On 17ht March 2021, the Bishop of St Albans moved a motion to amend to the Fire Safety Bill which would protect leaseholders from costs incurred in replacing flammable cladding:
The Lord Bishop of St Albans: My Lords, I speak to Motion C1 and Amendments 4B to 4E. I give notice of my intention to seek the opinion of the House when the time comes. I declare my interest in the register in that I, too, am a vice-president of the Local Government Association.
I first thank the honourable Members for Stevenage and for Southampton, Itchen, who originally prepared these amendments, as well as the signatories from all parties when they were tabled in the Commons. I also thank the right reverend Prelate the Bishop of London, who joins me in supporting it, and pay tribute to one of our colleagues, the Bishop of Kensington, who has worked very closely on the ground with victims of Grenfell and leaseholders.
Grenfell was an unmitigated tragedy brought about, it would seem, by institutional failings on multiple levels. The recent revelation that the cladding provider knew that it could result in tragedy and death is nothing short of a disgrace. It has been a tragedy for many lives: ordinary families have been ripped apart by this terrible event.
The Bill will deal with the problem of dangerous cladding by creating a quick and easy mechanism to force freeholders to remove dangerous cladding and other fire safety defects. That is undoubtedly a good thing and will, hopefully, protect against future tragedies, but I share the disappointment of the noble Lord, Lord Kennedy, that Her Majesty’s Government have not sought to address the severe adverse financial consequences that the Bill will create for leaseholders. In the Bill’s current form, whenever the fire service serves notice to the freeholder requiring remedial work to be undertaken, the freeholder will be able to force leaseholders to reimburse all the costs incurred. These costs are staggering.
At this point, I say that our hearts go out—I am sure we all share this—to all the people who are struggling. I have been inundated with emails, tweets and people contacting me who are at their wit’s end looking at what is likely to unfold in the next few weeks. Far from the Government’s estimated remedial costs of around £9,000 per leaseholder, depending on the terms of the lease and the work involved, a leaseholder could very easily be handed a bill of £50,000, payable within weeks.
Inside Housing conducted its own private survey of 1,342 leaseholders. Its findings reveal a very different picture to that of Her Majesty’s Government. Among those surveyed, 63% of respondents faced a total bill above £30,000 for remedial costs and 15% faced a bill of more than £100,000. Of course, a few of these lease- holders may be well off, some will have disposable income, but most will not: 60% had a household income of less than £50,000, with only 8.7% reporting a household income of more than £100,000. In other words, this will primarily affect ordinary middle to working-class people.
In addition, 56.4% of those surveyed were first-time buyers. They have followed that life trajectory that many Conservative Governments have sought to promote by working hard, saving and purchasing a property. These are people with aspirations—something I totally support—yet nearly everything they have worked hard towards, over many years, could be taken away from them, as shown by the alarming 17.2% of respondents who say that they are already exploring bankruptcy options. I must remind the House that the costs mentioned above include only the remedial costs; they say nothing about the interim fire safety costs that leaseholders already incur.
Government figures show that the average monthly cost of a waking watch in England is estimated at nearly £18,000 per building and around £330 per dwelling, rising to nearly £20,000 and £500 respectively in London. This is not to mention the cost of new alarm systems, ranging from £50,000 to £150,000 per block. How can this be fair or just? It was not the leaseholders who sold or fitted defective cladding; leaseholders are the innocent party. They purchased their properties in good faith, believing them to be safe. If the Bill passes unamended, it is they who will pay—not the cladding providers or the developers but hard-working ordinary people, forced to pay for defects that were deemed safe when they purchased their apartments.
I do not have the technical knowledge about how the Motion fits with the Bill and so on, and whether it would be better placed in a later Bill. What I do know is that we are faced with some immediate challenges. Any solution cannot be deferred until the building safety Bill, which could be as far as two years in the future. We have to try to do something now. Supporters of this Motion and I have argued that because this legislation creates the problem for leaseholders, it should likewise solve the problem. I acknowledge that there are some weaknesses in this Motion; it does not solve every problem for leaseholders. Even if it is passed, leaseholders will still shoulder ongoing interim fire safety costs. However, by preventing remedial costs from being passed on to leaseholders, a significant proportion of the financial burden placed on them should be eased. As one leaseholder said, “We need a solution so we can finally move on with our lives, something denied to us now for several years. We just want this nightmare to end”.
