….but what about leaseholders living in social housing buildings?
Yes, defective cladding will be removed from their homes via a £400m government fund for social housing sites, but the debate about who pays for extra measures – such as sprinklers – still rumbles on.
Tower blocks owned by housing associations and councils often have a mix of tenures.
Although the majority of residents are usually social housing renters, they frequently live alongside leaseholders and shared owners who have bought their homes.
This presents a problem for social landlords.
Following the Grenfell Tower tragedy, many housing associations and local authorities decided to fit additional fire safety features.
But who should now pick up the bill?
Is it leaseholders via their service charges or social landlords and, indirectly, their tenants?
For housing providers currently making these decisions, there are some key considerations:
When can costs be recovered from leaseholders?
Leaseholders may be legally bound to cover the cost of fire safety retrofitting, but this depends on clauses in their particular leases.
When I spoke to housing management lawyer, Emma Hardman from Anthony Collins Solicitors LLP, she explained that liability will also depend on the scope and reasonableness of the works. Recommendations by the fire authorities can often help support a reasonableness case.
What are the risks of legal challenge?
Social landlords that don’t re-charge could open themselves up to legal challenge from tenants.
Failing to recoup reasonable costs from leaseholders would mean that works are paid for indirectly by tenants and landlords are potentially failing in their fiduciary duty.
On the flip side, when the London Borough of Wandsworth tried to recover sprinkler costs from leaseholders, their action was disputed as unreasonable and the case has now gone to a property tribunal.
In the immediate aftermath of Grenfell, some private landlords successfully argued in tribunal that costs for remedial action, including 24-hour waking watch services, were recoverable: they were deemed reasonable and that residents were gaining the benefit of those services and works.
Emma Hardman emphasised that social landlords also have to consider their regulatory responsibilities under the Governance and Financial Viability Standard, with the Regulator taking a much closer interest in health and safety issues.
How are other social landlords funding works?
There are reports of some local authorities paying for sprinklers in social homes via council tax.
Other councils have asked central government to fund the fire safety features they are fitting, without success.
How important is consultation?
Engaging leaseholders and tenants around proposed works is crucial both legally and in terms of gaining understanding and support.
“It goes beyond the requirements of section 20 consultation,” says Emma Hardman.
This is reflected in the Hackitt Review, last year’s social housing green paper and the recent Leasehold Reform report.
How to pay for fire safety improvements is a problematic, highly charged issue for social landlords.
With the success of a campaign asking government to fund cladding removal in private blocks, will pressure also mount on social landlords or central government to cover additional fire safety measures, so individual leaseholders don’t have to?