Forum Topic

Dangerous Cladding Debate on BBC Parliament Channel Now

Philippa Bond ● 1917d53 Comments

More info:https://www.bbc.co.uk/news/business-56426927

Philippa Bond ● 1868d

Here's an article on it:https://www.insidehousing.co.uk/news/news/lords-vote-to-send-debate-over-leaseholder-cladding-costs-back-to-mps-for-second-time-70040The suggestion is to urgently write to your MP to call for more discussion to progress a solution so that the thousands of new home owners (don't the Conservatives want everyone to be home owners? I thought it was a major objective of Mrs T) are not penalised for something that is not their fault.It is interesting to hear some developers involved are being mentioned under Parliamentary privilege.  Newspapers often disclose the eye-wateringly large bonuses that executives are handed. You would think they would be anxious to discuss and rectify the problems to bring this dreadful situation to an end whether or not it was their fault.

Philippa Bond ● 1869d

https://www.which.co.uk/news/2021/03/revealed-the-five-major-costs-the-cladding-crisis-is-piling-on-homeowners/

Philippa Bond ● 1871d

https://www.insidehousing.co.uk/news/lords-vote-to-send-debate-over-leaseholder-cladding-costs-back-to-mps-for-second-time-70040

Philippa Bond ● 1872d

appproximately!

Philippa Bond ● 1894d

Philippa Bond ● 1894d

Like many others I am shocked this is not all playing out in a court room, it's being treated like some kind of slight breach of the law that will just result in a fine of some kind or effectively a slap on the wrist.If there are not criminal prosecutions over this then something has gone badly wrong. Leaseholders should not have to pay a single penny.

Oliver Sampson ● 1894d

https://services.parliament.uk/Bills/2019-21/firesafety.htmlNow

Philippa Bond ● 1894d

https://www.parliamentlive.tv/Commons

Philippa Bond ● 1894d

The problem is much greater than just cladding. There are other faults and there are a lot of buildings involved.Project specific subsidary companies are often created just for the construction of one building to protect the parent company from liability.  So if things go wrong the liabilities stay with the subsidiary company which may then fold.Once completed buildings are often sold to offshore investment companies who have no interest in addressing the faults.

Philippa Bond ● 1904d

I think there could still be criminal prosecutions - as I understand it one of the cladding suppliers has already indicated some of their testing was not valid or tested on materials different to those used in the production version?

Michael Ixer ● 1904d

Also the company that made the cladding should be taken to court. It should have been tested before hand to see if it was flammable. If you buy clothes it says don't stand near naked flame as flammable. So why wasn't the cladding tested before being put on all these buildings.

Barbara Stevens ● 1904d

Do watch the youtube video linked to by Dean Buckner at the top of his post above and his notes.  There is a lot of interesting discussion on how to deal with the situation.There is a brilliant overview of the problems being encountered by the lessees by Martina Lees a journalist for The Times and Sunday Times in the introduction.

Philippa Bond ● 1904d

There is a 38 degrees petition.The Fire Safety Bill will be returning to the Commons on 24th February so now is the time to gather more names on the petition.About 70% of the buildings have more problems than just the cladding that need fixing.

