Industry News Eleanor Bateman 04/05/2023

Building safety failures: Are you liable for uncapped costs?

To prevent tragedies like the Grenfell Tower fire happening again, the UK Government introduced the Building Safety Act in 2022. The Act changes the way in which buildings are constructed and managed, and also seeks to ensure that leaseholders do not have to pay to fix safety failures in buildings in which they played no part developing.

The Act introduces a cap on the costs of remediating fire safety defects for some leaseholders. These are known as leaseholder protections. However, only ‘qualifying leaseholders’ are able to benefit from the protections, and landlords may find themselves liable for the full cost of fixing cladding and non-cladding defects.

The NRLA has produced a factsheet that sets out the issue and helps you to identify whether you qualify for the cost protections or not. Many landlords and homeowners are likely to be ‘non-qualifying’ and it is crucial that you are aware of whether you qualify for the protections or not, and what the implications may be.

Impact of the leaseholder protections

In conducting the survey, we hope to improve our understanding of the scale of this issue, but we do know that the consequences of the leaseholder protections are significant and potentially life altering.

For Suzy and her husband, for example, who are in their late fifties. They jointly own their family home and four buy-to-let properties, which they bought to provide security for their retirement. The rental income allows them to break even on mortgage and service charges.

They own two flats in a block that has issues with cladding, defective compartmentation, fire breaks and insulation. Remediation work on these two flats has an estimated cost of up to £100,000.

The freeholder is controlled by a large investor that has not yet accepted any responsibility for remediation and its stated position is that building owners played no part in this crisis. There is no developer to take legal action against, as it went into administration shortly after the building was completed.

As a result, Suzy and her husband will have to sell their family home and move into one of the affected flats, which cannot be sold, that are 170 miles away from their current home.

What can I do?

If you believe you are excluded from the protections, please complete this survey so that we can capture more information about who is affected and what some of the consequences of the leaseholder protections are. The survey can be completed anonymously if you wish. Your responses will be used to help inform the NRLA’s policy on building safety remediation.

Eleanor Bateman

Eleanor Bateman Senior Campaigns and Public Affairs Officer

Ellie joined the NRLA to progress its campaigning and public affairs work. Having spent six years working in town planning, Ellie became an ‘accidental landlord’ and went on to hold roles in the sales and lettings industry, both in agency and in policy and lobbying. She has amassed a wealth of experience in her 15 years working in housing at national and local levels and is passionate about making sure the needs and benefits of the private rented sector are fully recognised by Government.

See all articles by Eleanor Bateman