Cladding remediation crisis

Piecemeal polices are leaving leaseholders facing a perfect storm over cladding

The Government responded first with a series of Ministerial observations as to who should take responsibility and pay, often arrived at with apparently little regard for the niceties of existing private legal agreements. Next was a long line of piecemeal policies culminating in the most recent funding announcement. Now attempts in Parliament to limit the costs to leaseholders have been quashed by the Government.

For the up to 11 million people affected, many of whom have already been forced into dire financial straits, bankruptcies and repossessions, the situation is still worsening. The COVID-19 pandemic, and the disruption caused by the end of the Brexit transition period have added a new dimension to the cladding crisis – one that has left millions of residential leaseholders in a perfect storm.

Mind the gaps

One of the most reported gaps in the fund during 2020 was the fact that it did not cover any temporary safety measures. For homes in dangerous blocks to be considered habitable, certain measures are legally required, such as waking watches to give early warning of fire risks. These can be hugely expensive over long periods, and the Government has been unable to give a deadline for when it expects remediation to be completed.

As the Government began to admit that not just remediation work but the fund application process were likely to continue a while longer, it was forced to bring in an extra £30 million fund in December 2020 to cover costs of installing fire alarms and detectors that will negate the need for waking watches, whilst at the same time extending the periods for fund application processes. The Fire Alarm fund does not recompense those who chose to install these same alarms before December – often acting reasonably to stop mounting waking watch costs.

The funds are also still limited to blocks over 18 metres. The problem is that the newly created EWS 1 form, designed to give some certainty of reporting format to lenders/funders for buildings over 18 metres, has in fact been applied by funders more widely to buildings below 18 metres. Many ask for an EWS if they have any concern there may be combustible materials, and specialist surveyors carrying out EWS inspections use new, stricter Government guidance which increases the likelihood that the buildings will be judged in need of immediate remedial works.

Unexpected delays

The past years have brought a set of issues that were not expected in the aftermath of Grenfell. The global COVID-19 pandemic and the Brexit transition have slowed the remediation progress – with reports of considerable issues of capacity in the marketplace. Supply chains have been disrupted, staff have been forced to self isolate or miss work for illness, and many have found travelling to work up and down the country a challenge with all the restrictions. Though a promising campaign of vaccination is ongoing, we are unlikely to return to a version of normality before the Summer, and the disruptions of Brexit are also set to drag on through the year. This leaves leaseholders looking ahead at further months of uncertainty.

In terms of how the Government can tackle the crisis as it continues to build – the more recent policy announcements have been positive steps. The first major gap that must be urgently addressed is the 18 metres cut-off for funding, which does not reflect the true risks or impacts on families living in lower-rise cladded blocks. Along with the latest £3.5bn boost to the cladding fund, the Government announced loans for those in lower buildings – but forcing more families into crippling debt is not a long term solution. Secondly, the Government should look at issues of insurance, and becoming a lender of last resort to alleviate those under punitive premiums. Ministers should also be looking to give greater certainty to leaseholders – perhaps, as Labour suggests – by setting a deadline by which all the cladding must be remediated. This may help to focus minds and encourage those involved in the process to work with government to overcome some of the more recent Covid and Brexit disruptions. What is certain though, is that leaseholders and their families cannot afford to wait a moment longer.

Speak to James Bessey or another one of our Construction & Developments experts if you need advice on cladding remediation and related issues.