Philippa Bond ● 1905d

On YouTube today https://www.youtube.com/watch?v=4fo_j4xEayADescription below. Bob Neill (Con) appeared very supportive. I was at a meeting with Labour MPs on Monday and the general sense is that both sides of the House are united against the 'forced loan' proposal. "Why you should watch: There may be as many as 11 million people trapped in apartments that are unmortgageable (and hence unsaleable) as a result of building deficiencies revealed after the Grenfell disaster. Remediating those deficiencies could cost well over £10 billion – vastly more than the £1.6 billion that the government has budgeted for.Who pays?Legally, at present, it’s the leaseholders – who can face bills up to £100,000, on top of insurance premiums that shot up five-fold. ‘Morally’, it might be the developers – if you can find them. It doesn’t seem to be the freeholders. This is a major issue – economically, financially, socially, and politically. At present, there is point-scoring in Westminster, with Labour demanding that leaseholders shouldn’t pay anything, and Government ministers backtracking a bit from a firm pledge to a softer promise that leaseholders shouldn’t be faced with ‘unaffordable’ bills.Maybe this is an area where a bit of financial innovation wouldn’t come amiss…Moderator: Andrew Hilton (Director, CSFI) Panellists: Sir Bob Neill is the Conservative MP for Bromley and Chislehurst. A barrister, educated at LSE, he was formerly a member of the London Assembly and Shadow Local Government Minister. He is chair of the Justice Select Committee, and has recently become chair of an APPG on the cladding issue. Martina Lees is a senior property writer at The Times and the Sunday Times, where she previously spent ten years as a digital section editor. She began her journalistic career as a crime reporter in Johannesburg. Dean Buckner is policy director at the UK Shareholders’ Association, and a trustee of the Leasehold Knowledge Partnership. He is a former insurance data specialist at the PRA and BofE, and, before that, spent a number of years in the City."

D. E. Buckner ● 1914d

http://www.putneysw15.com/default.asp?section=community&link=http://neighbournet.com/server/common/ldrshousing010.htm

Philippa Bond ● 1915d

Did you look at the debate?  It is introduced by MP Thangam Debbonaire and has a lot of different MPs from different parties speaking.  It is astounding all the problems that there are all over he country.One of the most vocal groups is the Manchester Cladiators.https://twitter.com/McrCladiatorsStronger Together.

Philippa Bond ● 1915d

Usually a multi block is  a  lease that covers all blocks on the same estate or blocks with the same address ie 1_10 and 11_20 any road.Where two blocks are linked in this way all those with this lease pay a fixed % to the cost of works to the multi block.generally that's not a major issue with roofs and windows when they are renewed as more people pay a smaller % of the combined cost and works out about the same as a larger % ,of a smaller block. Where it becomes an issue is if one block has a lift and the other doesn't then the unlifted leases contribute towards the cost due to the joint block leases.we had a number of these at WBC whenni was there and we did a major exercise trying to get people to go for a re definition to a single block lease. It can be quite complicated as my ramble gets suggests but if everything in the blocks linked is equal its not a major problem but if you lived in the block with the lift would you opt to increase your % contribution for lift works?

Andy Pike ● 1916d

What would you expect to find on a multi block lease Andy? I've not heard of that.

Lucille Grant ● 1916d

Yes Barbara that leasehlod ownership

Andy Pike ● 1916d

Andy, yes some might have got them cheaper, but the minute you moved in the lifts, windows, or something else was then down to you to pay for.

Barbara Stevens ● 1916d

A multi block lease by the sounds of it. I would check the lease very carefully.

Andy Pike ● 1916d

Fleur will be inundated  no doubt. The block I live in has this issue even though  my actual building has no cladding or  issues with fire safety. It is the building in front that has  cladding on it so all 70+ leaseholders in both buildings are expected to fund its removal and replacement.

Lucille Grant ● 1916d

https://parliamentlive.tv/event/index/a6ac5191-f789-42ba-a63f-71e9c65ffbb6?in=15:38:38So many different MPs spoke from all parties.There are some developers - rich ones - who refuse to put right the buildings and others who have whether or not it was actually their failure/fault.  Different sorts of cladding, lack of fire compartmentation, lack of supervision perhaps.  Definitely not just one problem more and major because I suspect there are more than hundreds of these buildings. Someone said the Govt wouldn't release the numbers through FOI. It is now causing insurance problems throughout the industry.If you live in one of these buildings I would definitely get in touch with your MP.  In the north leaseholders got together.  It must be worth not suffering on your own and being able to give each other mutual support.The audio doesn't seem to be indexed which is a shame.

Philippa Bond ● 1916d

One big difference in the 80s those that bought rtb received considerable discounts and were attracted by them. Indeed many did very well out of it and sold on with significant profits. It was largely the 2nd generation purchasers that struggled as they bought at market value with no discount.

