Who pays?

The Fire Safety Act, 2021 received Royal Assent and became law on 29th April, 2021 (‘the Act’). It was passed as a direct consequence of the awful events at Grenfell Tower in June 2017 which led to the death of 72 people. A fire had broken out in a flat on the fourth floor of the building following the malfunctioning of a fridge/freezer and rapidly spread up the exterior of the building. An Inquiry, set up later in 2017, established that cladding on the building failed to comply with building regulations enabling the fire to spread. A ‘stay put’ policy, common in high rise buildings, led to residents being trapped in their flats and those that attempted to escape were trapped in the one smoke filled narrow common staircase. The fire brigade, too, encountered difficulties from a lack of mains water pressure and the late arrival of high ladders.

Dame Judith Hackitt chaired a separate inquiry reviewing building and fire regulations. She published an initial report in December 2017 with a final Part 1 report in May 2018. Dame Hackitt described the building regulatory system as ‘not fit for purpose’ and recommended changes. The government of the day instigated investiations into the use of cladding materials and hundreds of high rise buildings were identified as requiring remediation works. A government fund was established but as it became more and more apparent that many more buildings required cladding to be removed, it was clear the fund was inadequate. The question arose as to who was to pay for remedial works not covered by the fund. It became apparent that in some instances, flat owners would be called upon to meet the costs of the required works through no fault of their own.

Before the passing of the Act, members of both Houses of Parliament put forward amendments to the Bill to protect leasehold owners from having to bear the cost of the required remedial works. Despite assurances from the Ministry of Housing, Communities and Local Government in a press release dated 10th February 2021 that “Hundreds of thousands of leaseholders will be protected from the cost of replacing unsafe cladding on their homes”, the proposed amendments to the Bill were refused. However, the government has announced its intention to introduce a new tax which “will be introduced for the UK residential property development sector. This will raise at least £2 billion over a decade to help pay for cladding remediation costs.” Time will tell.

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