The Ministry of Housing, Communities and Local Government has provided the following answer to your written parliamentary question (145263):
Question:
To ask the Secretary of State for Housing, Communities and Local Government, with reference to his Department’s press release, Government announces it will fully fund unsafe cladding removal in social housing, published on 16 May 2018, what assessment he has made of the effect on residents in mixed-use developments who are (a) leaseholders or (b) are in shared ownership. (145263)
Tabled on: 17 May 2018
Answer:
Dominic Raab:
The Government will fully fund the removal and replacement of dangerous Aluminium Composite Material (ACM) cladding on buildings owned by councils and housing associations, with costs estimated at £400 million. Some of these buildings will contain leaseholders and shared ownership properties. In the social sector, all of those local authorities and housing associations with whom we are in discussion with have indicated that they are choosing not to pass on the costs of the remediation of cladding systems to individual flat owners within their buildings. The Secretary of State made it clear that he considers this is the right approach.
In the private sector, building owners are responsible for making buildings safe. We have been clear we think they or the developers of the buildings should pay and not pass costs on to leaseholders, either funding the work themselves or looking at alternative routes such as insurance claims, warranties or action to ensure those responsible for erecting unsafe cladding pay. Leaseholders can challenge the costs in courts if they are unreasonable.
The answer was submitted on 22 May 2018 at 16:37.
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Certainly the right thing to do and great news for public sector tenants. Unfortunately, this makes the government’s strategy on private buildings look even more threadbare. As a layman with literally one or two exceptions as with ground rents there doesn’t seem to be any indication that freeholders and developers will voluntarily shoulder the costs. To do so would undermine the prime leasehold principle that freeholders have all the benefits of ownership but none of the responsibilities. Suggesting that leaseholders deal with this in the courts which are stacked in favour of the freeholders compounds the problem.
Certainly the right thing to do and great news for public tenants. Unfortunately, this makes the government’s strategy on private buildings look even more threadbare. As a layman it seems with literally one or two exceptions, and as with ground rents. there is no indication that freeholders and developers will voluntarily shoulder the costs. To do so would undermine the prime leasehold principle that freeholders have all the benefits of ownership but none of the responsibilities. Suggesting that leaseholders deal with this in the courts which are grossly stacked in favour of the freeholders further compounds the problem.
Gary, with the greatest respect to you, there no such ‘prime leasehold principle’: There are a lot of older leases, such as my own, that appear to favour the leaseholders, not the freeholder. They date from times when, in a buyer’s market, houses could not be sold if they were the least bit awkward. Favourable lease terms were bought and paid for, up front, many of them from local authorities developing ‘houses for resale’ under the Housing Act 1957. Old local authorities derived housing repair costs from central government, so they put nothing by, for future repairs.
The difficulty, even with such ‘favourable’ leases, is that the landlord-biased legal professions categorise them as ‘defective’, trying their hardest to break contracts while pretending not to – e.g. by selling the freehold then pretending that lets them out of the contract. (It does not).
In this way we have two sides to the problem: Lessors who claim their leases are ‘unfair’ (once they have spent all the sales income); and, more commonly, Lessees who say they were misadvised or had no option but to sign unfair leases.
For “Paid for by the Government” it should read “Paid for by the tax payer”.
Once again the innocent leaseholder has been left to fend for themselves!
Michael I agree entirely it should read
Government announces that TAX PAYERS will fully fund unsafe cladding removal in social housing, published on 16 May 2018,
that was precisely my thought. The tax payer, ie working people who may not even own a flat but rent may have to pay for this. Whats new here? the rich getting richer…
If the leaseholder I.e. taxpayer will pay for this local authority and housing association cladding why can’t the government pay for the private sector cladding ? This would end uncertainty and worry for many. Let’s see equality of treatment for all leaseholders.
I agree that private lessees should also be covered for the cost. They had no part in the original installation and bear no blame.
Can someone please pick up the baton and run with it?
I suggest that the Building Regs/BRE etc [The Government] bear primary responsibility where the developer complied with Building Regs are the time.
