Shining Wit

Registered with Property118.com
Sunday 3rd November 2013


Latest Comments

Total Number of Property118 Comments: 25

Shining Wit

20:25 PM, 1st May 2021
About 2 weeks ago

New code of practice for assessing cladding

Reply to the comment left by Badger at 01/05/2021 - 10:20
No, what we need is a system the forces building owners to inspect (at leaseholders expense) the buildings to see how safe they are. Now arrange for the works to be carried out. Ensure that the managing agents add a management fee (say 15%), and add VAT at 20% on top of that.
Don’t give the leaseholders and say in what works are done, or which companies carry them out.

Now pass the entire bill onto the leaseholders – who, when they ‘bought their home’ carried out all possible due diligence checks to ensure everything was safe and secure.

Obviously, charge the leaseholders for the work BEFORE you do anything, threaten forfeiture to any lease holder that doesn’t pay up, in full, in a couple of weeks – but don’t actually start the work until all the money has been collected (ie after the legal actions have been completed).

If a leaseholder does forfeit their lease, they are still liable for the outstanding service charge sums, and they still owe the outstanding mortgage (despite not having a home any more).

If the building has serious defects, employ a waking watch system – a couple of night-watchmen who sit on the fire escape stairs playing video games, while officially looking out for any fires and helping to evacuate the residents. Again, pass on the whole bill to the leaseholders, but don’t give them any say in what they are having to pay for.

Government relaxation of the regulations, followed by a failure to inspect and check, combined with unscrupulous practices of builders/developers and material manufacturers (saving money by not bothering with expensive safety works - eg proper fire-breaks - or actively selling materials that were KNOWN to be dangerous and entirely unfit for purpose respectively) can now be properly rewarded. Allow them to charge yet more money to fix faults/deliver the safe materials they should have been selling in the first place – and charging VAT on it all - seems entirely reasonable. Pass all the costs onto the leaseholders....

Leaseholders don’t own the buildings, they didn’t specify the materials, or skip the inspections. They had no part in any of the failings.
At the end of the lease the property reverts to the freeholder…

Can anyone think of a good reason why leaseholders shouldn’t pay for all the remediation? Surely they will all be able to find the necessary sixty or seventy THOUSAND pound bills.

Shared ownership?, No problem, pass the full share of costs on to the part owner.

Sounds reasonable, right?

It’s called the Fire Safety Bill – no protection for leaseholders from monstrous costs .

OK, there are a couple of government wheezes to offer limited help, so a subset of leaseholders, that are able to jump through all the hoops – but it isn’t part of the actual legislation, and it isn’t guaranteed. If the application fails, the full costs stay with the leaseholder.

Simples?
Fair?
I'll leave you to decide.... Read More

Shining Wit

15:53 PM, 22nd April 2021
About 3 weeks ago

Cladding Remediation: Cost of alternative accommodation?

Reply to the comment left by Ian Narbeth at 22/04/2021 - 14:32
Thanks for your comments Ian.

Agreed, someone has to pay.

The government proposal of grants (which only cover part of the remediation required) and forced loans both require the government to provide the cash. The loans will be paid back at £50pcm, the grants wont. So the leaseholder(s) pay for ‘excluded’ (but still mandatory) remediation (over which they have no control) and the taxpayer pays (at least in the short term) for the rest….

The problem is that the ‘guilty’ parties aren’t generally available to be charged. The problem is the culmination of a number of separate failings: Government relaxed the regulations, Manufacturers lied about their materials, builders took short cuts on safety work, Local Authorities signed off without inspection, etc.
(Local) Government don't have their own money to provide redress.
The original developers/freeholders have often ‘disappeared'. Some are still trading and a few have set-aside funds to pay for (some) remediation work.

The leaseholders had no part in failings – they bought flats having done the due diligence to check that they were safe and fit for purpose. Now they are living in potentially unsafe buildings, not knowing how soon they will be ‘asked’ to contribute what could be life-destroying sums (the government quote £10k per leasehold, the figures quoted in the recent commons debate were over £70k, and I’ve seen quite a few different figures of over £100k - the highest being £156k!
Many blocks haven’t been assessed yet, so the true extent of the problem is only now being revealed. Many leaseholders are still in blissful ignorance of the situation in their buildings…

As an analogy: if you bought a defective car (where they decided not to fit brakes, and the seats were made of highly flammable material), you would expect it to be fixed and made fit for purpose. The analogy is for the government to pay to fix the flammable (cladding) materials, but not the (fire) brakes – but only if you have a (high-rise) SUV; if you have a (low-rise) estate, you get a loan to cover the remediation (which will take you 80-odd years to repay, or as it is somehow attached to the car, you will have to drop your selling price if you sell the car/flat).
However, please note that can only have your grant payment if you complete the (fully costed) application by June, start the work by September, and have it all finished by next September – when there aren’t enough qualified workmen to undertake the surveys and quote for the works (let alone actually do the repairs – which on high-rise blocks do have a tendency to overrun).

