Fire Safety and Cladding Costs Post Grenfell

By Joe Reeves, Property Solicitor at Wellers Law Group, London

Since the Grenfell tower disaster in June 2017, the issue of fire safety in residential leasehold accommodation has been high on the political agenda. The tragedy has brought to the fore the issue of who should pay for the costs associated with fire safety in properties at risk of fire.

On 19 April 2018, then Housing Minister Sajid Javid welcomed the decision of Barratt Developments to agree to pay for the costs of reinforcing fire safety in a building which they developed, but no longer owned, at Citiscape, in Croydon, South London. The company has committed to pay future and backdated costs of employing a fire warden and the removal and replacement of unsafe cladding from the building, thus taking the burden off leaseholders. The cladding at the building was similar in nature to the cladding which was widely considered to be a significant contributory factor to the Grenfell disaster.

The issue had previously been the subject of litigation in the First Tier Tribunal (Property Chamber) between the management company responsible for Citiscape and the various leaseholders. The Tribunal decision of 09 March 2018 held that the costs of a ‘waking watch’ on the property and of renovations to the cladding, were, on the construction of the leases of flats at the development, the responsibility of the leaseholders. Consequently, the freeholder was entitled to recover the costs of such works from the leaseholders through the collection of service charges under their leases.

The Tribunal, in coming to its decision, was conscious so as not to set a precedent, given that hundreds more buildings had failed fire safety and cladding tests since Grenfell. Accordingly, the Tribunal opined that the leaseholders might have claims against a number of parties, including the manufacturer, contractors, the developer and the local authority, if the relevant works or building regulations were not fit for purpose. This will, however, give little consolation to affected leaseholders because claims against other third parties may well prove difficult and will inevitably incur costly legal bills, involve extensive property litigation and render the leaseholders’ flats unsalable. That is not to say that third parties will be able to escape liability. A building contractor might be liable, for instance, if the cause of a fire is considered the result of a defect in the construction of the building. Similarly, a defect in the design of a building may render a developer liable.

In determining the question of liability for renovation costs and claims for repairs, the first documents to consult will always be the individual leases. Depending on the nature of the works, the freeholder may have a contractual right to recover the costs of work from the leaseholders through service charges, subject to statutory regulation and limitation. The outcome of future disputes will be on a case by case basis, taking into account the leases and the individual circumstances of each case.

Summary
The present position therefore, one of uncertainty, will cause much consternation amongst leaseholders. It remains to be seen how further litigation will unfold and whether the government will take the decision to intervene with any legislative effect.

This guide is for general information only and should not be relied upon for specific advice. If you are a landlord and would like to discuss your options in detail, please contact Joe Reeves on 0207 481 6383 or joe.reeves@wellerslawgroup.com.