New laws announced to protect leaseholders in the debate over who is responsible for building safety costs

Secretary of State for Levelling Up, Michael Gove, has announced that strict new measures will be enforced to ensure industry pay to remove cladding, protecting leaseholders from excessive costs.  

Secretary of State for Levelling Up, Michael Gove

For those in the industry who choose not to cooperate, the government will be able to block planning permission and building control sign-off on developments, effectively preventing them from building and selling new homes.

The proposals will see the industry pay to fix historical problems, freeing thousands of innocent leaseholders from financial burden, while enforcing a common-sense approach to avoid unnecessary work.

Reflecting the scale of the problem, the government will also be able to apply its new building safety levy to more developments, with scope for higher rates for those who do not participate in finding a workable solution.

Alongside further leaseholder legal protections, courts will also be given new powers to stop developers using shadowy shell companies, which make them difficult to trace or identify who they are run by, so they can avoid taking responsibility for their actions.

If passed by parliament, these amendments to the Building Safety Bill will be brought into law.

Michael Gove said: “It is time to bring this scandal to an end, protect leaseholders and see the industry work together to deliver a solution.

“These measures will stop building owners passing all costs on to leaseholders and make sure any repairs are proportionate and necessary to their safety.

“All industry must play a part, instead of continuing to profit whilst hardworking families struggle.

“We will take action to keep homes safe and to protect existing leaseholders from paying the price for bad development.”

Amendments to the Building Safety Bill will also allow building owners and landlords to take legal action against manufacturers who used defective products on a home that has since been found unfit for habitation. The power will stretch back 30 years and allow recovery where costs have already been paid out.

New clauses will also cement in law the commitment the Levelling Up Secretary made in the House of Commons in January that no leaseholder living in their own home or sub-letting in a building over 11m, ever pays a penny for the removal of dangerous cladding.

If passed by Parliament, these clauses will hugely reduce the invoices that have been sent to leaseholders for taking down cladding, in some cases over £100,000.

In the small number of cases where building owners do not have the resources to pay, leaseholders will be protected by a cap. The cap will be set at a similar level to ‘Florrie’s Law’ which applies to some repairs to social housing: £10,000 for homes outside London and £15,000 for homes in the capital.

Any costs paid out by leaseholders in the past five years will count towards the cap, meaning some leaseholders will pay nothing more. According to the government, the provisions will protect leaseholders and encourage a more proportionate approach to fixing buildings.

The proposed government amendments are due to be debated in the House of Lords during the Committee Stage of the Building Safety Bill which begins on Monday 21^st February 2022.

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