Andy Pike ● 1916d

Barbara. A good point: in the 1986s the Conservative governments promoted home ownership and the sale of many council properties including the flats who h are now a problem. Many would probably have been happy continuing to rent without the responsibilities of home ownership.  From comments I hear I'm not sure how many leaseholders fully understand the legal implications of leases and the likability relating to ground rents and service charges.Andy.. I agree it's not an easy problem to resolve. It's a good point that the banks will be left with lots of worthless property if the market collapse but remember as in 2008 it our savings they're investing so perhaps as then as tax payers we have an interest in sorting it out? Some have invested in propety as landlords as an alternative to other market options - so much for safe as houses!  (Or flats ...) Markets do go up and down but this has been caused by inappropriate construction or failing to follow laws, regulations etc so should it be the investor bearthe cost of these failings? Finally many middle aged, elderly people do own properties outright and are looking to do equity release at some stage; that opens up a whole set of other issues. Perhaps the need to be a range of solutions but something needs to happen now because of the fire danger, and that probably means the government putting money up front and sorting ouyt things later?And, Andt :-) is ☺🙂 the internet text for a Smiley

Michael Ixer ● 1916d

Sorry nothing about the cladding, but if any of you remember when Margaret Thatcher came into power, she wanted everybody to buy their properties. Everybody had a chance of getting a mortgage, but then what you had to pay monthly to your Building Soc. Bank etc, shot right up high. a lot of people couldn't then pay the repayments. I worked with somebody who had children and was so stressed by this he had a heart attack. I feel this is a very similar situation . Putting this onto the Leasholder.

Barbara Stevens ● 1916d

unfortunately Michael the smiley did not appear just a semi colon and bracket.anyway I take your point on purchasers being disadvantaged but would they.?I suspect in the vast majority of cases the purchasers would have done so with a significant mortgage so do not actually own the flat outright. They have a share of the flat equal to any deposit plus what they have paid off the mortgage. Therefore the mortgage company will be the major beneficiary of any scheme and are surprisingly silent on the protection of their element of interest.If the purchasers default or go bankrupt the mortgage company is left with a property that has little if any resale value. It must therefore be in their interest for some form of equity share to be agreed.In addition there will no doubt be properties in these blocks that have been purchased by absentee landlords or investment purchasers. Why should they benefit from taxpayers bailout?  If there is some for of equity share applied to the property we would be protecting our (the taxpayers) investment in that building.I don't see any solution as a simple one but we must remember that the majority of the leaseholders only own a share of those properties anyway due to the mortgage situation so they would not be being penalised.A solution must be found but one that sits comfortably with all shareholders.the mortgage company, the leaseholder, the freeholder and the taxpayer and hopefully the constructor/developer.But if speed is of the essence then the works need to be carried out before all the agreements are in place hence initially a basic equity share scheme

Andy Pike ● 1916d

Andy, there's a reason I put a smiley on the end. We're basically speaking about supplying defective products, that is, the cladding (along. with other materials and poor workmanship, etc).  So I see no reason why purchasers should be disadvantaged, any other product would be rectified at the supplier's not purchaser's cost. From what's been said at the Grenfell enquiry there appears to have been at worst fraudulent, at best negligent activity in the testing and specification of some cladding - obviously to be detrmined by the final conclusion of the enquiry.There is a problem in the construction and property interest with a high turnover of companies. That's why the registration, regulation and levy solution is probably more appropriate than trying to seek redress from defunct companies. There's money in property and construction so I doubt whether it will drive away reputable providers anymore than it has done in the finance industry.Of course, there is a precedent for government assistance: the bail out of banks during the 2008 financial crisis. In that case there was an equity share but in the suppliers, that is, the banks, not the customers' assets. Perhaps owners of freeholds should forfeit those freeholds if they fail to act?

Michael Ixer ● 1916d

Not sure that comment  helps the leaseholders at all. I was trying to establish if they had come up with a scheme that might have legs.There are protections in law regarding latent defects and discretionary service charge relief that apply to the public sector rtb sales.May well be an idea for govt to look at those and see if the industry is prepared to set up something similar to create a fund that can be claimed against. If public funds are to be used then some sort of equity share arrangement or a reverse rtb discount plan. With rtb, discounts have to be repaid if property is sold within a certain period this is on a sliding scale maybe something similar here.

