Years on, some buildings still have unsafe cladding – who will pay for remediation works?

19 March 2021

Over three years since the Grenfell Tower tragedy, the Fire Safety Bill and the Building Safety Bill are anticipated to come into effect early this year.

In December 2020, in a significant vote, the House of Lords proposed amendments to the Fire Safety Bill that would protect leaseholders from the remediation costs associated with the replacement of dangerous cladding panels.

In February, the House of Commons rejected those key amendments. Following the latest consideration in the House of Lords on Wednesday of this week, we review the progress of the Bill.



Developments

As we reported last year, the House of Lords approved amendments to the Fire Safety Bill, which included a provision that building owners could not pass on remediation costs required by the Bill (to address fire safety) to leaseholders or tenants.

That amendment (Amendment 4) was rejected by the House of Commons, along with two others relating to the creation of a national public register for fire risk assessments and duties for owners/managers. Amendments relating to compliance with risk-based guidance were agreed by the Commons.

House of Commons debate - 24 February 2021

When the Lords amendments were returned to the Commons in late February for debate on Amendment 4, the Minister of State for Crime and Policing, Kit Malthouse, stated that the Government agreed with "the intent to give leaseholders peace of mind and financial certainty" but that the Fire Safety Bill was "not the correct place for remediation costs to be addressed". The Fire Safety Bill is a short and specific bill dealing with fire assessments in multi-occupied residential buildings and any attempt to provide for remediation costs in that Bill would only relate to defects uncovered through a fire risk assessment.

The Minister stated explicitly that the Building Safety Bill would address remediation costs - it would be a "once-in-a-generation change to the building safety regime". He added that "it will bring about fundamental change in both the regulatory framework for building safety and the construction industry culture, creating a more accountable system to ensure that a tragedy such as Grenfell can never happen again".

Sarah Jones, a Labour MP, criticised the "snail's pace" of progress by the Government, asking for an immediate commitment that leaseholders would not have to pay for the remediation costs.

Amendment 4 was rejected by the Commons and returned to the Lords for further consideration. The reason given by the Commons was that "the issue of remediation costs is too complex to be dealt with in the manner proposed".

Return to the House of Lords - 17 March 2021

On 17 March 2021, the House of Lords considered the rejection of Amendment 4.

Whilst the report of the latest House of Lords consideration states that the Lords have not insisted on retaining the original Amendment 4, the House has, in fact, returned the same text to the Commons for consideration now set out as "Amendment 4B", together with further amendments 4C, 4D and 4E. Amendments 4B-4E are proposed by the Lords "in lieu" of the original Amendment 4.

One of the new amendments (4C) is to imply a term into all long leases of relevant buildings that the landlord will not be entitled to recover from the lessee any costs arising from notices or risk based guidance under the Fire Safety Order to remedy defects that existed prior to the first granting of a long lease. It is also proposed that an attempt to contract out of the effect of Amendment 4C will be void.

Unlimited fines

The other recent development is that on 17 March 2021, the Home Office made an announcement that those who breach fire safety regulations under the Fire Safety Order could potentially face unlimited fines - this provision will be included in the Building Safety Bill.

Next steps

The Fire Safety Bill including Amendments 4B-4E will now return to the House of Commons for further consideration, listed for 22 March 2021. We will keep you updated on developments in this area.

If you have queries on this insight or any construction issue, please contact Sue Ryan.


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