Block owner to sue over cladding costs

Block owner to sue over cladding costs

GALLIARD HOMES sued the National Housing Building Council (NHBC) to try and force it to ‘pay out to leaseholders’ relating to cladding removal and replacement costs.

Last week, New Capital Quay in Greenwich, opened in 2013, was found to have ‘multiple’ fire safety issues. The 11 block complex is home to around 2,000 people, and ‘more than a dozen’ concerns were identified, not including that the buildings are clad with panel combinations that failed the government’s fire safety tests.

A deficiency notice was issued for all 11 blocks by the London Fire and Emergency Planning Authority (LFEPA), which discovered defective fire doors, missing fire stopping, ‘dangerous’ fire escapes and holes in plasterboard meant to act as compartmentation to ‘stop the spread of flames and smoke’. In total it identified 16 fire safety concerns, including a ‘lack of arrangements’ for evacuating vulnerable and elderly residents.

An ‘ineffective maintenance regime’, broken firefighting lift and fire hydrant were also mentioned, LFEPA stating that ‘procedures to be followed in the event of serious and imminent danger to relevant persons are inadequate’, while 30 fire marshals continue to patrol 24 hours a day at a cost of £25,000 per week.

Galliard responded that some defects ‘had been addressed’, and that there had been ‘no issue with missing fire-stopping material, just an error during the inspection’. Residents were worried they would have to pay the estimated £20m to £40m bill, or around £20,000 to £40,000 per flat, while they also face a £1.25m bill for the ‘round-the-clock’ fire warden patrols.

The company had been planning to sue the NHBC over ‘who pays for cladding that was certified as compliant with building regulations at the time of installation’, but since Grenfell have ‘been deemed to have failed fire safety rules’. Inside Housing reported that Galliard’s case was begun because leaseholders have ‘10-year warranties with the NHBC to cover building defects’, while it also ‘signed off the development in its role as a building control organisation’.

It launched the action to ‘try and force the NHBC to pay out to leaseholders’, though an NHBC spokesperson responded that it can’t determine ‘whether any warranty claims are valid without further information on the development’, which the property manager ‘has failed to provide’. It has commissioned an independent expert ‘to help us progress the claim as swiftly as possible for residents’, and ‘any court claim would be premature until the claim under the warranty has been assessed’.

A Galliard spokesperson stated that the cladding was ‘widely used and approved’ when constructed, and installed on the ‘understanding that it was in full compliance’, adding that ‘whatever was approved and signed off at the time, it is clear that today – “now” in the “post-Grenfell” world – the cladding does not comply’. They claimed that the NHBC had received claims but was ‘waiting for information from the property manager to prove that the cladding does not meet’ regulations.

This ‘untenable assertion’ was ‘being robustly challenged’, with the case ‘instigated to force the NHBC to honour their insurance obligations’. The NHBC has been served with a notification of claim to be brought to the High Court of Justice, but its spokesperson stated that it is a ‘fundamental misconception’ that a ‘particular product or material complies with the building regulations. Instead, it is the building as a whole which must comply.

‘A building does not automatically fail to comply with building regulations just because it uses category three ACM cladding. The fact that ACM category three cladding has failed the government’s fire tests does not automatically mean that applicable building regulations have not been complied with or that claims made under the NHBC Buildmark policy are automatically valid’.

Further, building managing agent Property Management Matters is ‘legally responsible for the safety of the buildings’, and the NHBC warranty ‘does not absolve it of this’, while the developer has responsibility to ‘make sure buildings comply’, and a building control organisation ‘does not confirm, guarantee or approve that buildings comply. We understand that the situation at New Capital Quay is very concerning for residents and we are committed to making an assessment of their claim as swiftly as possible once we have the necessary information.

‘We have asked the managing agent, which is legally responsible for the ongoing safety of New Capital Quay and is a subsidiary of Galliard Homes, to provide evidence that the buildings did not comply with the building regulations in force at the time, annual fire risk assessments and maintenance records so that we can assess the claim.

‘Since [Property Management Matters] has failed to provide this information and has not responded to our offers to assist, we have now stepped in to commission an independent expert.’