Written evidence submitted by Jake Ellis [BSB 137]

How well does the Bill, as drafted, meet the Government’s own policy intentions?

While the overall policy intentions of the Bill and much of the proposed changes are, on the whole, commendable, there are several aspects of the Bill that will set alarm bells ringing for leaseholders of flats across the country.

Specifically, the aims to improve building safety, establish more stringent oversight of building standards and giving residents a louder voice in the system are aims that I broadly support. However, the Bill as currently written will not achieve these aims for the following reasons:

• The continued reliance on a privatised, 3rd party model of building safety regulation. The major issues that are now becoming apparent in high-rise buildings due to the new EWS1 survey highlight how ludicrous a laissez-faire model of building regulation is in a modern country. A continuation of this system will not improve building safety, it will only continue to allow developers to cut corners in the materials and construction methods used.
• There is little within the Bill that makes much of what is suggested feasible. It is extremely reliant on secondary legislation, which is worrying to leaseholders as there may not be the same level of scrutiny and runs the risk of continued updating of the regulatory system – leaving many buildings in the same position as cladded buildings currently.
• Finally, and most importantly, it offers no protection to leaseholders to ensure that the costs of remediating historic building safety defects are not passed on to them. Leaseholders did not cause this issue: They did not oversee decades of regulatory failure. They did not construct these buildings. They do not own these buildings. It is a moral failing that any costs to fix these issues will be footed by those with the least amount of responsibility.

A major, much needed addition to the Bill is further protections for leaseholders to prevent any costs of historic building safety defects being passed onto them. There is also a distinct lack of transparency around any definition of what the Bill currently considers “affordable” to leaseholders. Both of these issues should have been at the front of the queue for consideration when this Bill was drafted. The fact that they weren’t is incredibly concerning.

Does the draft Bill establish an appropriate scope for the new regulatory system?

In a word: no. It fails in this regard for a number of reasons:

• It does not protect leaseholders from the cost of remediation work when addressing historic building safety defects caused by systemic regulatory failure due to decades of inadequate government oversight, or poor construction practices by developers.
• It makes it too easy for subsequent Secretaries of State to further change the spoke of the Bill via secondary legislation. While this may make it easier to rectify building safety defects, it again runs the risk of these costs being passed onto innocent leaseholders.
• There is little clarity as to which buildings come under the scope of the Bill. An issue that has been highlighted by the failed EWS1 survey over the past year. Conflicting governmental input such as Advice Note 14 has let do a system whereby no one living in a flat can sell or move until an EWS1 is obtained. The government’s refusal to address this quickly, and failure to recognise and address this via the Bill is worrying and shows that they do not have a full enough grasp of the scale and scope of historic building safety issues.
• Importantly, there is no distinction drawn between improvements and safety measures. Many changes that may need to be made to ensure compliance with the Bill are currently considered improvements under the terms of lease agreements. Ensuring compliance with building safety guidance should not be considered an improvement, it should be deemed the most fundamental of a building owners’ responsibilities.

A core part of the Bill should focus on clearly setting out the definition of a critical building safety measure and legislate to ensure that remediation costs for these are not able to be passed onto leaseholders by the government, developers or building owners. This should include all current historic safety defects that the government is aware of, as well as clearly set out how other future defects can be brought into scope.

The government and at least 5 Secretaries of State/Housing Ministers have all set out their view that “leaseholders should not pay”. Enshrining this in legislation should be at the forefront of their plans, the fact that this is not already included in the Bill is telling and worrying.

Will the Bill provide for a robust – and realistic – system of accountability for those responsible for building safety? Are the sanctions on those who do not meet their responsibilities strong enough?

No. The crux of the matter is that there is nothing contained within the Bill currently that protects leaseholders from financial responsibility for the costs of remediating historic building safety defects. Those that have created many of the issues that caused this bill to be necessary have abdicated responsibility, and this Bill does nothing to address that. While a new accountable person may be held liable for failings in building safety, it again does not address the financial responsibility for measures to rectify, remediate and replace.

Those who hold the major portion of responsibility for the current building safety crisis ruining the lives of leaseholders across the country – namely the government, developers and building owners – are not being asked to contribute towards the funding of either remediation works or the new regulatory system. This is especially suspect when developers have made large profits on the construction and sale of unsafe apartment blocks, yet those with their life savings tied up in leasehold flats are held financial responsible.

