Leaseholders left in the dark over costs of uncovered building defects

The government has admitted it has not estimated the costs leaseholders face for defects that fall outside the scope of the Developer Remediation Contract.

The contract requires developers to fund the remediation of qualifying fire safety defects in buildings they developed but does not cover every defect affecting leaseholders.

The news comes as a report by Propertymark reveals leaseholders remain trapped by rising costs and are unable to sell their homes.

Leaseholders can benefit from protections

In a written parliamentary question, Liberal Democrat MP Gideon Amos, said: “What estimate has the government made of the costs that leaseholders face for defects which lie outside the scope of the developer remediation contract.”

Homeless minister Florence Eshalomi said: “The government has not made an estimate of the costs leaseholders face for defects that fall outside the scope of the Developer Remediation Contract.

“However, leaseholders can benefit from protections under the Building Safety Act 2022, which limit or prevent many historical building safety remediation costs from being passed on to qualifying leaseholders. Where costs are not covered by the Contract, it may also be possible to pursue developers, landlords or associated companies through Remediation Contribution Orders or other redress measures established by the Act.”

Increase in service charges

As previously reported by Property118, Propertymark’s leasehold still a life sentence report reveals that progress on leasehold reform has been slow, with estate agents continuing to struggle to sell leasehold properties.

More than 86% of leaseholders reported increases in service charges over the past 24 months, with 62% seeing rises of more than 21% and more than one in four reporting increases of over 60%.

Rising costs are also affecting sales, with 58% of leaseholders saying service charges and 53% saying ground rent had a major impact on their ability to sell their property.

Estate agents are facing similar challenges, with less than 1% saying selling leasehold properties has become easier, while more than 76% said it has become more difficult.