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Leaseholders launch legal battle against government over ‘unlawful’ exclusion from £1bn Building Safety Fund
Manchester leaseholders have launched a legal challenge against the government after they were blocked from applying for its £1bn Building Safety Fund because they had already committed money to remediate dangerous cladding, Inside Housing can reveal.
In a pre-action protocol letter sent to housing secretary Robert Jenrick, seen by Inside Housing, 98 leaseholders living in the Skyline Central 1 building called the government’s decision to block them from the fund “unlawful” and demanded a judicial review to challenge it.
Earlier this month the government launched its £1bn Building Safety Fund, which would go towards removing dangerous non-aluminium composite material (ACM) cladding from buildings taller than 18m.
However, the prospectus for the fund said buildings on which work has started or for which remediation funds have been committed would be barred.
Skyline Central 1 leaseholders had already accepted loans of up to £27,000 from their freeholder to pay for the work after being given an ultimatum, which could have resulted in them losing their homes if they did not accept. Remediation work on the building began last year.
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The pre-action letter claims that the “arbitrary decision” to exclude Skyline Central 1 from the fund is unfair and a “clear abuse of power”.
It says that there are a “multitude of reasons” that a court would be in favour of the claimants, including the fact that it financially assists recalcitrant freeholders that have not committed to the work and penalises leaseholders whose freeholders have acted per the government advice.
It also criticises the housing secretary for not yet providing any “clear or intelligible reasons” for blocking support and says the decision is “completely inconsistent” with the government’s post-Grenfell policy that the costs of remediation work should not be borne by leaseholders.
Since the Grenfell Tower fire, ministers and government officials have repeatedly said that building owners should ensure cladding is removed as quickly as possible and that leaseholders should be protected from the costs.
Skyline Central 1’s freeholder, Adriatic Land, offered each individual leaseholder a loan of between £17,000 and £27,000 so that work could start.
The money is to be paid back through an agreed payment plan over five years.
A spokesperson for the building told Inside Housing that the decision to exclude the block from the fund for being “too proactive” was “grossly unfair”. They added that they face “no other option other than to launch a judicial review case”.
The letter, which will be sent officially to the Ministry of Housing, Communities and Local Government tomorrow, says that the exclusion of Skyline Central 1 from the fund penalises leaseholders for making substantial financial commitments before the fund was launched.
The letter says: “The claimants were left with the choice of taking out large loans to ensure the safety of their homes or living in unsafe housing or facing forfeiture.
“The fact that residents were forced to make that choice puts them in a substantially worse position than many other leaseholders of different buildings.”
The Building Safety Fund is now open to applicants from private building owners and social landlords on a first-come-first-served basis to cover the costs of remediation work that would be borne by leaseholders. However, it is estimated that the £1bn will cover only a third of the 1,700 non-ACM buildings estimated to need remediation.
Many of the residents living in Skyline Central 1 were hoping that the £1bn fund would recompense them for the money they had already spent. The government’s £200m ACM fund for private blocks had promised to reimburse leaseholders that had already paid for work.
Speaking to Inside Housing last month, one leaseholder said the realisation that they were blocked from the fund was heartbreaking and meant that many of the residents risked bankruptcy.
The leaseholders have no other route to accessing funds to pay for the work as the building is outside of its warranty and has no other parties that legal proceedings can be launched against due to its original developer, West Properties, being in administration at the time of purchase.
The Manchester Cladiators cladding campaign group has funded the barrister’s advice being given to Skyline Central 1 leaseholders.
The Ministry of Housing, Communities and Local Government has been contacted for comment.
