This week saw The Times, the Guardian and the BBC reporting on the ‘New Capital Quay’ site in Greenwich.This site is the largest privately owned development in the UK with ACM type cladding. Costs for replacing the cladding are being suggested at £20 million or even £40 million.
In an interview for ‘You and Yours’ on BBC Radio 4, Galliard Chief Executive, Donagh O’Sullivan, placed responsibility for the costs firmly with a warranty provided by the National House Building Corporation. He also explained that at the ‘New Capital Quay’ site the NHBC also acted as the building inspector during the construction phase.
NHBC counter the Galliard position by claiming that they need more information before they can fully review the claim. O’Sullivan dismissed this argument in the BBC interview, making clear that in his view NHBC had been provided with all the relevant information. O’Sullivan also made clear that Galliard will no longer be using NHBC to carry out inspection work during the construction phase of future Galliard building projects.
While these corporate giants place blame on each other, the leaseholders told the BBC they feel like they’re being treated like a “hockey puck”.
The Times reported on the story on 14th February:
In the report they state, among many other things:
“Despite being assured that the development in Greenwich, southeast London, was covered by a ten-year building guarantee they have been told that they could be held responsible for replacing cladding of the type that was used on Grenfell Tower.
In the meantime, Galliard has said that the cost of providing round-the-clock fire patrols at the £1.25 million development, New Capital Quay, must be met through residents’ service charges. Many of the residents do not have the money to pay the additional charges but cannot sell or rent their flats until legal responsibility for the cladding has been resolved. As of last March Galliard had retained earnings of just under £30 million.”
The Guardian then ran a story on 15th February titled “Multiple fire safety risks found at flats with Grenfell-style cladding”
“30 fire marshals are patrolling the 11 buildings 24 hours a day at an estimated cost of £25,000 a week. But residents are concerned that wardens are not the solution.
Hyde Housing, which has interests in six of the blocks as well as being head leaseholder in two, said the situation was “very distressing” for residents. “We urge all those bodies involved in resolving this matter to do so speedily,” said Brent O’Halloran, the director of asset management at Hyde”.
On Friday 16th February the BBC ‘You and Yours’ programme was aired, including additional interviews with the leaseholders:
LKP first reported the story on 2nd February:
Nobody knows who will ultimately be required to pay to replace this defective cladding. This type of dispute, on many sites across the country, seems likely to go on for months if not years. What nobody is suggesting is that this is somehow the leaseholders’ fault, but almost everyone expects them to pay. At the moment Galliard will not accept responsibility and neither will NHBC.
On 6th February NHBC answered a number of questions posed by LKP as follows:
[su_box title=”LKP Comment” style=”bubbles” box_color=”#2f22c7″ radius=”13″]
1) Can you confirm how many claims NHBC has received regarding the type of cladding now deemed not compliant with building regulations following the Grenfell Tragedy?
In terms of claims, we have only had a handful. We are taking the most appropriate actions and providing the information and relevant details on how to make a claim and what information we require to progress claims to help building owners/managers. We also have been in dialogue with Government and other responsible and representative bodies actively assisting with their efforts.
While we have a thorough approach to assessing cladding systems on high rise buildings, we took immediate action following new evidence from the most recent Government fire tests, and advised builders that we will not accept any wall construction that does not meet the simple guidance for limited combustibility or that has not been subjected to a fire test.
2) Can you confirm if NHBC has accepted any claims and how many have either been repudiated or gone into dispute?
To date we have only had a handful of claims notified. Most claims notified to us are still at an initial stage awaiting further information to be provided by the claimants. We have not been notified of any disputes on decisions made so far.
3) Can you confirm if the warranty offered by NHBC includes and excess for every flat when works apply to the common areas? If so what the excess is per claim? We are told the excess may be £2,000 for every flat. Is this correct?
This is incorrect. Any claims of this nature would be made under Section 4 or, in the case of Housing Association policies, Part E. There is no excess or minimum claim value applied.
4) Can you confirm that the first line of the job description for NHBC claims consultants is still as per your standard job specification of 2015 and explain why “repudiation” if felt to be a key part of the claims consultants role?
The first line of the job specification stated “Recommend repudiation or rejection of claim in line with authority levels for claims dealt with by Area Team”
Determining validity is a key function of any claims handler in any insurance company.
Surely Mr O’Sullivan of Galliard and NHBC can at least agree that, at the end of their dispute, one or the other will accept liability for the cost of the remedial works and the fire marshalls.
If not, will they agree that, instead of trying to pass the costs to the leaseholders, who are definitely not to blame for the situation, they will take a joint action to pursue the government or the cladding supplier or some other third party who they believe is in fact liable.
Will they work together to recover the monies from these parties so that no charge is made to the leaseholders? The leaseholders are clearly not at fault for, what would now seem to be deemed, a defective building.[/su_box]
It may be of interest to note that following losses on a major construction project (connected with the collapse of Carillion) Galliard have just issued a £150,000,000 rights issue. In a statement they say “They have adequate funding, but the alternative to cover their losses would be to take money out of Linden Homes” That this option could even be on the agenda at all, once again points to the total breakdown of the housing market?
Questions that need to be asked?
Is the NHBC policy with the developer or Galliard?
Does it show on any purchase document that the leaseholder paid any kind of premium to NHBC for insurance?
The cladding that was fitted? Was it the same as originally specified or was a cheaper version fitted?
Did the NHBC verify this before “passing” the building?
If the cladding fitted was the original specification, why were either Galliford or NHBC not aware of other fires involving this type of cladding?
Can anyone from Galliard, Firstport, Proxima or NHBC give an assurance that if they are held liable for the costs of the replacement cladding they have sufficient funds to meet their obligations? In the meantime, I would suggest to each of them that if safety is their priority (as they claim) they should get the work done and argue later?
Suppose heaven forbid another fire occurs, whilst they are arguing the toss? would that not be a case for cooperate manslaughter?
The NHBC has a five stage tickbox exercise to sign off New Build.They use building inspectors with NVQ qualifications who don’t care or understand what they sign off. NHBC and developers are joined at the hip so expect this dispute to have legs.
The welfare of leaseholders is the least of their concerns. It’s about covering their backsides and using the Courts to obfuscate and delay any culpability charges.
Every day seems to bring another housing disaster and what does Javid and the government do.
Nothing but vacuous words. The proverbial can has been kicked out of sight..
This is what Rt Hon Sajid Javid said on 23 Jan 2018:
The right hon. Gentleman will know, because he shares this view, that the No. 1 priority for buildings safety following the Grenfell Tower tragedy is to ensure that anyone living in any tower that might have similar cladding feels completely safe and that those buildings are properly tested. If anything is found before that cladding can be taken down and replaced, which will of course take time, we must ensure that adequate measures such as 24/7 fire wardens are put in place, on the advice of the local fire and rescue service. That is exactly what has been done in every single case. The right hon. Gentleman also asked about private sector tower blocks and the cost of any remedial work that is needed.
I have made it clear in the House and since our last oral questions that, just as social landlords are picking up the tab for those changes, and
whatever the legal case might be in the event of a private relationship, the moral case is clear: the tab should be picked up by the freeholders of those properties.