There is a working solution in Victoria, Australia which was implemented after the Lacrosse fire: their Grenfell equivalent. The government should foot the bill for remediation of historic building safety defects up-front, then recoup this money through a developer levy on new construction projects.

Will the Bill provide strong mechanisms to ensure residents are listened to when they have concerns about their building’s safety?

No. While it starts a conversation about resident engagement it fails on 2 fronts:

• Provides no mechanism to ensure that resident engagement is mandatory on the part of both government and building owner, while not defining which areas this engagement is required.
• It makes no distinction between leaseholders and residents. The latter may not be a leaseholder and therefore have less of a financial stake in the building. While both parties will wish for their building to be as safe as possible, only 1 has to worry about the costs of these measures under the Bill in its current form.

On a personal level, while any enforcing of resident engagement would be an improvement, the Bill needs to further legislate for what this engagement should actual entail, and when building owners are required to engage.

The Bill should mandate that leaseholders and residents are consulted and fully engaged with any issue that will directly affect them e.g., carrying out cost analyses and when further responsibilities will be imposed on them, financial or otherwise.

Is the Government right to propose a new Building Safety Charge? Does the bill introduce sufficient protections to ensure that leaseholders do not face excessive charges and that their funds are properly managed?

The introduction of a building safety charge to separate costs for critical safety measures from ordinary works charged under the service charge is a good idea, however the implementation and lack of clarity surrounding it leaves much to be desired.

It makes no distinction between the costs for ongoing general maintenance of safety measures and the costs for remediation of historic building safety defects. If, under the new BSF, the charges for the latter are still able to be passed onto leaseholders who had no hand in creating these issues, then the BSF fails on a moral level and should not be implemented.

I also have concerns in regard to the stripping back of leaseholder rights that they currently have under Section 20 consultations for charges over £250. The BSF seems to suggest that costs being passed on under the pretence of building safety measures will not allow leaseholders the same protections and right to dispute. It is clear that building owners will potentially seek to abuse this mechanism. The 28 day time limit for leaseholders to pay these costs is also a travesty, especially if the costs of historic remediation work (£78,000 per leaseholder as per the indicative costs table). Costs that the government has said repeatedly should not be borne by leaseholders.

Historic remediation costs should not fall under the remit of the BSF. The costs of these should be met by the responsible parties: government and developers, not leaseholders. I am also not supportive of leaseholders contributing to the costs of maintaining the new regulatory framework. The Bill, as is currently written, largely favours the interests of freeholders and building owners, yet the leaseholders foot the cost again. If these suggestions are not followed then, at the very least, the 28 day time limit for BSF charge payments should be removed immediately; it is unrealistic and unfeasible.

Is it right that the new Building Safety Regulator be established under the Health and Safety Executive, and how should it be funded?

The Building Safety Regulator should be funded by the government and the developers, with no financial contribution required from leaseholders.

Independent regulation is only required due to decades old culture of lax building regulation and construction malpractice. As has been stated repeatedly by leaseholders, as well as many government spokespeople: leaseholders should not pay.

Does the Bill present an opportunity to address other building safety issues, such as requirements for sprinkler systems?

The Bill as currently written runs the risk of falling afoul of a mistake the government has made repeatedly throughout the current building safety crisis. It assumes issues for a wide variety of different apartment blocks can be fixed with a blanket approach. As has been shown by the EWS1 fiasco, this often has both obvious and unforeseen pitfalls.

The addressing of building safety concerns should be carried out on an individual basis, making greater use of a risk-based matrix, rather than sweeping generalisations and arbitrary height limits.

It also makes very little reasonable and realistic assessment of how these measures will be funded. Until this is addressed, and the government promise that leaseholders should not pay is upheld, buildings will remain unsafe while thousands of leaseholders suffer crippling financial penalties and potential bankruptcy.

The aim of making buildings safe is an admirable one, and one which I fully support, but if costs are passed onto leaseholders the money will never be found to ensure remedial works are completed as a priority. The government has recognised this with the introduction of the Building Safety Fund, but it is increasingly clear that the £1.6b is completely inadequate to deal with the scale of the problem. The Bill does not give any indication that the government has grasped this most salient point. A simple way to ensure that costs are not passed onto leaseholders would be to legislate that these works are not recoverable under the service charge, but are separate works with financial responsibility resting with the building owners and developers.

September 2020