Communities Secretary Sajid Javid optimistically believed that freehold owners would pay up – in law, the building and land is their’s – but that was never very likely.
In leasehold, leaseholders do all the paying; freeholders make all the decisions – even though their nominal ownership can amount to as little as three per cent of the collective value of the leases.
Last Thursday The Guardian reported the Nova House issue, where the freeholder has been Robert Steinhouse through his vehicle Ground Rent Estates 5 Limited.
He is reportedly the director of 91 companies.
Slough council poised to take over freehold of property and pay for safety work as current owner refuses to foot bill A landlord who is refusing to pay an estimated £4m bill to make safe a block of flats built with Grenfell-style cladding is likely to be bailed out by the taxpayer.
LKP wrote to Slough Council about this site as long ago as October last year when Martin Boyd of LKP wrote to Sloughs Chief Executive on 26th of October:
“We understand that Slough Council has purchased the freehold for the block known as Nova Tower which had been owned by a private landlord.
“Can we urgently ask you to advise the APPG on Leasehold and Commonhold Reform with an update on the current position and the authority’s proposals for addressing the cladding problems at Nova Tower.
“We are particularly interested to understand the authorities proposals for passing on both short and long term costs to the leaseholders as well as any dates by which the cladding will be rectified.”
Despite an assurance from the Chief Execs PA on 6th November advising that official would revert to LKP and the APPG we have not heard anything back on over 2 months.
The Guardian quotes Mohammed Nazir, Slough cabinet member for corporate finance and housing:
“We simply do not believe the current freeholder has the capacity to do the work that is needed to safeguard the safety of residents.
“We will not put a price on our residents’ lives and their safety remains our priority.”
The Guardian claims that the building is likely to be handed over for a nominal price.
But if Slough pays for fire marshals and to remove the Grenfell at the 68-flat site – which LKP believes is highly unlikely – it will mean cuts to other spending, officials made clear. Its budget has already been cut by £19m over the past three years.
How can Slough council assume financial costs for Nova House on behalf of private leaseholders to the detriment of those without housing of any sort, for whom it does have legal liability?
The Guardian quotes Nigel Glen, the CEO of the Association of Residential Managing Agents (ARMA), saying:
“The government has suggested that landlords should pay for the works but there is no suggestion that anyone has acted inappropriately or cut corners, rather that building control approved and signed off the various types of cladding at the time and have only now tested those very systems and found them unsuitable.”
In fact, The Times has run a front page report on the huge bills run up by freeholders for fire marshals owing to Grenfell cladding.
Freeholders have legal liability to ensure these buildings are safe, and as they are confident leaseholders will pick up the bill, there is no incentive to control costs.
The Guardian says Robert Steinhouse’s company, Ground Rent Estates 5 Ltd, estimates the cost of re-cladding at £1m, with a further £500,000 for fixing sub-standard fire compartmentalisation inside the building which means that fire would spread faster than it should.
Sources at the council suggested the total could be as high as £4m.
Ground Rent Estates has made an insurance claim on behalf of the leaseholders to cover the cost but said in a statement that if that fails “[leaseholders] will be liable for the costs”.