This will be fixed at no more than £10,000 per leaseholder (or £15,000 in London) for all but the most expensive properties, as you can see in the below table. Where building owners do not have these means to pay for any remaining non-cladding defects, they will be legally able to recoup some costs from leaseholders in their building to help pay for works required. Accordingly, building owners must draw on these sources of funding, and will be legally prevented from charging leaseholders any amount for this sort of work. The government’s Building Safety Fund is available to fund all cladding remediation above 18 metres and we plan for contributions from industry to fund all cladding remediation above 11 metres.
BILL CAPSY FULL
We have set out in the Bill that we expect all owners with net worth of over £2 million, per affected building they own, to pay in full for these works.Īdditionally, where a building requires external cladding to be removed or remediated, the Building Safety Bill sets out that a building owner cannot pass on any of these costs to leaseholders in their building. Where building owners have the means and wealth to pay in full for historical remediation works in their building, they will not be legally able to charge leaseholders any costs for those works. The Building Safety Bill is clear – developers are on the hook for fixing their own buildings (both cladding and non-cladding defects), and only where they cannot be traced will building owners be required to pay for remediation works in their building. How do these leaseholder protections work? We have accordingly included new protections for leaseholders in the Building Safety Bill, limiting in law the total amount any leaseholder will pay towards remediation in their lifetime. We recognise of course that not all building owners will have the means or ability to pay the full costs of remediation, and may still need to raise some of the funding required from leaseholders in their building. These clauses will set out in law the principle that government has long advocated that building owners should not pass on costs to leaseholders for remediation works wherever possible. The Building Safety Bill now includes clauses that seek to change the terms of these leases, making building owners liable for the costs of remediating historical safety defects in a building. This might include costs to replace flammable cladding on the outside walls of their building or internal issues such as a lack of fire doors or alarm systems. This means that leaseholders across the country are facing extortionate costs – of over £100,000 each in some cases – to fix safety defects which pose a significant fire risk in their building. The government has made a number of changes to its Building Safety Bill to shift the responsibility for paying remediation costs from the leaseholders in a building, to the freeholders or owners of a building.Ĭurrently, when a person buys a leasehold property, the lease usually specifies that they are legally liable for a share of all the costs of maintenance or repair in their property or building. How will the Building Safety Bill change who pays for remediation works? This factsheet explains what will happen in the minority of cases where that developer cannot be traced, or no longer exists.
We expect that remediation of the majority of buildings will accordingly be conducted, or funded, by the developer responsible for the safety defects. New powers are being taken in the Building Safety Bill to compel companies to remediate the buildings for which they are responsible – this includes the ability to block non-compliant companies from building again in England. The government is taking significant action to ensure that industry fixes the mistakes it has made.
We are clear that we want those responsible for building defective buildings – developers and construction products manufacturers – to pay the bulk of costs for remediation. It is unfair that innocent leaseholders, most of whom have worked hard and made sacrifices to get a foot on the housing ladder, should be landed with bills they cannot afford to fix problems they did not cause.