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Residents given ultimatum by developer over £2.4m cladding bill
The owner and developer of a major development in east London covered with dangerous aluminium composite material (ACM) cladding has hit residents with an ultimatum over the costs of carrying out remediation work.
Residents living at New Providence Wharf in Poplar now have just over two weeks to decide whether to accept an offer from Ballymore over the funding of remedial works across the development, or risk having to foot the full £2.4m bill themselves.
Completed by Ballymore in 2005, New Providence Wharf has a total of 559 apartments spread across five buildings.
In the months after the Grenfell Tower fire, ACM cladding was discovered on the building, but Ballymore has refused to cover the re-cladding costs.
In an offer letter sent to residents and seen by Inside Housing, Ballymore said that it had “no legal basis” to pay, but would as a “goodwill gesture” offer 20% of the overall re-cladding costs, with the contribution capped at £500,000.
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The offer also includes an agreement by the developer to provide leaseholders with a no-interest bridging loan spread across three years, which will be paid on a six-monthly basis.
Despite the contribution from Ballymore, residents would still be hit with repayment bills of between £2,000 and £13,000 for each flat to cover the work.
The offer comes despite housing secretary James Brokenshire telling private building owners that they must pay for this work and not pass the costs on to leaseholders.
Residents now have until 28 February to vote on whether to accept the offer from Ballymore. If they vote in favour of the offer, the loan repayments would start when the work is completed.
If a vote against the deal takes place, Ballymore will proceed with the work and fund it through a “special service demand”, which will be required from residents in the second quarter of the year.
If the funds are not available to cover the work at that point, Ballymore will offer a loan with interest that would be repayable on demand.
Ballymore has also threatened to remove the 20% contribution and add a 5% interest charge on the loan if any resident “directly or indirectly” threatens the company with legal action.
Jim Fitzpatrick, Labour MP for Poplar and Limehouse, has now sent a letter to housing and homelessness minister Heather Wheeler requesting “urgent intervention” from the Ministry of Housing, Communities and Local Government (MHCLG) on the issue as time was running out for residents.
In the letter to residents, Ballymore said it believed that in the vast majority of cases with ACM cladding, freeholders are not paying for remediation work.
Last month Inside Housing reported on the Northpoint House block in Bromley, where residents faced bills of £60,000 per flat for re-cladding and other fire safety works and the building’s owner Citistead had refused to pay.
In a letter to Northpoint residents, William Procter, director of Citistead, said it could not be forced to pay for remediation work and the government’s demands to get building owners to pay for the work was a hollow threat.
Responding to the story, Mr Brokenshire said his message was clear and that private owners must pay for re-cladding work or expect to pay more later.
Ballymore declined to comment. Inside Housing has contacted the MHCLG for comment.
Update: at 18.00 on 27.2.19 This story was updated to correct the figure for the number of apartments on the New Providence Wharf development.
