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MPs reject amendment to remove cladding costs from leaseholders

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  • 23/03/2021
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MPs reject amendment to remove cladding costs from leaseholders
MPs have voted against an amendment in the Fire Safety Bill to pass cladding costs on from leaseholders to building owners in the House of Commons yesterday.

 

It was returned to Parliament for consideration after the House of Lords refused to pass the bill without the amendments.  

The motion, which was tabled by Lord Bishop of St Albans Alan Smith, included a clause that said leaseholders should not pay for cladding remediation unless they were also the owner or part owner of a high-rise building. 

This was in response to the government announcing that a £3.5bn fund would be provided to correct cladding on buildings taller than 18 metres, while leaseholders of shorter buildings would pay with a government-backed loan capped at £50 a month.

 

‘Morally unacceptable’ 

During the debate Stephen McPartland, Conservative MP for Stevenage, said it was “morally unacceptable” to push the costs onto leaseholders.

He said: “Leaseholders do not want taxpayers to pay and members across the House do not want taxpayers to pay; we want those who are responsible to pay — the developers, the insurance companies and the building regulators who said that these properties were safe over the past 20 to 30 years, when many of the leaseholders who will be forced to pay these bills were in primary school or not even born.  

“It is not acceptable, it is not fair and it is not right.” 

 

Costs protecting leaseholders

In conclusion, Christopher Pincher (pictured), minister of state for housing, communities and local government, said the amendment was “unworkable and impractical. 

He added: “The amendment does not take into account remedial works that arise outside of the fire risk assessment process — for example, costs identified as a result of a safety incident or building works taking place.  

“In such cases, this will not prevent costs being passed on, so it does not deliver what members want it to do.” 

Pincher said if the amendment was added to the Bill and became law without a redrafting of legislation, the taxpayer would be liable for drawn out court proceedings. He said building owners could use litigation to claim for costs which could delay construction works. 

Pincher said the changes would also require parliamentary counsel to avoid legal challenges, something which would not be resolved during the debate. 

He added: “Furthermore, the amendments do not reflect the complexity involved in apportioning liability for remedial defects. The government [has] announced how they will distribute costs, including from developers and industry, through our upcoming levy and tax.  

“A decision through this amendment to pass all these costs to the building owner would be overly simplistic and it could be counter-productive. It would be self-defeating if landlords, faced with remediation costs, simply walked away. Many could do that. They could activate an insolvency procedure and just walk away.” 

He said it was not about protecting freeholders, but about protecting leaseholders from being left with costs if building owners refused to cover the payments. 

“There is a real risk that this amendment could make the problem worse for leaseholders. We would be left in a situation where there would be delays to the commencement of the Fire Safety Bill, delays to our wider building safety programme, greater uncertainty for leaseholders and, quite possibly, unintended and deleterious consequences for them.  

We would not be any further forward in resolving the issue,” Pincher added. 

 

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