I hope that by passing this Motion, we can begin to end that nightmare and the anxiety plaguing the lives of thousands of leaseholders, allowing them to move on. The Bill solves the fire safety defects that lay at the heart of the Grenfell tragedy. The Government are absolutely right to do that and I am grateful for what they have done, but I believe they are morally wrong in their treatment of leaseholders in this crisis. By not including sufficient provision to protect leaseholders, a conscious decision would be made to impose poverty, possibly bankruptcy and certainly misery on thousands of ordinary people whose only crime was being aspirational.
Those responsible should be the ones who pay. Only the Government can provide the capital up front to pay for these works; only the Government can introduce levies on those responsible to claw back that money over the next few years. A great injustice is currently being done to leaseholders and a fair solution is needed, which is why I bring this Motion to your Lordships’ House.
The Lord Bishop of St Albans: At end insert “and do propose Amendments 4B, 4C, 4D and 4E in lieu—
4B: After Clause 2, insert the following new Clause—
“Prohibition on passing remediation costs on to leaseholders and tenants
(1) The owner of a building may not pass the costs of any remedial work attributable to the provisions of this Act on to leaseholders or tenants of that building.
(2) Subsection (1) does not apply to a leaseholder who is also the owner or part owner of the freehold of the building.”
4C: After Clause 2, insert the following new Clause—
“Costs arising from relevant notices or risk based guidance under the Fire Safety Order
(1) This section applies to a long lease of a dwelling in a relevant building.
(2) This section applies—
(a) where a notice has been served by an enforcing authority under article 28, article 29 or article 30 of the Fire Safety Order; or
(b) where a responsible person carries out works on the basis that they are required or said to be required by the risk based guidance issued by the Secretary of State under article 50 of the Fire Safety Order.
(3) In the lease there is an implied covenant by the lessor, or any third party to the lease, that the lessor or third party shall not recover from the lessee any amount in respect of the costs of works under subsection (2) where the works are to remedy any defect, risk or issue that predated the first grant of a long lease of the dwelling.
(4) Subsection (3) does not apply where the works are to repair a deterioration in original condition.
(5) Subsection (3) does not apply to any interest or shareholding the lessee may have in any superior lessor or freeholder.
(6) This section does not apply to commonhold land.
(7) “Dwelling” has the meaning given by section 112 of the Commonhold and Leasehold Reform Act 2002 and “long lease” has the meaning given by sections 76 and 77 of that Act, save that, in the case of a shared ownership lease, it is irrelevant whether or not the tenant’s total share is 100%.”
4D: After Clause 2, insert the following new Clause—
“Restriction on contracting out of section (Costs arising from relevant notices or risk based guidance under the Fire Safety Order)
A covenant or agreement, whether contained in a long lease to which section (Costs arising from relevant notices or risk based guidance under the Fire Safety Order) applies or in an agreement collateral to such a long lease, is void in so far as it purports—
(a) to exclude or limit the obligations of the lessor or the immunities of the lessee under that section, or
(b) to authorise any forfeiture or impose on the lessee any penalty, disability or obligation in the event of the lessee enforcing or relying upon those obligations or immunities.”
4E: Clause 3, page 2, line 28, at end insert—
“( ) Sections (Costs arising from relevant notices or risk based guidance under the Fire Safety Order) and (Restriction on contracting out of section (Costs arising from relevant notices or risk based guidance under the Fire Safety Order)) shall each come into force on the same day as section 1 comes fully or partially into force in respect of any premises in England.”
The Lord Bishop of St Albans: My Lords, the rules are such that I am not allowed to make a speech. However, so that the other place can consider the very full reasons that the Minister gave, it is right and our duty to test the mind of the House. I beg to move.
Motion agreed.
The Church of England in Parliament 
You must be logged in to post a comment.