Hackitt and Knight back dumping unregulated sector-insider ‘building safety managers’ onto leaseholders at £60,000 a year, MPs told

Dame Judith Hackitt changes gear favouring insider ‘building safety managers’, after telling The Guardian she was ‘shocked’ leaseholders ‘were being exploited … and seem to have no right to challenge what is being prescribed’

Rendall and Rittner raises £2,790 cladding bill to government grant of £44,654 – with a commission from taxpayers of £12,120, reports the Sunday Telegraph

Sir Ken Knight tells MPs leaseholders commission an EWS1 form when they come to sell their flat: it is, of course, organised for the entire building by the landlord

Law Society says leaseholder controlled blocks – RTM or residents’ management company – offer some protection from escalating costs, but they might rise or the flat becomes unsellable even with an EWS1

By Harry Scoffin

Post-Grenfell “building safety managers” to be imposed on England’s blocks of flats through the Building Safety Bill will cost leaseholders approximately £60,000 every year in extra service charges per block.

But they shouldn’t be subject to a mandatory code of conduct or minimum professional standards, according to the government’s two most senior fire safety advisors last week.

The compulsory building safety managers will be employed alongside the pre-existing managing agent and, in the case of larger and mixed-use developments, an on-site estate or building manager, will be needed as well. In each block of seven or more storeys the average cost for a building safety manager will be £60,000 a year, according to government guidance issued last month.

Dame Judith Hackitt, the chemical engineer and former chair of the Health and Safety Executive, was recruited by then premier Theresa May to review building safety regulations in the aftermath of the Grenfell Tower fire. Her recommendations formed the basis of the controversial Building Safety Bill, that will make building safety managers a requirement for most leasehold blocks.

She told the newly rechristened Levelling Up, Housing and Communities Select Committee on November 22 that the sector should be left alone to make a success of the new role.

Hackitt, the chair of the Independent Review of Building Safety and Fire Regulations, told the bipartisan committee of MPs that “it is the right approach [to] trust that sector of the industry to do the right thing.”

But she was not so accommodative in her March 2018 report for government, Building a Safer Future. There, Hackitt took the opposite line, railing against a culture of “ignorance” and “indifference” that she suggested had led to a “race to the bottom” mentality in the construction and maintenance of England’s residential high-rises. She concluded that the development and property management sectors were consistently putting cost ahead of safety concerns and resident voice.  

Grenfell review condemns ‘race to the bottom’ in building safety practices

A government review into building regulations in the wake of the Grenfell Tower fire has concluded that indifference and ignorance led to a “race to the bottom” in building safety practices, with cost prioritised over safety.

At the select committee hearing on November 22, Hackitt’s view on building safety managers was endorsed by Sir Ken Knight, the former London Fire Commissioner chairing the Independent Expert Advisory Panel on building safety, who claimed not to be aware of “the industry setting out to avoid their key people being competent”.

“Those responsible employers and responsible building owners will want to ensure they have competent people doing those jobs,” he added.

The collective pushback of the top government advisors against suggestions of bringing building safety managers under statutory regulation comes amid mounting media reports of managing agents, contractors and block owners profiteering from the buillding safety crisis. This has resulted in leaseholders and the taxpayer being billed for unnecessary fire safety work or overcharging through allegedly inflated invoices.

In August, the Sunday Telegraph reported that managing agent Rendall & Rittner had won a government grant of £44,654 to remove two panels of ACM cladding from the roof of an east London block, an amount 16 times higher than the first quote which came in at £2,790. The firm also made a commission on the taxpayer of some £12,120. A Rendall & Rittner spokesperson rejected suggestions of inappropriate conduct, telling the paper that neither the building owner nor officials objected to the costings.

‘Everyone is just looking to make a profit’: the people taking advantage of the cladding crisis

It is normal for managing agents to charge extra for work outside their typical remit, Mr Boyd said. However, he added: “It seems the Government is approving very high levels of fees for pre-contract work.” A lack of official data was an additional problem.

Hackitt’s trust in the leasehold sector and rejection of statutory control of building safety managers contradicted recent remarks she made to The Guardian. Speaking to social affairs correspondent Robert Booth in September, she conceded the sector has been cashing in on the cladding and build safety crisis, adding that “what shocks me is the size of some of the bills and whether the problem is being added to by them [flat leaseholders] being exploited”.

“Morally they [the leaseholders] shouldn’t have to pay … They seem to have no right to challenge what is being prescribed.”

She also professed to want to help defend the service charge payers from “getting fleeced by their landlords”.

Post-Grenfell fire safety: leaseholders risk being fleeced, warns top adviser

Leaseholders risk being “fleeced” by profiteering landlords and builders in the post-Grenfell fire safety crisis, a senior government adviser has warned in comments likely to increase pressure on ministers to finally resolve the problem. More than four years after the disaster that claimed 72 lives, tens of thousands of leaseholders are being landed with crippling remediation bills exceeding £200,000 per household in the worst cases.

Hackitt and Knight’s support for what will in effect constitute a shadow property management industry jars with the reality that the scandal-hit managing agent sector is headed for strict statutory regulation shortly.  

