Leaseholder charges could spread nationwide

Leaseholder charges could spread nationwide

THE CHIEF executive of the Association of Residential Managing Agents (ARMA) warned that the bills reported in Croydon are likely to reoccur ‘up and down the country’.

Residents in the Citiscape complex in Croydon were told they will have to pay £31,300 per flat to fund cladding removal and replacement, with owner Proxima GR Properties, stating it was ‘not its responsibility’ to pay for removal and replacement of cladding that failed the government’s fire safety tests, undertaken after the Grenfell Tower fire.

The £2m bill works out at £31,300 per flat, and the company has ‘denied responsibility’ in paying towards the work, stating that the recladding will only take place ‘once full funds are in place’. Last October, residents had received letters saying that they would have to pay £5,000 to £6,000 per flat to replace the cladding.

Five months ago the government told the company to remove the cladding, while last month Sajid Javid, the housing, communities and local government secretary, said that the landlord ‘was responsible for ensuring resident’s safety’. Proxima GR Properties has ‘insisted that it is not obliged to cover the costs’, and warned the 93 apartments’ leaseholders that the bill ‘will increase if they delay payment’, with the £31,300 set to be ‘levied as early as March’. 

That dispute was ‘one of the first to affect private blocks’, with many councils and social landlords nationwide having ‘largely agreed’ to cover the costs of emergency cladding replacements. Proxima’s demands came despite Mr Javid’s intervention, where he commented: ‘All of the local authorities and housing associations with whom we are in discussion have indicated that they are choosing not to pass on the costs of recladding to individual flat owners. In the private sector, as in the social sector, it is for the responsible person to take the necessary steps to ensure the safety of residents.’

Inside Housing reported on Dr Nigel Glen, ARMA’s chief executive, who stated that leaseholders ‘up and down the country’ may face bills of ‘tens of thousands of pounds’ to cover fire safety work, with the Croydon situation ‘not unique’. He added that they could also face ‘lengthy legal battles’ over who should pay for the work, ARMA proposing that the government provide interest free loans to leaseholders to avoid safety being ‘compromised’ by delays.

The organisation identified 12 privately owned blocks utilising aluminium composite material (ACM) cladding that failed the safety tests, warning that in the absence of ‘alternative funding’ it was ‘likely’ that leaseholders would ‘be legally liable to pay for the fire safety work’. ARMA also ‘immediately flagged’ its concerns with the government, and Dr Glen stated that it had ‘lobbied government to understand the time-sensitive costs and the burden it could place on leaseholders’.

While the government – as Mr Javid has said – believes private landlords should not pass on fire safety costs to leaseholders, Dr Glen noted that there is ‘no suggestion that anyone has acted inappropriately or cut corners’, adding that building control departments had approved and signed off various cladding types ‘and have only now tested those very systems and found them unsuitable’.

Mr Javid’s latest responses included that the ‘moral case is clear’ that the freeholder should pay for removal, and that Proxima had been ‘wholly unreasonable’, while Adrian McClinton, associate solicitor at Coffin Mew, said the ‘vast majority’ of leaseholders would be liable, and the government ‘may want to put aside funds’ to loan money to cover upfront cladding replacement costs ‘which can be paid back over time’.