Unsafe building cladding - who should pay?

[fez]

I wonder what percentage of the leaseholders also own a share in the freehold company. I know of many leasehold developments that operates like that, the company then employ a management company to run it.

In our old flat you had a single share I believe for whatever reason.

This is just like so many areas of society, there are so few consequences for intentionally illegal behaviour that its not even a consideration for the unscrupulous.

The major banks literally laugh at any fine that is imposed on them because the behaviour that brought the fine will have netted them many times the profit of the fine.

If the government keeps picking up the slack when these things happen then it just encourages it further. The flat owners shouldn't be responsible for the costs unless they have purchased a flat since Grenfell and didn't bother to get a proper survey or they ignored what it said. This should be entirely on the people who built them/sold the materials or made the materials depending on who was lying where.

The price of a flat and who owns it has nothing to do with it. Just because we could afford to do something, doesn't mean we should be forced to bear the costs of someone elses mistakes.

Those who were desperate to get onto the property ladder at whatever cost are now paying the price.

The problem with this thinking is that unfortunately whilst it makes sense logically, the price of renting in this country is completely tied to house prices and you have to buy or rent.

The longer you leave it to buy, the worse off you will be. The housing market doesn't show any signs of crashing any time soon and the only way you win this game is by not owning at precisely the moment this happens.

 

[shiver]

So looks like tax payers will pay after all? https://www.bbc.co.uk/news/uk-56013464

 

[Surveyor]

So looks like tax payers will pay after all? https://www.bbc.co.uk/news/uk-56013464

It looks like leasholders and future purchasers of new property will be bearing at least some of the costs:

However, where cladding needed to be removed, Mr Jenrick announced a long-term scheme to protect leaseholders which would mean no leaseholder would pay more than £50 a month for the removal of unsafe cladding.

He also said a new levy would be placed on future developments.

It "cannot be right the costs fall solely on tax payers", he said, adding that the government would develop a levy targeted at developers seeking to build certain high-rise buildings in England.

He also said a new tax for the UK residential property sector would be introduced from 2022, raising money to help pay for the removal of cladding.

 

[fez]

So looks like tax payers will pay after all? https://www.bbc.co.uk/news/uk-56013464

Of course we are. Going after companies, builders etc would be insanely expensive and probably result in a huge legal bill and very little in the way of actual collections. It would either bankrupt the companies involved who will simply shutdown and reopen under another name or they won't be able to prove who was at fault.

Imagine trying to take thousands of companies to court, many of which could be in Europe and you have to decide who was ultimately at fault, who did what and who should pay. Then try getting that blood from a stone.

It was always going to fall on the tax payers.

Its one of the fundamental flaws in capitalism. We have completely insulated any sensible business owner from the consequences of their bad decisions when it comes to making money. Make hay while the sun shines and when you get caught you have already pulled the money from the company. Banking industry is rife with it and so is the building industry.

I wonder how many of the companies that fitted the unsafe cladding are also making bank from removing it now. Government contracts are a nice licence to print money and I imagine that there aren't that many companies with the expertise to work on hi-rise buildings.

 

[Washout]

I'm stuck in this situation and have known it was coming for a couple years now. Ticking time bomb as it slowly started to dawn on people they too are affected. If it weren't for Brexit and then covid the press would have got hold of it ages ago.
Bought 14 years ago as a first home and had been looking to move on to somewhere bigger as getting married soon.

Things started coming to a head when banks stopped issuing mortgages for blocks (buying new and re-mortgaging) that didn't have the requisite ews1 certs. The government changed not just the cladding types that were allowed but a host of other changes which means a lot of blocks would need looking at and altering.
My block for instance doesn't have the really bad acm cladding. Took a long time to get the checks done as only a few vendors out there had the necessary insurance to do it. Plenty, it seems, have the expertise but it all comes down to liability in these things and not common sense.

Our report came back and made very grim reading. Insufficient firebreaks between floors and a host of other things. We're questioning some of those findings as you do wonder how much certain parties are going to be making from all of this mess over the next few years. There will be plenty of companies offering these services springing up out of the mud I bet. End result is the fire brigade insist on 24/7 waking watches (who spend most of their time sitting on stairwells on their phones) until new, no doubt stupidly expensive, fire alarms are installed by balconies to detect heat from a rising fire. Dreading next service charge bill.

From my understanding though we don't just not comply with the new standard but surely insufficient fire breaks would be breaching the older regulations?! I believe our leaseholder committee have gone to the developer with those finding because luckily they are still on site building new homes (some of which they've already had to hastily correct). We're not talking cheap flats either - these are 1 beds starting in the 400k+ range. No doubt they won't do anything unless forced and indeed could be looking to make some £ if the government funds come through. If they don't make it right there is already a plan to ensure the potential buyers of new builds are aware of what is going on.

Have to wonder how long this will all rumble on for. The government should initially cover the cost as they've essentially moved the goal posts, don't get me wrong - they've done it for right reasons, but after years of letting the building industry do as they please. They should absolutely go after the building firms and surveyors to recoup these costs.
I'm now stuck here for the foreseeable in what the report says is a tinderbox. How true that is I don't know - there have been a couple serious fires in the past and they've always seemed to be contained well within the home it started in.

 

[fez]

The problem is how far the regulations go as well. You can't just start ripping blocks of flats apart to make them perfectly safe from fire. The other thing is that the tax payer shouldn't be on the hook for the government deciding to do that in social housing. You would have to rehome the people in the short term and then literally refurbish the whole block if you decide that certain regulations haven't been followed and there is a risk of fires spreading. Cladding is a very obvious one as it allows the fire to spread between floors very easily but internal issues, I don't know.

We had some problems with damp in our flat that was caused by a failed damp proofing system and the management company didn't want to know because to fix that sort of thing would cost a huge amount.

I'm so glad we are out of our flat as the management fees were ~£180/month by the time we left and I have no idea if they would have had to pay out for any modifications as a result of the updated regulations. There was always the worry of serious work needing to be done in one of the blocks that were bundled together and getting a massive bill through the door. When you saw the yearly accounts it was crazy how much stupid stuff costs when its run by a management company and you have to pay for stuff like gardeners, someone to change lightbulbs etc. Oh and £40k for the management companies services.

 

[silvagti]

We have completely insulated any sensible business owner from the consequences of their bad decisions when it comes to making money. Make hay while the sun shines and when you get caught you have already pulled the money from the company.

I wonder how many of the companies that fitted the unsafe cladding are also making bank from removing it now.

I can't help but feel the law needs changing if a builder can fit flammable material to the side of buildings and suffer no financial penalty when the issue is discovered. As you say it's likely the same builders responsible will actually profit further removing the unsafe cladding they installed!

Seems crazy we have a system that seemingly provides incentive for builders to bodge a job and cut corners to save money in the knowledge that even if they're caught out they won't have to pick up the tab.

As the saying goes "socialise the losses ; privatise the gains!". Heads I win and tails the taxpayer loses! Moral hazard. Rewarding failure. It's all very similar to what happened during the 2008 financial crisis.