Cladding costs dispute resolved

7 March 2019

Residents of two blocks in Manchester’s Green Quarter will not be required to pay for the removal and replacement of combustible cladding on their buildings.

In June 2018, residents of Vallea Court and Cypress Place were set to face a tribunal against property owners Pemberstone over who pays for combustible cladding removal. The case included 300 leaseholders, and aimed to force them to pay £10,000 each toward the £3m bill for replacing flammable cladding.
 
Leaseholders ‘did not feel it was their responsibility to pay’, before Pemberstone launched the legal action, with the blocks’ freehold sold to Pemberstone, and the company arguing that residents should pay for any remedial works. Original builders Lendlease – in an introduction letter to a purchaser – said they would ‘undertake, at our expense, to complete any accepted defect that has arisen as a result of either faulty materials or defective workmanship’.
 
However, it had been ‘silent on the issue’, even though the buildings are ‘understood to still be under warranty’, with residents unable to ‘claim costs’ on cladding removal and through insurance – the tribunal is set to report back in six weeks. Fears over the cladding causing another fire were reinforced last June when a fire took hold next door to Vallea Court.
 
In July 2018 Lendlease bid for the contract to redevelop Manchester Town Hall, residents calling on the council to ignore the bid. A 24 hour waking watch was in place until the tribunal took place, with Pemberstone recouping the £7,000 monthly cost through resident service charges. The council, despite having said leaseholders ‘should not be expected’ to pay costs, added that ‘this had nothing to do’ with procuring a developer for the town hall.
 
Lendlease was reported in Australia in 2017 to have covered the cost of removing flammable cladding from Melbourne’s Royal Women’s Hospital, while the developer decision to pay for cladding replacement at Croydon’s Citiscape block had been seized upon by residents, who said at the time that they could not sell, remortgage or rent flats, and were stuck in a ‘giant tinderbox’.
 
Later in July last year, residents were ruled liable for the cost of replacing combustible cladding, with the tribunal ruling that the leaseholders were ‘liable for the cost of replacing [the] flammable cladding’. Payments would be added to leaseholders’ service charges at a cost of £10,000 each plus Pemberstone’s legal fees, while flat owners in Vallea Court have been required to pay for the waking watch on the block ‘until it was made fire safe’.
 
Finally, in January it was revealed that Lendlease had been awarded the town hall contract. Local Gov has now reported however that residents ‘will not be required to pay’, confirmed in a letter from Pemberstone to leaseholders, while apartment owners have also ‘been refunded all payments to date’.
 
Suzanna Richards, executive member for housing and regeneration for Manchester City Council, was ‘delighted’ at the news, and added: ‘The council has been clear throughout that residents should not be landed with the bill for replacing unsafe cladding. We know from our many meetings with residents that this long and complex process has been extremely stressful for those involved.
 
‘It has taken a lot of work by many people, especially the residents themselves, to reach this point. I am glad we were able to broker talks between Lendlease, Pemberstone, other parties and the residents. I would like to thank Lendlease and Pemberstone for engaging with these discussions and ultimately doing the right thing. They have set an example, in not passing on these costs, which I hope the rest of the industry will follow.’
Cladding costs dispute resolved