Protect leaseholders from paying for cladding remedial works

The Draft Building Safety Bill currently proposes a Building Safety Charge payable by leaseholders for cladding remedial works. This should be removed and public funds made available to protect citizens through appropriate safety standards, and Freeholders should also be made to contribute.

Currently leaseholders are living in homes/flats which are unsafe, unsellable, and face paying for something which was not their fault. The government should take responsibility for failing to create and uphold appropriate fire safety standards and provide funds to make buildings safe and kick-start the construction industry. Freeholders should also ultimately be responsible for removing this unsafe cladding.

The Government believes people should be safe and feel safe in their own home. Learning the lessons from the Grenfell Tower tragedy, the Government is committed to bringing about the biggest change in building safety for a generation.

The Building Safety Bill, building on the recommendations of Dame Judith Hackitt’s Independent Review of Building Regulations and Fire Safety is an important part of delivering on this commitment. The Bill will create a new Building Safety Regulator and a more stringent regime for high-risk buildings, with better accountability and clear duties for those responsible for the safety of buildings. It also gives residents a stronger voice in the system, ensuring their concerns are never ignored.

As part of these reforms the Building Safety Bill will introduce a Building Safety Charge, which will give leaseholders greater transparency around costs incurred in maintaining a safe building, while ensuring any costs are proportionate and fair.

We expect that the charge will pay for a building safety manager, legal fees, safety case production costs, reporting, safety management, resident engagement and complaints processes. The Bill provides powers to enable Government to limit the building safety costs that can be recharged to leaseholders. The Government may also prescribe costs to be excluded in regulations and leaseholders will have the ability to challenge costs at the first-tier property tribunal.

The Government is clear that it is the responsibility of the building owner to ensure the safety of residents and has called on them to protect leaseholders from these costs. In many cases building owners and freeholders can meet these costs by claiming on insurance policies or warranties, taking legal action or from their own resources.

In more than half of the cases where there was unsafe Grenfell style Aluminium Composite Material (ACM) cladding on a private sector residential block, the costs have been met in this way. In the remaining cases, the Government has stepped in and provided £600m in funding to remove this cladding.

The Government wants to see buildings remediated at pace. Through engagement with buildings owners 79% of all high-rise buildings with unsafe ACM cladding have either started or completed remediation, rising to 97% in the social housing sector. Government intervention has meant that despite the challenges of the pandemic over 100 buildings have started work on site in 2020– more than in the whole of 2019. The Government has been clear that there are no more excuses for ACM remediation delays. Where building owners have still failed to act, despite support and funding, we have been clear that they should expect to face enforcement action. 

We are aware that where developers and building owners have chosen not to take responsibility, leaseholders have been faced with excessive costs. The Government announced £1bn of funding to remediate other dangerous types of cladding in high rise blocks in Spring 2020, in order to support the remediation of more buildings at pace. The Government remains determined to protect leaseholders from unaffordable remediation costs and when publishing the bill for pre-legislative scrutiny we made it clear that this is a topic that we are committed to considering further and will update on this work before the Building Safety Bill is introduced to Parliament.

Ministry of Housing, Communities and Local Government