Almost 6 years after the Grenfell Tower disaster we may now finally see action to make safe the numerous other ‘Grenfell type’ buildings with hazardous cladding around the country, which in turn will end the nightmare of leaseholders stuck in flats that could not be sold.
The Building Safety Act 2022 provides a legal obligation to ensure compliance with building regulations in both design and construction and is being used to enforce remedial action to fix life-critical fire safety defects in properties over 11 metres high which have been developed or refurbished in the last 30 years. Developers have been given until 13 March to sign up to fix the unsafe buildings or face ‘naming and shaming’, as well as a ban on commencing developments for which they have planning permission or from receiving building control approval for construction that is underway.
Developers are concerned that the contract leaves them open to costs for works that go beyond ”life-critical defects” but many have signed and are expected to commit more than £2bn fixing the defective buildings.
In announcing the measures, the Government have admitted that the issues with dangerous cladding was not just the developers’ fault. Housing Secretary Michael Gove has said collective government failures regarding building regulations over many years were partly to blame for the Grenfell Tower fire, admitting that the government’s building-safety system was “faulty and ambiguous” in the years before the 2017 fire and the government did not think hard enough, or police effectively enough, the whole system of building safety.
However, Gove made a distinction between the role of the government and the role of construction-industry saying “There are sins of omission and sins of commission. There’s neglect and a failure to effectively get the system in place, which is one thing. And then there is an active willingness to put people in danger in order to make a profit, which to my mind is a significantly greater sin.” He said: “Too many developers, along with product manufacturers and freeholders, have profited from these unsafe buildings and have a moral duty to do the right thing and pay for their repair”.
In recent months, Gove has also been critical of the insurance industry in relation to the insurance of large multi-occupancy buildings and ordered an inquiry by the Financial Conduct Authority (FCA) as a result of the difficulty insuring buildings with similar cladding to Grenfell Tower after the fire. This highlighted the practice of brokers sharing large commissions with the property owners and/or managing agents. Insurance costs for Grenfell type clad properties soared following the disaster and whilst there was additional work for brokers having to find insurance markets for these risks, frequently having to ‘schedule’ cover amongst a number of insurers for the larger blocks, the property owners/managing agents also benefited from the higher premiums.
With leaseholders having no choice but to pay their share of the buildings premium Gove has now asked the FCA to introduce a fairer more transport system for leaseholders, whereby those involved in the placement of the buildings insurance are required to justify their earnings or charges made.