DAME JUDITH Hackitt, in her role leading the formation of the new building safety regulator, predicted that the government will amend the bill ‘in order to help homeowners trapped in unsafe buildings’.
Earlier this week, the Housing, Communities and Local Government Select Committee (HCLGC) called attention to clauses in the draft bill that might allow leaseholders to be charged for fire safety works, an ‘abdication of responsibility’. The committee called on the government to ‘recommit to the principle’ that leaseholders should not pay towards the remediation of their buildings.
It was ‘deeply concerned’ by the government’s ‘failure to protect’ leaseholders from ‘historic’ building safety costs’, and added that it was ‘especially disturbed by its commitment to protecting [them] from only “unaffordable costs”’. Such a move ‘would be unacceptable and an abdication of responsibility’, in making leaseholders ‘contribute a single penny towards the cost of remediating defects for which they were not responsible’.
The bill proposes a building safety charge separate from service charges, which is ‘aimed to ensure that the building safety costs are clearly identifiable’. However, despite ‘growing campaigns’ that call for leaseholders to be protected from such costs, clauses in the bill ‘permit’ building managers and owners to charge leaseholders ‘for these costs, even for issues that pre-date them moving in’.
The HCLGC report listed individuals and groups that had said ‘they did not think any costs should be pushed onto leaseholders’, including the Health and Safety Executive. For the committee, ‘quite simply, no one besides the government thinks the leaseholders should pay’, and it was ‘evident that the responsibility for the costs of remediation lay jointly between the industry and the government’.
It recommended that ‘the only way to ensure’ such work was ‘done quickly’ was for the government to ‘forward fund’ it and ‘then pursue recouping the costs’, with cladding funding so far ‘not enough’.
Housing Minister Lord Greenhalgh had told MPs last month that leaseholders would be liable for ‘some costs’ where owners would not pay ‘and were not required to do so’ under lease terms, adding that the government was ‘determined to ensure the sums involved were fair and affordable’.
The committee argued that the government, while also footing bills ‘in the short term’, needed to ‘develop mechanisms’ to recover costs from those responsible for ‘historic failures’. It also warned that there was a risk that freeholders might seek to recover costs of historic remedial work ‘through the building safety charge’, and criticised the ‘lack of detail in key areas’ of the draft bill.
Two Conservative MPs have written to all other government MPs who are not ministers to ‘take a stand’ and ‘press’ the government to take action to protect leaseholders from fire safety costs, with Stephen McPartland and Royston Smith stating that ‘the government has done its best, but it has been over three years and they are not tackling all the issues.
‘There are lots of options and solutions to support the millions of leaseholders that are being left behind in our constituencies and we are working with the UK Cladding Action Group (UKCAG) to urge the government to support leaseholders’. However, comments made by Housing Minister Christopher Pincher in parliament saw him state that the government would not write an ‘open cheque’, and that it was up to developers and building owners to ‘step up’ and take responsibility.
HCLGC chairman Clive Betts said that the support provided to leaseholders so far was ‘totally inadequate’, and was supported by Conservative MP Sir Peter Bottomley, who said that delays to repairs had effectively ‘frozen’ parts of the leasehold market, and those affected had suffered both ‘unimaginable anxiety and costs beyond the possible chance of paying’.
Further backing for the HCLGC recommendations came from the National Fire Chiefs Council and the Greater Manchester High Rise Task Force, and BD Online has now reported on Dame Judith’s comments at Savills’ annual housing seminar, in which she said there was a ‘need to put greater detail’ into the bill before it is brought before parliament in 2021, and predicted that the government will amend the bill ‘in order to help homeowners trapped in unsafe buildings’.
Dame Judith stated that the issues faced by owners was the ‘biggest risk to implementing this change’ to building safety, and said she understood that the Ministry of Housing, Communities and Local Government (MHCLG) was ‘now working to make changes to the bill to solve the issue’. She added that around 13,000 existing buildings were ‘likely to be bound’ by the new regime.
She commented: ‘The need to find a resolution to that is quite clearly recognised within [MHCLG] and they know it needs to be addressed as part of putting greater detail into the Building Safety Bill before it goes back in to parliament. It was identified throughout the pre-legislative scrutiny process as one of the biggest issues, so there’s a lot of work going on, and I think we will see some further clarity and some resolution to that, before the bill is introduced into parliament. That’s my hope.’
In turn, she added that the bill was on course to be laid before parliament in ‘early 2021’, but did not set out changes she expected MHCLG to make, and noted that the plan was for the new regime to be formally in place by 2023, but warned that developers and the wider construction industry should ‘start implementing new practices now’.
She accused mortgage lenders and insurers of ‘overreacting’ by requiring leaseholders in multiple blocks to obtain external wall fire review (EWS1) forms - designed to demonstrate fire safety – ‘even when there was no fire risk’, stating: ‘Well-intentioned moves to help the process for external wall systems […] have resulted in over-use and indiscriminate use of EWS1 forms and, in some of the very worst of these cases, leasehold flats being considered unsellable and unmortgageable.
‘We need to apply proportion and common sense to what we do now and going forward, and refrain from these blanket approaches which confuse hazard and risk.’
Dame Judith also said at the seminar that the new building safety regulator will assist those in the industry ‘who are trying to do their best to stick by the rules’, but will be ‘much tougher on those who seek to game the system, or otherwise duck out of their legal and moral responsibilities’. It was ‘on course’ to appoint a chief inspector of building safety early next year.