Leaseholder Protections
With effect from 28 June 2022, ‘Qualifying Leaseholders’ are afforded financial protections from the costs associated with the remediation of cladding defects and, in the case of other relevant historical non-cladding safety defects, are only required to pay a capped amount; and then only where the Landlord has evidenced through an affordability test that it is not in a position to pay. Guidance on this subject has been provided by the Government and can be accessed here.
As detailed in this guidance, it is necessary for landlords to carry out a review of expenditure over the last five years in order to establish what costs have been borne by leaseholders to date. A Landlord’s Statement must then be prepared and Leaseholders written to in order to establish whether or not they are qualifying Leaseholders.
This creates considerable extra workload, with each financial review taking anything from 5-30 hours (based on the cases completed to date). We are therefore currently consulting with our clients, and agreeing what role they wish us to play in supporting the work which they need to carry out in order to comply with this legislation. It will then be necessary to prioritise this work, based on the needs of each building.
Developer Pledged Buildings
The majority of larger developers have now signed the Developer Pledge. This was a promise to cover the cost of life-critical works, where these have been identified as necessary through an FRAEW (Fire Risk Appraisal of External Walls) conducted in accordance with PAS9980. The Government had anticipated that detailed contracts would be signed in early August, but we understand that discussions concerning the detailed agreement are ongoing and it is unclear when these will be signed. Until then, we are liaising with some developers to progress works, whilst others wish to await completion of the detailed agreement.
Unpledged and ‘Orphaned’ Buildings
There are some buildings which require remediation, where the developer has not signed the pledge. There are also a number of orphaned buildings, which is the term used to describe buildings where the developer no longer exists and therefore cannot be called upon to fund life critical works. In these scenarios buildings are continuing to progress with fund applications to cover the costs of cladding remediation, where they have passed technical eligibility for the Building Safety Fund (BSF). Alongside that we are also finding that some unpledged developers are stepping forward to carry out necessary works.
The Building Safety Fund
DLUHC have recently announced that they are reopening the Building Safety Fund. There are a number of buildings which require life-critical works and which had not previously been accepted into the fund. We will be progressing applications where this is the case. We understand that the fund will also cover elements for which funding was not previously available, (such as vertically stacked wooden balconies) where a FRAEW assessment has deemed these to be life-critical works. If necessary, we are recommending to our clients that these be commissioned in order to provide the required evidence for funding. Demand for these assessments is currently high, resulting in some delays in obtaining the necessary evidence.
R&R has a well-established team of colleagues (10 in total) who are entirely focused on co-ordinating all parties and ensuring that there is a clear route through to remediation. This is a complex matter however, which is having to be handled on a case by case basis and it is therefore necessary to prioritise workloads based on the needs of each building. We recognise that this is incredibly stressful for leaseholders who are continuing to have to live in unsafe buildings. Please rest assured that we are doing all we can to progress this work as quickly as possible, however given the complexity of the process it is taking longer than we would wish.