Leaseholders may face unnecessary charges as firms stand to profit from building safety crisis

The young architect had a hunch. Like his neighbours, he faced a £20,000 bill to remove “flammable” insulation from the east London skyscraper where they live. The 20-storey Panoramic Tower had applied to a £4.5 billion government fund for help to fix its walls. But what, the architect thought, if the walls were safe all along?

Media coverage of alleged wrongdoing, including financial mismanagement and leaseholder overcharging by high-profile block manager Richard Davidoff and his ABC Estates has revived calls for government to implement the recommendations of Lord Best’s Regulation of Property Agents (RoPA) working group report, including the establishment of a licensing regime and a powerful statutory watchdog to enforce compliance with tough new rules and expel rogue operators.

Richard Davidoff, of ABC Estates, ‘breached his fiduciary duties’ after disastrous performance as a court-appointed manager, rules property tribunal

Sir Peter Bottomley, Father of the House and co-chair of the All-Party Parliamentary Group on leasehold and commonhold reform, last week moved a motion in parliament urging RoPA be enacted to provide “leaseholders confidence that they’re not being ripped off and that complaints are considered and resolved without delay”.

Sir Peter Bottomley calls on ministers to listen to ‘whistleblower’ ex-employees of Richard Davidoff (of ABC Estates)

Appearing unsatisfied with the answers Hackitt gave to colleague Rachel Hopkins, long-serving committee chair Clive Betts said “perhaps I am not being very quick with the uptake on this”, before asking her how leaseholders and occupiers of affected apartment buildings could be “assured that the person that they get to do that job … will have the necessary competence and the appropriate training and that they will meet appropriate standards” without a mandatory code or statutory regulator to oversee this new class of property manager.

In the same way most flat leaseholders do not get to choose managing agent but have to pay for their services, and so cannot easily sack a poorly performing provider, building safety managers will be the reserve domain of the “accountable person”, a new legal term for investors in freeholds and the head leases to people’s homes.

Post-Grenfell fire safety regime brings closer scrutiny of building owners … even shadey freeholders anonymously lurking in sunny tax havens – Leasehold Knowledge Partnership

The Leasehold Knowledge Partnership has posed the question of whether the leasehold system could survive the sort of scrutiny it would receive after thousands of blocks of flats were deemed to be covered in combustible cladding. To date, this is costing taxpayers £1.6 billion to put right.

This means the nominated individual will not be appointed by the paying flat owners save for in the minority of cases where there is a residents’ management, or RTM, company in place.

Hackitt assured Betts, whose committee in March 2019 issued a damning report into the property sector that found “existing leases, legislation and public policy” were severely disadvantageous to leaseholders and are largely responsible for their being “treated by developers, freeholders and managing agents, not as homeowners or customers, but as a source of steady profit”, that the building safety regulator, which will operate under the Health and Safety Executive (HSE), will have to be content that “the person who is doing that job knows what they are talking about”.

Communities Select Committee MPs issue devastating report into the toxic leasehold system – Leasehold Knowledge Partnership

The Leasehold Knowledge Partnership warmly endorses the Communities Select Committee report published today. We have campaigned since January 2012 to see a parliamentary report turn such a clear-eye to this murky and exploitative corner of the housing market. The report is a huge vindication of our efforts.

Judgments on the performance of these building safety managers will therefore not be left to the discretion of leaseholders who pay for them and are better placed to judge those overseeing their blocks due to day-to-day interactions, but rather to the untested and possibly remote regulator which, as Knight told the committee, will be overwhelmed with a “huge amount of work … on day one” as some 12,000 to 12,500 buildings come under its remit.

Building Safety Manager: factsheet

The Building Safety Bill introduces stronger requirements on Accountable Persons to ensure building safety risks in occupied buildings with at least two residential units which are at least 18 metres in height or have at least 7 storeys are properly managed and overseen by competent people with the appropriate skills, knowledge, experience and behaviours.

Knight also explained to the MPs that he would “expect” conveyancing solicitors to flag to would-be leaseholders details of planned remedial works and of items that have come to light recently that require replacement in the near term, such as fire doors, because of historic neglect by building owners and their agents.

“Indeed, in conveyancing terms, I would expect my conveyancing solicitor to assure me that there was a fire risk assessment in place, and the outstanding issues, including the maintenance of fire doors, lifts and smoke alarms, were just part of the knowledge of the leaseholder when buying and maintaining that flat,” he said.

This understanding contrasts with a guidance note published in July by the Law Society, the body that represents 200,000 solicitors across England and Wales, which cautioned buyers of leasehold flats that:

“Solicitors are not able to advise on the physical structure of buildings or related matters generally. They also cannot advise in relation to fire safety issues.”

While solicitors can query whether major works are planned and ask for recent service charge accounts or the latest fire risk assessment from landlord and managing agent, flat purchasers have no legal right to such information.

Casting doubt on Knight’s assertion that, with professional advice, consumers can buy into apartment schemes fully aware of what they are signing up to, the Law Society warned that even with a reassuring EWS1 fire safety certificate on the flat, “you could still be faced with very high costs, now or later, and you may still find it difficult to sell your property in the future, particularly to anyone who needs a mortgage”.

