Other freeholders and housebuilders should do the same, says Sajid Javid
Last night it was announced by Barratt that it would pick up the £2 million fire marshal and Grenfell fire cladding bill at Citiscape in Croydon.
Barratt told LKP this morning:
“Following the recent ruling that the costs for necessary recladding at Citiscape will fall on the individual apartment owners, many of whom were originally Barratt customers when it was built in 2002, we have decided that we will pay for the work.”
“Citiscape was built in line with all building regulations in place at the time of construction. While we don’t own the building or have any liability for the cladding, we are committed to putting our customers first. The important thing now is ensuring that owners and residents have peace of mind.”
It is believed that Citiscape is the only Barratt site with Grenfell-style cladding.
In March the 95 leaseholders lost a FTT property tribunal case to establish liability.
The case had been brought by FirstPort, which is embedded in the tripartite lease at the site as the manager.
The 95-flat Citiscape site, of two blocks with a car park, was built by Barratt 2001 and the freeholder is Proxima GR Properties, one of the freehold-owning companies of Vincent Tchenguiz that ultimately belongs to the so-called Tchenguiz Family Trust based in the British Virgin Islands.
The following from Anuj Vats and Sikrant, who are leaseholders at the site:
The Citiscape Leaseholders are ecstatic and celebrating with great sign of relief after ten long stressful months of financial uncertainty. The Citiscape RA Committee was informed yesterday that Barratt Development PLC (Barratt) would step-in to pay for both the Re-Cladding and Fire Marshall’s costs for the development.
This announcement comes from Barratt after months of closely following this case in the Media, FTT and discussions with the Service Management Company (FirstPort).
Barratt is purely doing this to take care of their customers who have bought the properties from them on the back of FTT Hearing and in line with their commitments to put customers first.
Barratt stated they accept no liability for this repairs of the development. However, as no one else was stepping forward to do anything for the leaseholders who had bought the building from the developer they have decided to take care of its customers.
The Citiscape leaseholders are thankful from the bottom of their hearts for this kind gesture by Barratt. Santa comes early to Citiscape this year were the expressions used to welcome this great news from Barratt.
Other Developers and Builders should take a lead from Barratt and follow them saving thousands of lives and homes.
Local MP Steve Reed, who has championed the leaseholders, said:
“This is fantastic news for residents in Citiscape who were facing unaffordable debt to make their homes safe. But this applies only to Citiscape.
“The Government’s intransigent refusal to set out a plan to remove flammable cladding wherever it’s found has left tens of thousands of residents living in fear. Instead of relying on the goodwill of builders the Government must accept responsibility for the failure of their safety regulations and take all flammable cladding down before there’s a repeat of Grenfell Tower.”
The decision is satisfies the hopes of Communities Secretary Sajid Javid: he has been calling on housebuilders “to do the right thing” and pay for cladding removal.
The DHCLG issued this press release this morning:
20 April 2018
NEWS RELEASE – FOR IMMEDIATE PUBLICATION
Barratt Developments agree to pay fire safety costs
Barratt Developments to pay for fire safety related costs in a building they developed, relieving the building’s leaseholders of this burden.
Housing Secretary, Sajid Javid, last night (Thursday 19 April) welcomed the decision from house builders Barratt Developments to pay for fire safety related costs in a building they developed, relieving the building’s leaseholders of this burden and ensuring that the building will be made safe.
Leaseholders living in the Citiscape development in Croydon were told at a residents’ association meeting last night of Barratt Developments’ decision. The company has said they will cover future and backdated costs relating to employing a fire warden and the removal and replacement of unsafe cladding from this building.
Following the Grenfell Tower tragedy government acted swiftly to establish a comprehensive Building Safety Programme. This included identifying buildings with unsafe cladding and providing guidance to building owners.
From the outset Sajid Javid has been clear that building owners in the private sector should follow the lead of the social housing sector and not pass on the costs of essential cladding replacement to leaseholders.
Government has been in discussions with private sector landlords, freeholders and house builders directly, including Barratt Developments, regarding this matter. While Barratt is not the current freeholder or managing agent, as the original developer of the building they have agreed to cover these costs.
Sajid Javid, said:
“I applaud Barratt Developments’ decision to cover the costs of fire safety works. They have listened to the concerns of Citiscape residents, engaged with government and have done the right thing.
“Other building owners and house builders in the private sector should follow the example set by Barratt Developments to protect leaseholders from costs and begin essential fire safety works. I want to see all leaseholders in this position get the peace of mind they deserve and I am keeping this under review.”
FirstPort’s letter to leaseholders yesterday is here FirstPortonCitiscape1
The open question now is what about the other sites, such as nearly 1,000 flat New Capital Quay, in Greenwich, where the bill is £20-£40 million?
Neither Galliard Homes, which only completed the site four years ago, is the freeholder and monopoly estate agent on the site, nor the NHBC warranty provider want to pay up.
Both are using the plight of the leaseholders, whose lives are stalled as their properties are being valued at 10 per cent of what they paid for them.
Yesterday Battersea MP Marsha De Cordova met leaseholders at the blighted Sesame site in her constituency:
Leaseholders face £19m to £40m Grenfell cladding bills at Galliard Homes’ New Capital Quay
Could paying off Help To Buy loans on blighted homes force government to act over Grenfell cladding … and doubling ground rents?
A great result which satisfies all involved.
Barratt have enhanced their reputation.Purchasers of their homes will be able to see that Barratt does stand by them if something goes catastrophically wrong, so will be more confident in purchasing their product.
No doubt they will be able to get the job done at a much cheaper price than the suggested £2m( and of course any costs are deductible!)
If they manage the project themselves they can save approximately £200,000(that may have been charged by the current managing agent?) The residents will be relieved that the financial plight that has descended on them has been lifted.
Firstport will be relieved as if they had been held liable (in their role as landlord) it is unlikely that they had sufficient funds available to make repairs.
The NHBC must be breathing a sigh of relief. A judgement holding them responsible for repairs would have threatened their very survival (this is alluded to in a post accounts statement) And of course were it to be that the NHBC (who afford protection to house purchasers) collapsed into administration it would prove very embarrassing to house builders who put so much store in trumpeting the virtues of the NHBC
Legal & General have done it. Now Barratt have done it.
They have provided the plate. Galliard, it is now time for you to step up to it!
At tonight’s All Party parliamentary Group meeting attended by the CEO of Firstport, Barratt rightly received widespread praise for acting with such honour and standing by their customers. This is not the first time that Barratt has acted honourably. some time ago concerned about the poor quality of services and outrageously expensive service charges Barratts ended Firstport’s (Peverel) managing contracts at all the developments that were not Tchenguiz Group freeholds.. The CEO of Firstport gave a very good speech concerning how important the safety of residents was at Citiscape. to him and Firstport in light of the tragic events at Grenfell Tower and he made a very powerful point in advocating better regulation to stop less scrupulous smaller managing agents exploiting leaseholders.
Owing to shortness of time he was unable to say how Firstport came to be appointed managing agents at Citiscape?
Owing to shortness of time, he was unable to say whether more robust regulation would have prevented the Peverel/Firstport price fixing scandal, for which a minimum of 65 retirement developments were systemically targeted to be price fixed for work that in many cases was not needed?.
Owing to a shortness of time he was unable to say what lessons his company had learnt in regard to fire safety having received a record fine for several breaches of Health & Safety that resulted in a fatality when fire broke out at Gibson Court, Esher?
Owing to a shortage of time he was unable to explain as to how it came about that a managing agent ended up holding leaseholds on retirement development house managers flats?.
Still, never mind. There is always the next meeting Nigel!