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Concerned about cladding on your residential building?

Business Weekly / 24 February 2021

If you are a landlord or a tenant of a residential building with cladding, the legal picture can seem daunting and confusing. Here are four common questions and answers:

I am a landlord/tenant of a residential building with cladding. What does this mean for me?
Following the Grenfell Tower fire in 2017, the Government established a Building Safety Programme identifying the characteristics of buildings with certain types of cladding systems which are unlikely to meet Building Regulations guidance. The buildings identified are residential buildings of 18 metres or over with unsafe cladding systems. Local councils and fire authorities have started inspections and issued warning/improvement notices on these buildings. If your building is one of those, works will be required to remove the cladding and meet the relevant building safety requirements.

 

Who is responsible for arranging the work to remove the cladding on buildings identified by the Programme and notified as not meeting the Regulations guidance?
You will need to review the terms of the lease. Look for definitions of ‘common areas’ or ‘common parts’ and clauses indicating who is responsible for repair, improvement or remediation of these common areas/parts.

It is often the landlord who retains ownership and responsibility for the common areas/parts and these areas/parts often include the exterior and structure of the building which the cladding is fixed to. If this is the case, it is likely to be the landlord’s responsibility to arrange these works.

 

Who is responsible for paying for the works?
Start by looking at the ‘services’ and ‘service charge’ provisions in the lease to determine whether these provisions cover such work. The lease is unlikely to refer directly to cladding but may refer to remediation works for the exterior structure of the building.

You should also review the strict service charge regime under the Landlord and Tenant Act 1985 which limits the services landlords can recover from tenants as service charge and dictates how landlords should consult with and provide information to its tenants on service charges.

If the service charge regime has been followed and the service/service charge provisions of the lease include recovering costs that appear to cover the work of removing the unsafe cladding, it is likely the costs for this work can be recharged to the tenant. If not, the landlord may have to cover the cost themselves.

 

What can I do if the lease provisions are unclear on who arranges/pays for these works?
Landlords and tenants may first wish to check if they can claim under any building insurance policies or warranties in place. They should also check their eligibility to claim Government funding that has become available for works to remove unsafe cladding.

If funding from third parties is not available, landlords and tenants should try to open a discussion and come to an agreement on who will arrange and pay for the works.

If negotiations are unsuccessful, then litigation may be the only option. However, the outcome of litigation is unpredictable and often depends on interpretation of the lease.

Recent update
Leaseholders considering remortgaging/selling should note the recent consultation launched by the Royal Institution of Chartered Surveyors (RICS) on proposed valuation guidance for certain residential buildings with cladding. For more information, see https://consultations.rics.org/consult.ti/cladding/.

 

A final word from us…
Still have questions? Don’t worry. If you are a landlord or tenant and require legal advice on your particular situation, please contact our specialist Property Disputes Team.  If you’re unsure at all, it’s always sensible to take a proactive approach and seek advice at the outset.

 

 

 

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This update is for general purposes and guidance only and does not constitute legal or professional advice. You should seek legal advice before relying on its content. For advice, get in touch with your usual Greenwoods GRM contact or scroll down to complete our enquiry form.

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