Private housing – who should pay to remove Grenfell-style cladding from shared buildings?

The Grenfell Tower Fire was undoubtedly one of the most horrific events in housing history and highlighted the importance of not skimping on cost when it comes to tenant safety,

A year on, and many similar buildings remain unsafe, despite the fire having wide-ranging implications for other buildings.  It is only right and proper that after the event, social landlords were inspecting their buildings and putting plans in place to replace the unsafe cladding blamed for the fast spread of fire and resulting huge loss of life.

However, not all flats and apartment blocks are owned by social landlords – so when defective cladding is on a private building, who is responsible for meeting the costs of removing and replacing it?  The leaseholder, the freeholder or the original developer?

At present, this is unclear – and while debates rage about who should foot the bill, many residents continue to live in buildings deemed unsafe.

Manchester Evening News have this week reported that freeholder Pemberstones is taking hundreds of Manchester City Centre residents to a tribunal to see who should foot the bill.  Residents expect to be asked to pay around £10,000 each, in respect of removing and replacing defective cladding similar to that used at Grenfell.  The remedial work is yet to take place, and the residents have not yet seen any estimates for carrying out the work.

More than 300 leaseholders at Vallea Court and Cypress Place, located in Manchester’s Green Quarter are fighting their their case at a tribunal after freeholder Pemberstone is expected to demand £3m following investigations carried out in the wake of the London blaze.  The buildings are clad with dangerously flammable material similar to that used at Grenfell Towers.  The cladding clearly needs to be replaced, and the Freeholder believes leaseholders should foot the bill.

The freeholder is pursuing the matter through a tribunal.  Leaseholders have sought crowdfunding for legal advice but did not raise enough to fund a lawyer during the hearing itself, and residents claim to have had no support from official bodies.  Their current legal position remains unclear.

Marketing consultant Katie Kelly, who bought her flat from the developer four years ago said:

“Not only are big businesses failing to do the right thing, they are happily putting over 300 people’s lives at risk,” she said.

“Pemberstone haven’t even got full quotes for the work to present to us – yet we’ve been informed that we will have to cover the costs of the tribunal, including Pemberstones’ own legal representation!

“The question they asked the tribunal to rule on, is whether our leases state that remedial works are to be covered by leaseholders via service charges – which of course they do.   The question being asked is obviously unfair.  It is also a complete waste of time, money, and is creating additional stress for residents.”

Residents claim that a copy of the introduction letter sent by Lend Lease to a purchaser – who had bought their flat directly from them – states that ‘Lend Lease will undertake, at our expense, to complete any accepted defect that has arisen as a result of either faulty materials or defective workmanship’ and the buildings are understood to still be under warranty.

However, residents are uncertain as to whether their insurers will meet the costs of removing and replacing the cladding, the Freeholder believes the Lessees are responsible and the Developer, Lend Lease has, say residents, remained silent.

Leaseholders say they have no idea what will happen if they lose the tribunal and are left literally unable to pay the money.

A spokesperson for Pemberstone said:

“The tribunal is a well established forum to which either landlords or leaseholders can apply to establish clarity on an issue that affects the management of a residential building and its service charge.”

“We believe an independent decision from a tribunal would be in the best interests for all concerned and should allow us to establish a clear way forward.

“Our property managers Livingcity are in regular contact with apartment owners and have been providing regular updates.

“Over the past year they have sent out nine letters to all leaseholders explaining the latest position and have issued responses to at least 78 individual enquiries.

“They have an office on site and a web portal on which they post information.

“They also hold regular residents’ meetings including one in February attended by over 100 individuals.

“We regard the safety of the residents as of paramount importance and we are continuing to work with the technical teams to achieve the best possible solution.”

A spokesperson from Lendlease told Manchester Evening News:

“Safety is our top priority. We were not aware of the tribunal, until yesterday, and are now investigating these issues.”

A spokesperson for the Ministry for Housing, Communities and Local Government and Housing said:

“Nothing is more important than keeping people safe.  We have been clear we want to see private sector landlords do the morally right thing and not pass on the costs of essential cladding replacement to leaseholders.  We are keeping the situation under review and have not ruled out any options.”

Councillor Suzanne Richard, Manchester City Council’s executive member for housing and regeneration, called for more clarity from the Government:

“Issues around leaseholders being put in a position where they are picking up the financial burden for failed cladding is going to become more and more prevalent as private building owners try and offset the costs of remedial works.  The safety of residents in high-rise properties is paramount, but leaseholders are being put in an unfair situation – potentially an untenable financial position – and I would urge government to provide some clarity around this growing problem.”

The tribunal is expected to take around six weeks to report back and the decision is eagerly awaited.

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