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Updated government cladding policy step toward more ‘palatable solution’ for leaseholders – Rudolf

by: Beth Rudolf , Conveyancing Association's Director of Delivery
  • 24/01/2022
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Updated government cladding policy step toward more ‘palatable solution’ for leaseholders – Rudolf
Towards the end of last year Michael Gove MP, as the then relatively new Secretary of State for Levelling Up, Housing and Communities, signalled the government was likely to change direction in terms of cladding.

At a Select Committee hearing, Gove seemed somewhat bewildered that leaseholders of medium-height buildings were being asked to fund the replacement of potentially dangerous cladding, when the problem was not of their making.

It has not taken long for that belief to formulate into a change of government policy and a much more forceful approach towards property developers, who now have until March to come up with a solution. Previous government plans around leaseholders having to take out loans and pick up further debt to fund a solution have been shelved.

Now, I would be the first to admit, that this change of policy is not a panacea for all the ills involved in what still is a ‘cladding crisis’ but it certainly moves us down the road towards what I hope will be a much more palatable solution, particularly for those leaseholders who have effectively been left in limbo in recent years.

There are still problems – as many leaseholders have pointed out, they have already paid a significant amount of money for the likes of 24-hour surveillance of their buildings, there are a number of non-cladding related issues to be addressed with many buildings – often more expensive than the cladding removal costs, and it remains to be seen just how much money can be recouped from the developers in order to fund this work.

Some developers have already acted without the need for a government threat. Others suggest their buildings met the regulations of the time and they shouldn’t be held responsible for that. Others say that it is the provider of the cladding itself who should be more in the firing line.

It is likely therefore that this is an issue which still has a long way to go, and this will be particularly pertinent for those leaseholders who are effectively tied to their property. Those who have not been able to remortgage or sell their properties because, firstly, lenders won’t take the risk and, secondly, neither will any potential purchaser until the problem is sorted.

Conveyancers in a ‘delicate position’

Conveyancers have been placed in a delicate position because of this, especially during a period when the guidance and regulations have changed, and that’s not a position which is going to change anytime soon. Indeed, the likelihood is that we’ll see ongoing regular updates as the government solidifies its own position.

We recently updated the Conveyancing Association’s (CA) guidance on cladding document to help member firms in this area, particularly when it comes to the External Wall System (EWS1) form, its usage, when it’s required, who completes it, etc, because conveyancers have to be clear on cladding, what the fire safety experts identify as is (and isn’t) acceptable, the official documentation, and very importantly, the implications for those who buy properties with cladding attached or indeed other external wall system issues.

The good news however is there does appear to be a recognition of urgency from the government and moves towards an acceptance that leaseholders shouldn’t be held responsible for the ills of a building which they never knew about and were way beyond their control.

This newfound impetus in property matters can also be evidenced by the government’s launch of its open consultation on supporting the greater use of commonhold, rather than leasehold – a view the CA has held for a number of years and one which we support wholeheartedly.

In a way the move to commonhold, putting owners much more in control of their properties and buildings, plus this cladding shift, is perhaps further evidence that we are winning key arguments about how the UK housing market should look, and what we require to get to a much fairer system for all.

As we start a new year that should keep us all motivated, to see the progress that is being made, and to continue our work in making our other aims and plans for the sector more of a reality.

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