Further help for Leaseholders with Costs of removing Cladding

27 July 2022
Sarah Mansfield, Legal Director

From Tuesday 28 June 2022, the leaseholder protections in the Building Safety Act 2022 came into force providing further help for Leaseholders with Costs of removing Cladding.

Qualifying leaseholders are offered much greater protection and, in many cases, will pay nothing to remove dangerous cladding, and the amount they can be asked to contribute to fixing other historical building safety defects is firmly capped.

Before qualifying leaseholders are asked to contribute to these costs, landlords must now provide a formal legal certificate, or demonstrate that the costs do not relate to works covered by the Act. The Act includes a number of schemes to protect non-qualifying leaseholders from remediation costs, if remediation is needed or is ongoing as with many developments.

Who benefits?
A qualifying leaseholder who lives in a building above 11 metres (or 5 storeys) which is their main home, or they own no more than three UK residential properties in total, should not pay any outstanding invoice for historical cladding or non-cladding building safety costs that were caused during the construction or refurbishment of the building as they are now protected from all cladding-related building safety costs. This Act is designed to help those living in flats or those who have one or two flats as a pension for example, it is not to designed assist serial landlords.

Leaseholders will no longer be expected to pay to remove dangerous cladding, and the amount that can be asked for as a contribution for fixing other historical building safety defects is firmly capped. The Act does, however, suggest a ceiling of £175,000 so there still many Leaseholders concerned the Act will not assist them. We await guidance to see if this concern is addressed.

Any existing invoices are no longer valid, and any landlord or agent who seeks to enforce them could be committing a criminal offence. Again, guidance is awaited.

Before a landlord can charge any historical non-cladding costs, they will need to fulfil a series of financial reporting requirements, otherwise the Act requires them to pay all building safety costs in full, with no charges at all for leaseholders. We again await the detail.

If you do not fulfil these criteria there are other routes for Non-qualifying leaseholders. Firstly, you should check whether the developer of your building has signed the Building Safety Pledge with developers. If they have, then the developer will be paying to fix all life-critical fire-safety risks, including non-cladding defects. If the developer or an associated company still owns the building, then they will also be completely liable for the repair work.

Where an assessment following guidance suggests that work is necessary to make your building safe, then funding schemes may be available so the freeholder or landlord may still be able to apply to the Building Safety Fund, the next phase of which will open shortly for buildings over 18 metres.

In addition, a new scheme for buildings over 11 metres tall, is to be funded by developers through the Building Safety Levy with further guidance will be set out in the coming months.

New Building Safety Regulator
Central to the Act is the appointment of a new Building Safety Regulator within the HSE. The regulator will have to approve higher risk residential projects over 18m at the planning application stage and at initial building control stage. This will assist in preventing problems repeating with future buildings. Designs for such projects will need to be submitted to the new regulator at ‘gateway’ points. The regulator will have the power to freeze projects if safety is compromised.

New Homes Ombudsman
There are plans to create a New Homes Ombudsman to be set up for new homes, essentially to resolve complaints over defects from home buyers to protect the from costly legal disputes which is some benefit to new build homeowners.

Finally, for those wishing to claim back costs and damages from living in defective buildings, Retrospective liability is extended to 30 years. The act amends the Defective Premises Act (DPA) so that it covers refurbishment and other works in addition to new dwellings and extends the time period for compensation claims for retrospective work from six years to 30 years.

Next steps are for the guidance to be published and to hope that the recent change in Government will not cause unnecessary delay in implementing these changes.

If you have any concerns relating to the removal of cladding and would like to arrange free half hour consultation with a member of our litigation team, please contact us on 01244 356 789 or email info@cullimoredutton.co.uk.

Please note: This is not legal advice; it is intended to provide information of general interest about current legal issues.

 

Sarah Mansfield
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