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Lords vote blocks government from ‘penalising’ leaseholders with cladding costs

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  • 18/03/2021
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Lords vote blocks government from ‘penalising’ leaseholders with cladding costs
The House of Lords has returned the Fire Safety Bill to the House of Commons to consider an amendment which would remove the burden of cladding costs from leaseholders.

 

Some 326 members voted in favour of the motion to add changes to the bill which block building owners from passing on removal costs of remediating cladding to tenants in high rise buildings. 

The motion, tabled by Lord Bishop of St Albans Alan Smith, includes a clause which says a leaseholder must not pay for works unless they are also the owner or part owner of the freehold. 

Last month housing secretary Robert Jenrick said leaseholders in buildings shorter than 18 metres would have to pay towards remediation for unsafe cladding through a government-backed loan while the government paid for taller properties with a £3.5bn fund.

The government-backed loan will not cover any costs to fix non-cladding fire related refurbishments to make a property safer, opening up the risk of building owners imposing additional bills on leaseholders. 

The decision was criticised by the property industry and Tory MPs, despite Jenrick assuring payments would not exceed £50 a month. In February, 30 Tory ministers voted against the decision to remove previous amendments made by MPs Stephen McPartland and Royston Smith to stop leaseholders being laden with fees. 

The Intermediary Mortgage Lenders Association said it was “completely unacceptable” for leaseholders to cover the costs while brokers said they should not have to put any money towards construction. 

Meanwhile, the Leasehold Knowledge Partnership charity said a fifth of leaseholders were planning to declare bankruptcy to avoid paying. 

 

Government not meeting promises

Speaking at the debate in the House of Lords yesterday, Lord Bishop Smith said leaseholders were victims who had done nothing wrong and “deserved to be treated much better” by the government. 

He added: “They have done everything right. They have bought their properties and are paying their mortgages. Now they are being penalised for the failure of others. Surely that cannot be right.

“The fact that their buildings have been covered in dangerous cladding has made their flats worthless. They cannot sell their properties, but they are still expected to pay their mortgages and other charges.  

They cannot get work done; they may be paying for a waking watch and in some cases the properties will have guarantees on them which need to be drawn down. There will be warranties for work done which need to be used. They have been paid for, otherwise they are literally not worth the paper they are written on. 

He continued by strongly criticising ministers for not living up to their promises.

The government are failing leaseholders and tenants. Their actions are just not good enough and fall far short of what they promised. 

For the individual builder, contractor, company, warranty provider or insurance company, it cannot be right for people to wriggle out of their responsibilities. The government needs to take firm action. 

 

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