Builders In England Compelled To Pay For Remedying Cladding

The government has outlined more details about its intention to compel builders and manufacturers in the housing sector in England to cover the cost of replacing dangerous cladding to boost protection for leaseholders. Basically companies could be blocked from the housing sector if they fail to remedy and fix cladding safety issues.

These proposals, if enshrined in legislation, would benefit leaseholders living in medium and high-rise blocks by not requiring them to foot the cost of the removal of cladding deemed unsafe. If these proposals do become law, service charge demands delivered to leaseholders, for cladding removal, would be much reduced. Further proposals include limiting the amount leaseholders are expected to pay for non-cladding expenses like 24 hour waking-watches to patrol cladded blocks, with some developers potentially covering this cost.

These proposals are likely to be included in the Building Safety Bill (“BSB”), which is following the usual statute-making route through parliament, will also make provision for freeholders and building owners to seek legal redress against cladding manufacturers that used proven unsafe and defective materials products on properties. Remarkably, the time scale for building owners being able to sue manufacturers would go back 30 years. The BSB and these new proposals/amendments are shortly to be debated in the House of Lords.

But in a warning to manufacturers, the BSB also includes provision for cost contribution orders. So if, following a prosecution, a manufacturer is guilty of using unsafe products, not only will that manufacturer be ordered to remedy the problems they cause, but a costs contribution order will require a financial contribution to fixing the identified problems.

The BSB also contains provision for “building safety levies”. These levies will have to be paid by developers when building control approval is applied for with specific regard to identified, high risk residential blocks in England. Of course, it is hoped that the BSB and its later enactment into law will serve as a deterrent to any rogue developers and manufacturers and that responsible operators will still be able to conduct business unhindered.

The BSB does not end there. Provision also includes the Courts being able to exercise its jurisdiction to prevent developers setting up one-off, “creature companies” that are non-transparent, tricky to trace its company officers and evade liability and responsibility.

With regard to the earlier-mentioned proposals to reduce non-cladding costs for leaseholders, the BSB also provides that any developer that still owns a property exceeding 11 metres in height that was built or refurbished by that same that developer, will have to pay the entire cost of remedying historical building safety issues in that property.

Any instances of a building owner not being in a financial position to pay, a cap on leaseholder costs would be imposed. This cap is likely to be about £10,000 for properties outside London and £15,000 for properties in London. But leaseholders would be given credit for any amounts paid by them in the last five years counting towards the cap. This would safeguard leaseholders from paying any more.

It remains to be see whether the BSB will emerge in tact when enacted into legislation.

Our Residential Property Disputes team at Hodge Jones & Allen are highly experienced in this specialist area of the law. If you are in need of legal advice, please call 0330 822 3451 or request a call back.