You make an interesting point about the hypothecated tax – and yet that is exactly what the government has already proposed with the £2Bn ‘developer levy’ (which is included in the recent £3.5Bn increase to the Building Safety Fund) and the recently introduced ‘Overseas Purchaser Stamp Duty’ (apparently aimed at reducing Rough Sleeping in England.

I am not an expert – but I have been horrified by what I have recently learnt about the background to the Grenfell Tragedy and the details of the so-called 'Cladding Scandal' (which actually encompasses so much more) – that has been revealed by the tragedy and the subsequent inquiry.

Dumping the costs onto the leaseholders is wrong.... Read More

Shining Wit

14:31 PM, 21st April 2021
About 3 weeks ago

Cladding Remediation: Cost of alternative accommodation?

Reply to the comment left by Ian Narbeth at 15/04/2021 - 10:26
Hi Ian,
apologies for the tardy response.
Essentially, the NO COST TO TAXPAYER solution is that used in Victoria (Australia) where they have successfully dealt with the same problem - and advocated by the Leasehold Knowledge Partnership (https://www.leaseholdknowledge.com/) whereby a massive long-term bond is issued (at a rate attractive to Pension Funds and the like to purchase), the funds raised are used to remediate the cladding issues, and the bond repaid over many years from funds raised by other 'levies' - which could be on developers, overseas property purchasers, ground rent taxes, etc, etc.
The problem is so huge (lowest realistic estimates are £16 billion) that it needs government intervention (for the cash flow) - but the actual funding doesn't come from the government/taxpayer.

The government policy of grants (which dont cover all the issues) for over 18m buildings, and forced loans for under 18m (which could take 85 years to repay at zero interest) - and who is going to pay the up-front cost for either? - is just so unfair on taxpayer AND leaseholder (the two innocent groups).... Read More

Shining Wit

14:08 PM, 10th April 2021
About a month ago

Cladding Remediation: Cost of alternative accommodation?

For those that aren't aware, this so called 'cladding scandal' is the result of the Grenfell Tower tragedy (and subsequent inquest). Essentially, due to Government negligence, developers were allowed to build flats that were wrapped in 'dangerously flammable materials' (typically with the fire retardant property of petrol.... watch YouTube videos to see how quickly the fire spread at Grenfell). The manufacturers of the cladding actually knew the materials were unsuitable (and how badly they failed the tests), but sold them anyway. Then the builders took shortcuts (like forgetting about fire compartmentation, and proper fire doors etc) to save money. Nobody bothered to check the buildings when they were 'signed off'. There are now literally hundreds of tower blocks across the country that are potentially unsafe.

Leaseholders (ie people who bought their homes, but don't actually own the property, because the freeholder does) are now liable to pay for the remediation - the costs recently quoted in the House of Commons debate are over £70,000, per flat - and as the bill is usually presented as part of a Service Charge demand, you have a couple of weeks to pay (in full) or risk forfeiting the lease. In the meantime, Leaseholders are liable for Waking Watch costs (essentially paying someone to sit around the building just in case a fire breaks out) and Insurance costs have rocketed: typically 10-15 times higher than last year.
Homelessness and bankruptcy loom for many flat leaseholders - it is already happening.

There are various proposals that would protect Leaseholders from the cost of fixing historic fire safety faults at NO COST TO THE TAXPAYER - but the government has rejected them.
The government 'solution' is to offer grants (with lots of caveats) - to cover the cost of some remediation (ie cladding only - but not all dangerous cladding types) if the flat is in an 18m building. For anyone in a smaller building, a forced loan (although the precise details as to who this will work, and what it will cover are still lacking) should be available (no more than £50 per month) - with the balance of the loan, presumably, coming off any eventual sale price.

Leaseholders are the innocent victims - they had no part in creating any of the problems that now need addressing - and yet they are now face life-destroying bills - they should be protected, and this protection could be available at NO COST to the taxpayer.
Pleas help to
#EndOurCladdingScandal... Read More

Shining Wit

16:54 PM, 27th February 2021
About 3 months ago

Cladding and owners liquidation?

My understanding is that, as leaseholders, you will be liable for the remediation.
If the building is higher than 18m, the owner can apply for a grant to cover the cladding removal (but none of the other fire safety defects), so in your case, you will pay the full bill.
If the building is less than 18m, you will be eligible for a loan (against the property) that you will repay at no more than £50pcm - for about 80 years. If/when you sell, the buyer will probably expect you to discount the price to compensate for the loss (but at least it has been affordable for 80 years, eh).

Until the work is done, the property will probably be given a zero value - so don't try to sell or remortgage - and if its serious, you'll have to pay for 24*7 waking watch or immediately evacuate the building.

It wasn't your fault that the building regs weren't adequate, or applied properly, that the builders took shortcuts to save (them) money, or that the cladding and insulation materials were known to be highly flammable - but as a leaseholder, it's only right that you (rather than any of the culpable parties) pay isn't it.

Good luck. It is a national scandal, which is, only now receiving the media attention it needs - as leaseholders finally discover the true cost - I've seen quotes for over £100,000 per leaseholder, not per building - and these come as Service Charge or Section 20 demands, so you don't have much time to raid the 'piggy bank'. At least it's "affordable" (according to the government).... Read More