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Fire Safety Bill will see leaseholders go bankrupt from huge remediation costs

4 min read

Whatever shameless spin is placed on this, the bottom line is simple - the Fire Safety Bill transfers liability to leaseholders making them legally and financially liable for huge remediation costs.

The Fire Safety Bill has now become law, despite a huge cross-party campaign in both the House of Commons and House of Lords. This is devastating news for leaseholders up and down the country, but they must not despair, there is hope and we will not give up, we will not stop campaigning and we will continue to fight for fairness for leaseholders.

It was an important Bill and formed part of the government’s response to Grenfell Tower, albeit four years later. Nobody wanted the bill to fail, but we did want the government to bring forward a compromise that protected leaseholders.

The House of Lords returned the Bill four times, which was unprecedented, as they did not want to pass the Bill without providing some form of protection for leaseholders. Whatever shameless spin is placed on this, the bottom line is simple - the Bill transfers liability to leaseholders for external walls and doors, thus making them legally and financially liable for huge remediation costs.

We are in the midst of a building safety crisis and the government has just passed the problem onto leaseholders

The government has come forward with proposals to help alleviate costs, but they focus on cladding, which is only one element of historic fire safety costs. The proposals do not help leaseholders who are receiving estimates of tens of thousands of pounds to remediate their buildings.

Sadly, the government has given no indication of when the proposals they have made will be available to leaseholders. The suggestion is they will be part of the Building Safety Bill, which is at least 18 months away from Royal Assent. Leaseholders will be going bankrupt this summer when facing these bills, on top of the huge interim costs such as Waking Watch and sky rocketing insurance premiums.

No one wants the taxpayers to pay, we want those responsible to pay. However, the government has provided £5 billion of funding for cladding over 18 metres and underwriting loans for buildings between 11 to 18 metres. We need a risk-based approach to identify what buildings need remediation and funding should be available for all historic fire safety costs, not just cladding - which is just one type of historic fire safety defect.

For example, cladding costs on a building over 18 metres may be paid for by government, but the leaseholder will still face bills of tens of thousands of pounds for other historic fire safety costs, so the building will not be safe, as the leaseholder does not have the funds to cover it. The bank won't lend it to them, as they are already mortgaged and dropping in value, so where are they going to find the cash - quite simply they are not.

It is clear to everyone that leaseholders do not have the funds to pay for these huge remediation costs and as a result it will not make any buildings safer. We are in the midst of a building safety crisis and the government has just passed the problem onto leaseholders, because no one else has been able to resolve it over the last four years. Freeholders do not have the cashflow and funds to make our buildings safe either, so the reality is the government will have to step in if we want to see our buildings made safe.

The government must provide a safety net in the form of the cashflow up front to help leaseholders and then reclaim it in annual levies on those responsible in the building, insurance and building regulator industries for example. I urge the government to prevent any bills being passed onto leaseholders until their proposals to help leaseholders are operational and on a statutory footing.


Stephen McPartland is the Conservative MP for Stevenage.

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