There has been plenty of discussion in respect of building safety and cladding in the press in the past couple of years. However, most of this related to buildings over 18 meters in height, and very little has been done to financially assist leaseholders who live in smaller buildings where the same remedial works are identified.
However, on 10 January 2022, Michael Gove (secretary of state for Levelling Up, Housing and Communities (LUHC)), set out his proposals for how he intends to fix the building safety crisis. The content is encouraging for occupants of buildings of between 11 meters and 18 metres. Mr Gove stated that “no leaseholder living in a building above 11 metres will ever face the costs for fixing dangerous cladding”.
At the time of writing there is no detail yet published about how leaseholders will be able to recover costs of carrying out any works. However, the LUHC has written to developers to convene a meeting over the next few weeks, in order to report back at Easter with a fully funded plan of action relating to remediating unsafe cladding in buildings between 11-18 metres. Following those discussions, the Government will announce which companies will need to make funding contributions but expects that the duty will cover all firms with annual profits from housebuilding at or above £10m. More detail here, will follow.
It is expected that the Government will seek to recover up to £4bn from developers towards the costs of replacement of unsafe cladding. If those sums are unable to be recovered, the Government proposes restricting access for developers to funding and future procurement. If the industry fails to take responsibility even then, the Government says it will impose legal solutions if necessary (we are not sure at this stage what those solutions would be). Generally, there is a more proactive approach planned to recoup costs from those who the Government feels are responsible for these issues – this includes a new taskforce who will be looking to expose and pursue developers who have mis-sold products or cut corners in construction.
Other action points from Mr Gove’s speech include an intention to introduce the “next phase” of the Building Safety Fund (the funding for 18m+ buildings) – there is no detail at this stage as to what that involves or when it will be extended. There are also amendments proposed to the impending Building Safety Bill to retrospectively extend the legal right for building owners/leaseholders to demand compensation for safety defects to up to 30 years – the proposal was previously 15 years.
The final proposal is that the Advice Note is also due to be replaced – which is the instruction from the Government that all buildings, regardless of height, needed to be checked, and if dangerous materials are found, they would need to be removed. This is due to be replaced by new guidance that has been developed by the British Building Standards Institute, called PAS9980. This will be used by fire risk assessors to carry out statutory assessments of external walls of blocks under the new Fire Safety Act 2021. It will take a more risk-based approach to danger, and it is hoped it will be more proportionate and will reduce the amount of remediation needed. Whether this is achieved in practice, will remain to be seen.
We shall provide more updates on this once they are available – to include the expected timeframes for payment for remedial work.