New plan for industry to foot bill for the cladding crisis to protect leaseholders

On 10 January 2022 the government (by way of Secretary of State for Levelling Up Michael Gove) set out a new approach to building safety that endeavours to protect leaseholders currently affected by the ‘cladding crisis’ by suggesting that “Leaseholders living in their own flats will not face any costs to fix dangerous cladding, with developers and cladding companies paying instead”. 

Gove’s proposals include that the previous proposed loan scheme for leaseholders in medium-rise flats “will be scrapped”. The industry now has two months to agree to a financial contributions scheme to fund the new plan, before the government imposes a solution in law.

The new four point plan is as follows:
“Opening up the next phase of the Building Safety Fund to drive forward taking dangerous cladding off high-rise buildings, prioritising the government’s £5.1 billion funding on the highest risk

Those at fault will be held properly to account: a new team is being established to pursue and expose companies at fault, making them fix the buildings they built and face commercial consequences if they refuse

Restoring common sense to building assessments: indemnifying building assessors from being sued; and withdrawing the old, misinterpreted government advice that prompted too many buildings being declared as unsafe; and

New protections for leaseholders living in their own flats: with no bills for fixing unsafe cladding and new statutory protections for leaseholders within the Building Safety Bill”.

There will additionally be a series of ‘rapid measures’ including:
An additional £27 million for  fire alarms to be installed in all high-risk buildings ending expensive waking watch measures, usually paid for by leaseholders

Consideration of further amendments to the Bill to enshrine further protections for leaseholder

“Changes to grant funding guidance will help those in shared ownership homes who want to sublet their properties and encourage landlords and lenders to approve requests, in recognition of the hardship shared owners are facing”.

Amendments to the Building Safety Bill to “retrospectively extend the legal right of building owners and leaseholders to demand compensation from their building’s developer for safety defects up to 30 years old”. As only defects up to 15 years old are currently covered this will give thousands more leaseholders the right to challenge.

The Consolidated Advice Note (interim guidance that was wrongly interpreted by the industry as requiring remediation of all cladding irrespective of building height) has been withdrawn.

The government has also published new guidance in relation to the procurement for design and construction to support building safety - which suggests that “collaborative approaches should be adopted on all construction projects”, and it will be “essential to adopt them on projects that are ‘in-scope’ of the new regulatory regime that will be introduced through the government’s Building Safety Bill”. This more stringent regulatory framework in design and construction will be led by the Building Safety Regulator for new ‘higher-risk’ buildings which will include high-rise residential buildings, care homes and hospitals which are 18 metres or more in height or at least seven storeys. There will also be a more stringent regulatory framework for building work carried out in existing higher-risk buildings.

Three gateways at key stages will be introduced:
Planning ‘Gateway one’ will occur the planning application stage

‘Gateway two’ will be before building work starts 

‘Gateway three’ will be when building work is completed

Posted on 01/12/2022 by Ortolan

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