Building Cladding £500,000? Who has to pay... Help

davidmcn

annetheman said:

numbercruncher8 said:

I think several issues are being conflated here. A lot of the millions of people cited that are affected have nothing to do with cladding, their buildings have no cladding but are awaiting a certificate.

Secondly, emotion is being pushed rather than logic. Of course, some people aren't going to afford it. For a lot of other people, £15,000 represents a pain, but not a life-crippling expense. There will be some extreme examples where the repair costs are expensive and there are fewer flats to apportion the costs between, these will get disproportionately more airtime in the news.

Basically, why should the taxpayer foot the bill for upgrading what are private residences? The main arguments are that 'it's not our fault' or that 'its the governments fault for changing the rules'.

But you can have a case where someone had no problem buying their house in the past now having difficulty to sell because of an absestos roof, which was legal in the past but not legal now. Should the government pay for a new roof? Even leaseholders in the flats with cladding would think the moral answer is no. Repayable loans, perhaps.

Ultimately it could be a good thing, in that people have a better understanding about what they are liable for, and that freeholders are more accountable for the money they spend. I think these factors are lacking at present.

Leaseholders are NOT building owners. A lease gives you the temporary right to occupy the property for the period of said lease, you do not own the property at all. Freeholders own buildings.

So if a person who owns the house with the asbestos roof wants it fixed, they should pay to fix it, because they own the building - that person will always be the freeholder. 

But the freeholder will get nothing out of doing that. They don't occupy the building, they can't charge an enhanced rent for doing it up. They (or their predecessors) have already sold the leasehold interests. And these are long leases - even a relatively "short" lease is going to last the equivalent of several generations, so it's the leaseholders who get the benefit of even once-in-a-blue-moon repairs and upgrades.

Rony

I say split it
50% Leaseholder, 30% Freeholder, 10% Developer, 10% Government

numbercruncher8

Why do freeholders do any maintenance at all? They aren't a charity.
The reason, leaseholders pay for it by means of their service charge every month.

The current legal status is that at least some proportion of charges are recoverable from leaseholders. That isn't opinion, but rather why the mess is what it is. Clearly, in the extreme cases people cannot afford it, and in other extreme cases the costs are high. But those are the cases that are publicised.

If there was a u-turn and freeholders had to pay for this cost, what would happen? Bigger provisions would have to be kept in the future, which means bigger monthly service charge payments, which means lower affordability, which means lower prices for the property. 

NameUnavailable

Leaseholders pay a service charge to MAINTAIN the building. A freeholder can't just decide, for example, to fit a swimming pool in the grounds, or fit new doors and windows because they look better, or anything else that isn't deemed essential maintenance.

Also the freeholder was in charge of and responsible for any works undertaken. What if they have the roof replaced and the new roof leaks? They can't just have another new roof fitted and charge the leaseholders all over again.

There should be some responsibility on the part of the freeholders IMHO where combustable cladding was fitted. Most of the buildings will I think be relatively new - most cladding on older flats was fitted like Grenfell by local authorities to 'gentrify' their properties and perhaps save money on restoring dirty facades etc.

This matter is i think rather different than regular maintenance of a property.

[Deleted User]

Rony said:

I say split it
50% Leaseholder, 30% Freeholder, 10% Developer, 10% Government

Why should taxpayers pay for upgrades to private property.
If the occupants can't pay, place a charge against the property and refund when the occupant moves/passes away. 

annetheman

AdrianC said:

annetheman said:

I think - again - what a lot of people are failing to realise is that leaseholders do not own the fabric of the building.

If I as a leaseholder (I'm not yet) want to pay for the fire safety repairs myself and start remediating the building to comply with today's regulations, I cannot, because I do not own the roof, walls (including cavities), windows or any other part of the fabric of the building.

I 100% believe the building owner should pay for the repairs.

Leaseholders are NOT building owners. A lease gives you the temporary right to occupy the property for the period of said lease, you do not own the property at all. Freeholders own buildings.

Minor issue...

You're forgetting the terms of the lease, which will unequivocally state that the leaseholder is responsible for a proportion of the cost of maintaining and updating the fabric of the building.

There's not a lot of point in arguing it's SOOOO unfair, because I'd lay odds that they've happily been agreeing to it by paying the service charge up until now.

You have no idea what is in my as-yet-unsigned lease, nor those of the 3 million people affected by this, many of whom are leasehold landlords themselves.

Maintenance the fabric of the building and necessary repairs I think should absolutely be contributed to by leaseholders, but a remediation fund - where a building owner refuses to fund safety defects to the building fabric - requires wider contribution IMO e.g. from the developer, freeholder and government. Many buildings are failing fire safety inspections due to lack of fire breaks between flats, use of below class 0 insulation, etc. besides cladding; it was the person who bought the building's responsibility to perform an intrusive survey at the time of purchase, to ensure they picked such things up, they didn't, they are responsible for the consequences. As mentioned, leaseholders cannot perform intrusive surveys so buy in good faith that the fabric of it will be and has been taken care of by the owner.

It is also much more in the building owners' interest to do so than in the leaseholders'. If a flat is unmortgageable due to failing EWS1, owner refuses to fun remediation, passes £80,000/flat bills to leaseholders, most can't pay and have to forfeit the flats - the building owner won't just be able to get someone else to live there, unless they're willing to accept peanuts for cash-only sales. An unmortgageable flat is a burden for them and once empty, they will need to remediate to re-lease anyway.

They own the building for a very long time, longer than most leaseowners it occupy during the 99-125 year lease. Regulations are likely to change during that time. A responsible building owner should budget be prepared to own that responsibility, it's the burden of ownership. Otherwise, give out portions of the freehold to the leaseholders so we can end this feudal system.

Cladding crisis is often spoken about in tandem with long overdue leasehold reform for good reason. The former is more urgent, though. 

Interesting reading for anyone following this topic: https://committees.parliament.uk/committee/127/public-accounts-committee/news/118990/pac-condemns-badly-missed-target-to-make-thousands-of-grenfellstyle-cladding-homes-safe/

annetheman

dahj said:

Rony said:

I say split it
50% Leaseholder, 30% Freeholder, 10% Developer, 10% Government

Why should taxpayers pay for upgrades to private property.
If the occupants can't pay, place a charge against the property and refund when the occupant moves/passes away. 

Agree. Taxpayers should not pay. These buildings are privately owned by freeholders, who should pay to remediate their own properties they won't be able to lease otherwise.

They can recover the money from whoever later on and take whomever they want to court for however much they want but the immediate action required is for them to pay for remediation required. It's not a leaky roof, some damp walls or a dusty paint job, it's potentially 100s of people dying avoidably in a fire aka Grenfell II. 

A levy on new buildings paid for by developers would also help to prop up a nationwide fund that can be used where owners cannot pay to fix fire safety issues themselves. Australia have the right idea: https://www.vba.vic.gov.au/news/news/2019/cladding-rectification-levy-to-commence-on-1-january-2020

darkswer

It thinks that the price can be split among the leaseholder, the government, the owner, and someone else who just wants to chip in. Something like this: 60% - Leaseholder, 20% - the government, 10% - the owner and 10% - charity. This would be fair and cool. This is the way that it should look to my mind.

Slinky

Necro thread alert

Sarah1Mitty2

What is the present situation in the UK with this issue?