9 June 20229 June 2022 derek

Our meeting with DLUHC

Politics

On Tuesday 7 June, we met with Michael Gove’s officials to discuss our ongoing concerns around the leaseholder protections in the Building Safety Act, as well as to hear an update on the Act’s secondary legislation. 

We focused on the various funding schemes including the lack of action on the ground following the pledges by the major developers as well as those foreign and SME developers that receive taxpayer funding but have not yet committed to making their buildings safe. We also highlighted the clear requirement to improve the Building Safety Fund process, and where lessons had to be learned for the forthcoming mid-rise orphan remediation funding mechanism.

We highlighted longstanding concerns with building insurance and the lack of a clear plan to ease the harm leaseholders have suffered for years. We also discussed issues relating to the Fire Safety Act now being implemented and the heavy-handed manner in which fire brigades were now forcing waking watches on buildings of all heights – we have asked for a joint meeting with officials from DLUHC and the Home Office alongside the NFCC to ensure there is action on the disproportionate and unfair approach now being undertaken.

We were also assured that the Department is continuing to engage with lenders to find a solution to the EWS1 requirement, which is preventing the sale or remortgage of affected flats with the joint statement by UK Finance, the Building Societies Association and RICS not yet having any discernible positive effect on lending. We will continue to press for updates on this important aspect of the Building Safety Crisis as the frozen market is preventing thousands of people from moving on with their lives.

We requested confirmation that qualifying leases in buildings with Resident Management Companies (RMC) or Right to Manage (RTM) are included in the ‘waterfall’ mechanism of the Building Safety Act, and this has now been formally clarified by DLUHC – see the statement on Twitter.

We made clear that we welcomed this vital clarification but reiterated that it was long overdue and that there are still many unanswered questions, leaving leaseholders understandably confused about their own situation within the Building Safety Crisis. DLUHC confirmed that it is committed to improving communication on leaseholder protections under the Act, and we have also fed back our concerns on the many areas where the resident portal can be improved. We also discussed potential simple online tools that would improve the information available to help leaseholders understand and navigate their specific circumstances.

We were provided with a high-level overview of the Building Safety Act’s secondary legislation, which will initially focus on the practical requirements to enable certification of qualifying leases eligible for the Act’s protections. This legislation will be introduced to Parliament from 28 June.

We continue to highlight the many areas that need further attention and resolution from the Department, including (but not limited to) orphaned buildings, Buy-To-Let leaseholders with more than three properties, enfranchised buildings, and buildings under 11m. No leaseholder in any of these positions is responsible for the unsafe materials or shoddy construction at their building and we remain clear that all leaseholders are innocent and must be protected from these costs.

All we have ever asked for is simple legislation that truly protects all innocent leaseholders – instead, the Secretary of State has elected to take an inordinately complex approach. We will continue to hold Mr Gove to account, and we will not let him forget that the approach being taken will still force many innocent leaseholders to pay and is not the morally decent solution he said he would deliver.

In closing, while we are not in a position to offer advice to leaseholders who may receive service charge demands for remedial works before 28 June, our personal view if/when any such demand is received is not dissimilar to that put forward by Mr Gove to the LUHC Select Committee on 21 February in terms of pushing back with reference to the forthcoming law:

“Q211 Mary Robinson: Previously, you said, if a freeholder is demanding a sum, that they should just demur really and say, “Wait for the legislation”. Is that the position?

Michael Gove: That is certainly what I would do, yes. We are clear where the responsibility lies and that is what we are seeking to achieve through the amendments. There is one thing I should say to be fair to the Chair’s point about freeholders themselves. As a result of the amendments we are bringing forward, freeholders will also have additional abilities and powers to pursue developers and others that they believe have landed them in it. It is not the case that they are not being provided with the tools required. I would not want anyone to think that they would have to hand over large sums now, when the whole aim of the legislation is to protect them.”

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