’re missing the point. Biggest revenue stream for these so called freeholders is service charge not the ground rent. I live in a 2 bed flat in zone 2 london, My ground rent is £250 per annum, however service charge is eye watering £5K per annum.
LKP’s overall objective (big picture) is to apply common hold system instead of keeping leasehold. Commonhold is the only way leaseholders can be truly liberated from these unregulated service charges. Do you realize how hard is to get Right to manage, you have to convince 50% of your neighbours, otherwise you will never be able to remove management agencies and will be forced to accept any ridiculous service charges etc passed on to you. Not to mention cladding cost will be passed on to leaseholders if legislation is not changed.
System is rigged against leaseholders.
I agree. Service charge is money making scam. Commonhold is the only alternative.
if freeholders pay, costs will be charged to lessees?
cladding was eu/un directive. un should pay