Building safety update following latest Government announcement

London City

We welcome Michael Gove’s latest announcement that sheds further light on how building owners can ensure that buildings are safe, while ensuring that leaseholders are not left having to shoulder the financial consequences.

The main focus of the announcement was on how the Government plans to ensure the safety of 11-18 metre buildings including remediating unsafe cladding. In a big change to previous policy, the Government has adopted the principle of ‘polluter pays’, something we have long since supported. It helps to bring greater clarity and, if successful, will ultimately reduce the financial and emotional burden currently faced by thousands of leaseholders.

The Government has decided to scrap the loan scheme for leaseholders announced last spring, and instead is looking to developers to contribute to a £4billion fund, which will be used to remediate buildings under 18 metres. Developers have been given two months to respond to the Government, with detailed plans as to how they will deliver this funding.

The new announcement also introduces a more measured and proportionate approach to risk, recommending a more holistic approach to risk assessments for each building with the launch of PAS9980. They also announced £27 million in additional funding for alarm systems in order to facilitate a change from a stay put strategy to simultaneous evacuation in the event of fire, where needed.

Finally, it was announced that a team of forensic accountants will be engaged to track down and hold to account companies who are responsible for building unsafe buildings, and which are seeking to hide behind Special Purpose Vehicles (SPVs). SPVs are generally companies which have been established to hold and/or develop a property but they can also protect parent companies from potential liabilities.

This is all encouraging news. There are however several questions that have still not been addressed. For example, what about the costs to remediate external wall systems on high-rise buildings that are not covered by the Building Safety Fund? These include combustible attachments such as balconies as well as missing and defective cavity barriers.

And what about other fire safety issues such as compartmentation and fire stopping? Leaseholders are facing significant costs for remediation of these other elements of fire safety, but these currently fall out of scope for the Building Safety Fund for buildings over 18 metres.

R&R has been working closely with our professional associations, ARMA and IRPM, together with a small number of larger managing agents to engage with government, and to seek proportionate and fair solutions to the challenges faced. We shall continue to work together to address these outstanding questions. Meanwhile, these most recent announcements are certainly a significant step forward.

A briefing note with further information is available here.

Posted: 27 January 2022 by Sue Petri, Director

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