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Government “must ensure leaseholders don’t pay for safety works” urges Parliament Committee

22 March 2022

TOO MANY leaseholders will fall through the cracks of the Government’s “piecemeal measures” designed to protect leaseholders from the costs of building safety remediation. That’s the view distilled by the cross-party Levelling Up, Housing and Communities Committee in its latest report.

The Committee’s 48-page Building Safety: Remediation and Funding Report responds to the plans outlined by Michael Gove, Secretary of State of Levelling Up, Housing and Communities in his announcement to the House of Commons on 10 January.

The report features a series of recommendations for Government, including calls to:

*scrap the proposed cap on non-cladding costs for leaseholders

*implement a Comprehensive Building Safety Fund to cover the costs of remediating all building safety defects on any buildings of any height where the original ‘polluter’ cannot be traced

*compensate leaseholders for costs already paid out, including for interim measures and for rises in insurance premiums

*require all relevant parties who played a role in the building safety crisis to contribute towards funds for remediation

*ensure the Affordable Homes Programme is protected at its current level and that social housing tenants do not pay the price through costs or diversion of funds away from maintaining their homes or other vital services

Resolving the situation

Clive Betts, chair of the Levelling Up, Housing and Communities Committee, said: “Leaseholders should not be paying a penny to rectify faults not of their doing in order to make their homes safe. Nearly five years after the tragic Grenfell Tower fire, it’s shameful this situation is yet to be properly resolved. While we welcome Michael Gove’s commitment to fixing these issues, we’re concerned that there are gaps in the Secretary of State’s proposals which risk leaving leaseholders to pick up the bill.”

Betts continued: “Leaseholders are no more to blame for non-cladding defects than they are for faulty cladding on homes they bought in good faith. The Government should bring forward a Comprehensive Building Safety Fund, or otherwise upgrade its existing funding plans, in order to ensure that the costs of remediating all building safety defects on buildings where the original ‘polluter’ cannot be traced are covered and that leaseholders are also compensated for costs they’ve already shouldered.”

Further, Betts noted: “The Government should be looking beyond developers and manufacturers to contribute to the costs of fixing the building safety crisis. We recommend the Government identifies all relevant parties who played a role in this crisis, such as product suppliers, installers, contractors and sub-contractors, and legally requires them to pay towards fixing individual faults and ensure that they also contribute to collective funding for building safety remediation. Insurers should also be required to contribute to funds for remediation procedures.”

Buildings versus housing

Interestingly, Betts went on to assert: “The Government needs to stop pitting the building safety crisis against the housing crisis. Social renters shouldn’t be bearing the impact of putting building safety right. The Government needs to act to ensure the tenants of social housing are protected from the costs of remediation. Residents of social housing are currently paying the price through the diversion of funds from maintaining their homes and other vital services provided by housing associations and councils.”

In conclusion, Betts stated: “The Government should also come forward with a cast-iron guarantee that the Affordable Homes Programme is protected at its current level in the event that the Government fails in its bid to secure sufficient funds from industry.”

The report disagrees with the Government that only buy-to-let landlords with one other property should be included in the statutory protections for leaseholders, arguing that there are other options to exclude wealthy property tycoons without making landlords of more modest means liable, and also calls on the Government to publish an impact assessment before it acts.

The Levelling Up, Housing and Communities Committee’s report highlights the ongoing uncertainty around building safety and its significant impact on the housing market and makes several recommendations relating to the EWS-1 Forms process and the introduction of the broader, lengthier PAS 9980 process.

Further, the report also recommends that it should be the Building Safety Regulator, and not building owners, that decides whether a building needs a fire risk assessment and that the regulator should also set the standard any given building needs to meet.