But in turn, the ‘high insulation’ panels having to be used in accordance with the 2010 EU energy efficiency regulations are ultimately the reason why foam sandwich versions were used.
Therefore, let the Government petition the EU for all the costs of rectifying all the faults for all lessees and tenant, and get back some of our huge net annual contribution.
C’mon LKP – your next fight commences….
It should fall on to either building control for allowing such products to be fitted or on the shoulders of the manufacturer which in the first instance be met by their indemnity insurers. All manufacturers of any note will have such cover
Perhaps the government should take on the problem and then take the appropriate legal action for recovery to ease the burden on the tax payer.
This present problem acts like a lightening conductor bringing through it all the other negative issues surrounding leasehold
Leasehold is wracked with negatives. I have direct experience of these. I look forward to its abolition.
chas asks stephen from your posting on May 29, 2018 at 3:44 pm
It should fall on to either Building Control (BC) for allowing such products to be fitted or on the shoulders of the manufacturer.
Stephen if the products were not acceptable to BC for use in High Build Flats – why would manufacturers produce them and advertise them as being acceptable.
something has happened in the past many years that has lead to this product being seen as acceptable, when it was known that it was not acceptable over a certain height?
You say the government should take on the problem.
Whose money is the government Stephen?
The Freeholder gets little mention in this posting why?
I noticed your comment regarding a lightening conductor bringing through it all the other negative issues surrounding leasehold. The negative issues regarding leasehold begins and end with the Landlord/Managing Agent does it not???
A couple of points. My earlier comments were directed to newer residential leases and new builds which seem to have more problems. I take the point about buildings control and manufacturers and would add developers to the list. All are keen to claim credit for design awards, energy efficiency, or units sold but run a mile in the event of problems. In the case of pushing for redress from these bodies shouldn’t that responsibility reside with the freeholders otherwise what’s the point of them other than creaming off profits. Clearly leaseholders are not best positioned to do this. The fact that the government are having to intervene speaks volumes about the defective state of leasehold and sorry state of buildings regulations, inspection and enforcement. The UK’s housing market is totally broken and the cladding and leasehold scandals are just two examples of numerous failures. Meanwhile, those with the power to drive good practice continue to make fortunes on the back of the misery they’ve caused.
Gary Dowding says
May 29, 2018 at 5:53 pm
Gary – Your comments regarding newer residential leases.
Having been a leaseholder since 2006 I will confirm that the old leasehold has been a real problem for 30 years and is now being overtaken by the Leasehold Housing Scams.
As a retired Building Control Officer, part of the role was to check drawings/plans that they complied with Building Regulations at the time.
If you see how many drawings/plans had been passed on what is now considered unacceptable, then something very wrong occurred in both the design and testing procedures.
I agree the Freeholders should be the ones to push for redress from these bodies, problem is many Freeholding companies are off shore and do not want identities revealed and known.
I also agree the government having to intervene speaks volumes about the defective state of leasehold and very poor Managing Agents, and the sorry state of building regulations, inspection and enforcement.
To add to Gary and Chas’s comments:
Building controls? Our estate had not even gone though the detailed Planning Permission process. Such process normally results in permission for “housing and associated garages”. The lack of PP resulted in unrestricted re-sales of garages beneath three of the houses, to people who live outside the estate. When our freehold was sold, at auction, without notice to us, we held meetings that included garage owners. We then realised that the buildings had not been insured for years, and that garage owners had been refused buildings cover. The block as a whole, with houses above, was uninsured! All this organised by a good Labour-run council Lessor: – one that promises to tackle and prosecute rogue landlords!
Housing Associations and local authorities are as bad as any other freeholder and managing agent.
Even worse they have exemption from the Freedom of Information Act to hide their mistakes and incompetence from public scrutiny. Yet another need for reform that was shelved by Government.
So why does this incompetent Government pay our money to the public sector and not pay for cladding for all leaseholders. Where is the logic, consistency and fairness for the many.