Purchase the updated LPC Sprinkler Rules featuring new Technical Bulletin updates

Order your copy

Leaseholders ‘heartbroken’ over cladding fund exclusion

1 June 2020

LEASEHOLDERS AT the Skyline Central 1 block in Manchester said they were ‘heartbroken’ to be excluded from the £1bn building safety fund after work had already begun to replace cladding.

Last week, the government revealed that the £1bn fund would open on 1 June, with leaseholders in social housing blocks revealed to be ‘eligible for support’. In March’s budget, Chancellor Rishi Sunak announced the new funding ‘to help strip combustible cladding from homes’ in both social and privately owned blocks above the original £600m funding for both, to help with removing cladding from blocks over 18m tall.

The previous funding was for buildings with aluminium composite material (ACM) cladding, but Mr Sunak said that this would ‘go beyond dealing with ACM to make sure that all unsafe combustible cladding will be removed’. The funding would ensure such cladding would be removed ‘from every private and social residential building above 18m high’, and the government would continue to try and building owners and developers pay ‘their fair share’.

This fund ‘will meet the cost for unsafe non-ACM cladding on residential buildings’, 18m and over that ‘do not comply with building regulations’, and the government urged building owners to ‘act and put the safety of residents first’, with total funding for cladding remediation now £1.6bn. The fund’s application process is designed to enable projects ‘to proceed at pace’, with building owners, freeholders and others responsible for buildings to register from Monday.

While ‘predominantly targeted’ at supporting private sector leaseholders ‘facing significant bills’ it was ‘clear that for leaseholders living in buildings owned by providers in the social sector, it will provide funding to meet the provider’s costs which would otherwise have been borne by leaseholders’. Landlords are expected to cover such costs ‘without increasing rent for their tenants’.

Applications ‘can be progressed alongside the development of the remediation project’, and focusing on non ACM remediation for the private sector, the fund would ‘meet the capital costs of removing and replacing’ cladding, and be provided for ‘mixed use residential and commercial developments in both sectors’. Buildings under 18m will not be included, nor will hotels, hospitals and building with no residential leaseholders.

Where work had begun on buildings with non ACM systems, or ‘where work had been previously committed to’ prior to the budget announcement, ‘these works will not [be] eligible’. Inside Housing reported however on the disappointment of the Skyline Central 1 leaseholders, whose building was clad in combustible high pressure laminate cladding and who accepted loans of up to £25,000 each earlier this year to pay for cladding remediation.

This was after they had been ‘set an ultimatum which could have seen them lose their homes’, and while the work is ‘nearing completion’, the cost of the loans ‘pushed some residents to the verge of bankruptcy’, and they had hoped to ‘recoup their costs’ through the fund before discovering ‘buildings will be excluded from applying if work has already started’.

In response a government spokesperson said that the fund was aimed ‘at removing the financial barriers that are preventing building owners from remediating unsafe buildings quickly’, and that ‘there may be recourse through building owners through warranty or insurance claims’ for those who have already paid for works. Despite this, a leaseholder in the Manchester block said this route ‘had already been explored’, and was unavailable as ‘the building was out of warranty’.

The leaseholder said it was ‘truly baffling’ that the government thought this possible, adding: ‘We’re extremely concerned to notice that the fund only seems applicable to remedial work that hasn’t started yet. While the work on replacing our HPL cladding and other fire safety defects is nearing completion, the financial burden that this brings will last a lifetime, with many of us now facing the very real possibility of bankruptcy.

‘It seems completely abhorrent that the government has chosen to ignore leaseholders like ourselves and make us ineligible to apply to fund. They have always said that work must be carried out as soon as possible and that leaseholders should not be responsible for the cost of remedial works, and yet it looks like we still are. All these terms and conditions do is penalise those living in buildings where the freeholder has already acted.

‘It is truly heart breaking and we’d like urgent clarification on why government have chosen to leave us out of what, now more than ever, seems to be a cladding lottery.’

A spokesperson for HomeGround, acting for the building’s owner Adriatic Land, said it ‘fully support[s] the leaseholders in this matter’, as ‘the government has already acknowledged the regulatory failure that has caused this cladding crisis so it is not right that the Skyline leaseholders are being denied support from the government’s remediation fund.

‘It is especially unfair in the case of Skyline that leaseholders are being penalised as a result of the proactive work that has taken place to remediate the building as quickly as possible. Had funding from government been made available earlier, this would not have happened’.

Leaseholders ‘heartbroken’ over cladding fund exclusion