Andy Pike ● 1916d

Andy, I suppose the one advantage of losing the election is that Labour don't have to sort out the mess created by Tory party donors? :-)

Michael Ixer ● 1916d

It was to fund initially all the work via the government to project against a Grenfell 2 and to stop the fire worry mental health aspect flat owners are having to deal with.It was then work out how to go about claiming back the money ultimately the main aim being to write into law that leaseholders do not pay for the building work.

Gabrielle OMahony ● 1916d

Apparently they are blocking freedom of information request to confirm how many buildings are impacted.

Ed Robinson ● 1917d

It was a major item on the 10pm news, Philippa. Shocking indeed

Jane Carter ● 1917d

What solution did the opposition put forward?

Andy Pike ● 1917d

The debate went on for hours.  It's scandalous the number of buildings which have problems - not just cladding - and not all over 18m high.  It seems the Tories had been whipped into not voting.  So the vote was something like 260 something to 0.https://www.theguardian.com/society/2021/feb/01/flat-owners-should-not-have-to-pay-for-cladding-removal-say-tory-mpshttps://www.insidehousing.co.uk/news/news/labour-calls-for-national-cladding-taskforce-as-it-outlines-plan-to-fix-building-safety-crisis-69371https://www.itv.com/news/2021-02-01/talking-wont-fix-our-buildings-with-flammable-cladding-after-shock-of-grenfell-fireI'm sure you can find more.It was surprising that it didn't make the evening news.

Philippa Bond ● 1917d

I agree the principle of making the builders pay but if we come down too heavy they simply go belly up and then theres no money.Insurance will be very interesting based on the terms of any policy. For instance, if the works complied with building regs at the time of the build I doubt a claim of latent defect would stand up.Hence my suggestion that somehow,  to facilitate the works starting  there has to be agreement of who pays what and what the respective shares are. There is no solution that will be 100% acceptable to any party.Otherwise everyone walks away saying 'caveat emptor' and the leaseholders are screwed.

Andy Pike ● 1917d

I do not think the tax payer should foot the bill.I really believe the developers/builders should do so.  I am sure they have liability insurance for many millions.They enjoyed the profits but they also have responsibility on this.

Ivonne Holliday ● 1917d

Why should the Leaseholder go Bankrupt and have their lives ruined. It's down to who built them and decided on this cladding used. They have made their money, now they can loose theirs. Teach them a lesson in Life.

Barbara Stevens ● 1917d

If you buy a new house  and it has cracks appear it's down to the Company who built the Estate. If the property developers, builders have built all new properties,flats etc  Canary Wharf, It must be down to who designed and built the properties.

Barbara Stevens ● 1917d

I'm not sure how it would worl its jusg a suggestion to help out and obviously detailed  valuations would need to be done and an equity share agreed. I doubt anyone would expect the taxpayer to fund without any chance of some recovery.Similar when we bailed the banks out we took a share of ownership to protect some of the tax payer contribution.It would be unfair if after the works the leaseholder sold at a profit ( profit over the original purchase price,if no profit then no recovery possible)  with no recourse from the public purse, so there has to be a mechanism to protect  at least part  of any public money used to solve the issue. Additionally some levy needs to be put on the original developers and builders to recover as much as possible without driving them to bankruptcy ( and hence no chance of getting money out of them). Its not an easy solution but one that needs to ensure it protects all those with a share in the property.

Andy Pike ● 1917d

How would that work? So my flat sells for what I paid for it? Then the government say actually give us 100k (I.e reduce your deposit by 100k) to pay back our loan? So the leaseholder still ends up paying?

