A2 Dominion has told shared ownership leaseholders at City Wharf Hoxton that they are going to have to pay up to remove cladding.
The housing association has said it “does not want to pass on costs to leaseholders”, but if it developers, warranty providers or the £1 billion government cladding fund don’t pay up, then it will enforce the leases and make shared ownership owners pay instead.
According to Inside Housing it has written to leaseholders:
“It has been decided that A2Dominion will not reduce the charges should any costs in relation to these works be recovered from those with shared ownership leases.”
Scott Jenkins, a shared owner at City Wharf, is quoted: “The fact that they have denied our request to pay for the cladding proportionally is an absolute killer, it moves from something you don’t lose sleep over to something that will cripple you financially.
“Coronavirus makes it extremely worrying, there are definitely people in flats that will drop income as a result of this.
“There is a big downturn coming, and we are really worried about the impact of that.”
In a response to Inside Housing, A2 Dominion said that it would continue to do “everything it could to avoid charging leaseholders and shared owners” but that the charges would be in line with the terms of their lease.
Last month LKP organised an All Party Parliamentary Group on leasehold reform where the flaws of the current shared ownership model were aired.
The tenure – mixing long leasehold with a short-term tenancy – was not ownership in any meaningful sense, and as A2 Dominion has demonstrated nothing is shared when it comes to the bills.
It is extraordinary that these disadvantageous contracts are marketed as a first step to home ownership.
A2Dominion’s response in full
Andrew Evans, Executive Director (Operations), A2Dominion, said: “We will continue to do everything we can to avoid charging leaseholders and shared owners for remedial work and will only do so as a last resort, in line with the terms of their lease. The lease also states that, even in the event of a shared ownership agreement, residents will be responsible for the whole costs of any remedial works where these cannot be recovered elsewhere. Due to factors such as the additional benefits of shared ownership, including a subsidised rent agreement, we reserve the right to uphold this.
“While we appreciate some individuals will be disappointed with the decisions we have to make regarding their own properties, as a housing association with a social purpose we have to ensure that we are doing all we can to provide services for everyone in our 38,000 properties – which include care services for vulnerable people.
“To do this, we must adopt an approach that is fair and equitable to all our residents, while ensuring that we are able to continue to deliver services and provide new homes – especially given the external pressures that are heightened by the coronavirus crisis. We appreciate that these pressures are also keenly felt by our residents, which is why will exhaust all other options before we consider passing on the costs of any works.
“We are taking a number of proactive steps to recover these costs. For example, following the recent budget announcement of extra funding to cover other cladding types as well as aluminium composite, we hope to be able to apply for assistance through the Building Safety Fund for the cladding elements on City Wharf. “Additionally, should investigations reveal latent defects in the building work we will seek to recoup costs from the developer or through insurers.”
Inside Housing, news, analysis, and comment about the social housing sector in the UK.