The Government has outlined new measures which are designed to put additional pressure on the construction industry to remove and replace defective cladding, and protect leaseholders from having to pay the significant costs that they are currently facing.

The protections (if passed) will include:

  • A guarantee that no leaseholder living in medium or high-rise buildings will have to pay for the removal of cladding;
  • A limit on charges to leaseholders for non-cladding costs (such as Waking Watches);
  • Protections for leaseholders will be extended to cover other fire safety defects.
  • Powers will be given to the Courts to allow claims against developers when they have used shell companies to avoid responsibility for safety;
  • New powers will allow claims against cladding companies who have been prosecuted under construction products regulations  to contribute towards the costs of remediating buildings;

The Department for Levelling Up, Housing and Communities has said that the plans could see developers and manufacturers effectively blocked from obtaining planning permissions or buiulding control sign off if they do not help fix cladding safety issues.

The measures are likely to come as welcome step in the fight against remediation for dangerous cladding. The Government’s announcement also proposes a cap on recoverable service charge costs at £10,000 per leaseholder for any fire safety works (against £15,000 in London) which would apply where landlords do not have the resources to pay for remedial works.

The Government will also be able to apply its new building safety levy to more developments, with scope for higher rates for those who do not participate in finding a workable solution. Ministers hope however that the powers will not be required and want responsible developers and manufacturers to operate freely.

The proposed measures are due to be debated in the House of Lords on 21 February 2022. Michael Gove commented “These measures will stop building owners passing all costs on to leaseholders and make sure any repairs are proportionate and necessary for their safety. All industry must play a part instead of continuing to profit... We cannot allow those who do not take building safety seriously to build homes in the future, and for those not willing to play their part they must face consequences.”

Burges Salmon Comment

Whilst these proposals are welcome news for leaseholders, they demonstrate an ever hardening attitude by the Government towards developers. 

The Government is attempting to balance limiting leaseholders liability for the works and the developers' responsibility for remedying defective works through the proposed changes. Ultimately, the measures that are enacted will need to be fair to both leaseholders and to developers.