The only comfort to prospective flat buyers in England arises where the property in question comes with a freehold share or stake in a residents’ management company so those paying the bills at least control the agent, contractors and set the agenda for the estate, suggested the Law Society.

Building safety for flat buyers

If you’re buying a flat or thinking about buying one in the future, there are several matters to consider. The fire at Grenfell Tower in Kensington in 2017 and the Hackitt Building a Safer Future report emphasised the need for anyone thinking of buying a flat to investigate the fire safety aspects of the flat and the building it’s part of.

But LKP ponders whether this will count for much when a giant regulator that could pursue criminal charges against disobedient lay directors finds itself in disagreement with a development and issues a formal improvement notice forcing costly works to be carried out.

At the select committee hearing, Knight said that “in those early days of the EWS1”, leaseholders in the same building would need to endure multiple EWS1s and pay for them “because they all had different lenders and required separate EWS1s”, a factually incorrect claim that the ex-firefighter also made in September during his oral submission to the Public Bill Committee, which was scrutinising the Building Safety Bill.

EWS1 reports are commissioned by the landlord for the entire block, not individually by leaseholders.

Knight – who sat on the committee that approved the Consolidated Advice Note which, in replacing the much criticised Advice Note 14, brought a whole range of buildings into scope, with those under 18 metres required to be investigated and remediated, thereby instilling even more fear in lenders, surveyors and others involved in leasehold property, helping to render an estimated 1.3 million flats unmortageable – sought to distance himself from the regulatory fallout from the Grenfell Tower fire, which critics say he presided over, and the EWS1 fire safety certificate regime.

“I was part of the panel that sat and talked, under Judith’s chairmanship, about proportionality …. [and] that consolidated advice … was never binary advice. It was actually risk-based advice by a competent person. Instead, disappointingly, we saw it being applied in a very binary ‘risk or no risk’ way, which is just not right.”

He went on to claim that “we have never been part of the EWS1 advice, which was for very different purposes. It was for property valuation, not for life protection”.

LKP chair Martin Boyd says:

“Not only were the government actively involved in meeting RICS during the development of the EWS1 system, but it was the same subgroup of officials who observed the RICS meetings that also acted as secretariat for Ken Knight’s group that produced all the advice notes. It seems utterly implausible that the same group of officials who looked at both issues somehow didn’t pass information on from one group to another.”

Echoing Knight, Hackitt said that “what we tried to say and tried to reinforce in that advice that we put to Government in July was, first of all, that the risk of a fire happening is very low, even now and even with all that we know about all of the other buildings.”

She added that “the risk of it happening is low and, therefore, we need to start from that position and then look at how we ensure a level of safety that people can feel reassured in and avoid excessive costs being placed on them, as well as excessive concern about a building that they believe to be less safe than it really is.”

EWS crisis caused by ‘overreaction’ to government advice, say top advisors

Inside Housing, news, analysis, and comment about the social housing sector in the UK.

The comments raise questions as to why this was not the original policy approach pursued by Hackitt, Knight and others and is only being taken up after Hackitt has “some regret that leaseholders find themselves in the middle of all this. The extent to which they have been emotionally put on a rollercoaster over this is something that we should all regret. It is not just about cost; it is also about, “Is this building safe or not and will someone tell me?” The reality is that there is no absolute guarantee of safety in any building.”

As previously reported, Hackitt has consistently refused to engage in the issues surrounding the way in which England’s apartment buildings are controlled and managed, much to LKP’s frustration as they cut across fire and building safety.

In the one meeting that LKP attended with Hackitt, in November 2017, the oil refinery professional dismissed overtures by chair Martin Boyd that tenure was critical to understanding and resolving the post-Grenfell crisis in a proportionate and cost-effective manner.

Dame Judith Hackitt’s uninterest in leasehold tenure is like ‘wanting to build cars with no idea how they are driven’, says LKP – Leasehold Knowledge Partnership

No engagement with leaseholders throughout the Hackitt review, Communities Select Committee is told By Harry Scoffin Dame Judith Hackitt, the government’s de facto building safety tsar, was criticised by LKP on Monday at the Communities Select Committee for not bothering to understand the governance of blocks of flats.

She replied that she was not interested in the complexities of different tenure types and was only interested in building safety, which has perhaps indirectly led to flat leaseholders, not building owners, facing remediation bills as high as £200,000 per household.

Reviewer of building regulations admits post-Grenfell safety regime open to abuse by rogue freeholders – Leasehold Knowledge Partnership

By Harry Scoffin The former health and safety commissioner tasked to investigate building standards following the Grenfell Tower fire has criticised government for allowing it “to take so long” to agree her blueprint for maintaining the integrity of high-rise residential blocks. In comments to the Communities Select Committee on Monday, Dame Judith Hackitt also raised …

LKP went on to be snubbed at a subsequent Hackitt roundtable session in 2018.

Mr Boyd and the former firefighter Jim Fitzpatrick, then MP for Poplar and Limehouse and Labour co-chair of the leasehold APPG, were informed at the last minute by organisers that they had “over-allocated” on tickets. Their invitations were then withdrawn.