Gabrielle OMahony ● 1917d

When people say the government should pay what thrh mean is we should all pay.Any contribution from the tax payer should be somehow protected at the time of any future sell on. When sold in the future a percentage of the tax payer funded contribution should be recoverable. Maybe equity shared ownership Or the blocks should be requisitioned into the public stock and all leaseholders revert to tenancies with suitable repayment of any deposits etc.

Andy Pike ● 1917d

Michael perhaps we are closer to the US and a class action against the government for not implementing the recommendations of the last public inquiry may be better :)

Ed Robinson ● 1917d

I agree with Mr Buckner's proposal regarding this. It's similar to one I've proposed in the pub (when such establishments were allowed to open). The building, developers, freeholders, managing agents should be registered, regulated and subject to a levy towards a compensation scheme to protect leaseholders and home purchasers in the me way investors are protected by the FCA and FSCS. The problem with trying to seek redress from property developers, etc directly is that many have liquidated their companies - either because of insolvency or voluntarily to avoid liabilities, or would become insolvent if action was taken against them. Part of the problem seems to be privatisation or outsourcing of some building controls by councils, which seems to have created a lax regulatory compliance attitude.I've not looked into it but I did wonder if leaseholder laws like the UK's were a contravent of some aspect of  the European Convention of Human Rights ... the peaceful enjoyment of ones possession? One for the lawyers?

Michael Ixer ● 1917d

It's the governments responsibility if they set the laws that cover building regulations which developers and builders use.

Lucille Grant ● 1917d

I fully sympathise, Gabrielle.  This is a nightmare.  A friend of mine is trying to sell his flat, but has been told it’s effectively worthless until the cladding is replaced, as no buyer will be granted a mortgage.  This situation has arisen as a result of changes in government regulations (I believe), therefore the government should surely cover the cost of this.  If not there’s a risk that wrangling as to who does have to pay, will go on for months or years thus increasing the risk of another Grenfell.

Craig Fordham ● 1917d

I agree it’s not the Leaseholder’s fault.  I wondered if they could bring in a special bankruptcy law to give bankrupt Leaseholders in such cases an immediate clean slate so that their futures are not ruined.

Martine Guy ● 1917d

It's not the Leasholder's fault, they should not have to pay anything, they should get the money from the contractor's who had been appointed to do the work. Perhaps the Leaseholder should complain to their Insurance Company as perhaps the builders should be taken to court an made to pay for the unsafe cladding, not the residents. Putting residents lives at risk.

Barbara Stevens ● 1917d

Thank you for your help with this.  I am aware and again shocked by Wade's loan proposal. For others not aware the government would loan the freeholder the costs who would then pass this (with interest) to the leaseholders on a 30 year term.Result: flat prices fall by the cost of the loan.How is this an answer? Fleur has been very supportive of this. Problem we have is the size of the Tory majority...

Gabrielle OMahony ● 1917d

The current solution, proposed by Michael Wade to the Ministry of Housing, is for the work to be paid for by loans to the building, to be passed on to leaseholders. I have been working with Leasehold Knowledge Partnership on an alternative funding proposal, which you can read about here https://www.leaseholdknowledge.com/here-is-how-to-avoid-dumping-the-cladding-scandal-bill-on-leaseholders-or-taxpayers/I discussed the problem with Fleur Anderson this afternoon who has been totally supportive. More to come, I hope.

D. E. Buckner ● 1917d

I feel really sorry for Leaseholders.  There was something on the news last week about a young woman who said she bought a home age 27 and was bankrupt at 28.  She was back living with her dad and said her future had been ruined.  Her mortgage had been £300 per month, but it was the extra service charges of another £300 per month that she couldn’t afford.  Can’t remember if the extra money was to pay for a guard to check the building wasn’t on fire, which I know some Leaseholders are paying for.

Martine Guy ● 1917d

Thanks!The whole situation is truly worrying. Blocks under 18m high are forgotten about - cannot apply for a fund which is £ bns too small anyway.Our block (remaining nameless) is estimated at £1.3-1.8m to fix.  I worked out that this would be 80-100k for my flat. How are we expected to pay this and why are we (as leaseholders) footing the bill.

Gabrielle OMahony ● 1917d