Insurer concedes on cladding removal cost

Landmark decision made on the basis of ‘failure to comply’ with building regulations at the time of  block’s construction.

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An insurer has stepped in to cover the cost of removing cladding from a London apartment complex where residents faced bills of up to £40k for the work.

In a landmark move, the National House Building Council (NHBC) – which had provided a 10-year warranty for homeowners in the 11-block New Capital Quay, Greenwich – conceded there was ‘a failure to comply with building regulations at the time of construction’ following ‘expert input and a review of the individual circumstances at this site’.

NHBC stressed the Greenwich decision would not set a precedent for other similar claims which would be assessed on their merits.

But the decision does have implications for other private apartment blocks around the country, with NHBC responsible for warranties on 80% of new builds and is currently covering around 1.5m homes.

Also in the loop is the construction sector, with developers and freeholders locked in disputes over who is liable to cover the cost of cladding replacement.

New Capital Quay has 2,000 residents and is believed to be the biggest single development with Grenfell-type cladding.

Those residents were facing a share of a bill estimated at between £25m and £40m for cladding and millions more for round-the-clock fire wardens, were elated with the news.

With NHBC stepping up to its share, there’s pressure on Galliard as the developer to get the work done.

NHBC said the developer was “legally responsible for ensuring compliance with building regulations. NHBC, as the building control body, does not confirm, guarantee or approve that buildings comply with building regulations.”

“As the warranty insurance provider at New Capital Quay, NHBC has investigated a claim under our policy and we can confirm that we have accepted this claim,” said NHBC.

Galliard has declined to comment.

New Capital Quay leaseholders have 10-year warranties with the NHBC to cover building defects and NHBC also signed off the development in its role as a building control organisation.

The leaseholders received a letter from the NHBC to say it would settle claims made by Galliard, which built the flats, on behalf of leaseholders “by making a payment equal to the cost of the remedial scheme, in accordance with the terms of the applicable policies.

This will include the replacement of the ACM cladding but the decision does not reference the cost of round the clock fire wardens.

Labour MP for Greenwich and Woolwich, Matthew Pennycook, who has been campaigning for a year to get help for the residents, described the decision as “fantastic news”.

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