The massive 980-flat New Capital Quay, built by Galliard Homes in Greenwich, east London, is the latest – and largest – site to face multi-million bills to remove Grenfell-style cladding.
Galliard Homes, which finished building the flats in 2014, still owns the freehold and manages the site.
But it is declining responsibility to remove the cladding or pay for the 24/7 fire wardens on the site, which are costing £1.25 million a year.
Instead, it is urging leaseholders to take the issue up with the warranty provider the NHBC (National House Building Council).
LKP has urged Galliard Homes to exclude leaseholders – who are its former customers – from liability for these astronomic bills, which are in no way their fault.
Flats at New Capital Quay are unsellable, and the on-site estate agent, Life Residential, also owned by Galliard, is warning off potential buyers because of the cladding issue.
In short, the properties are utterly blighted while the question remains unanswered over who pays the cladding bills, which are variously referenced among the leaseholders at £19 million to £40 million.
Meanwhile, lease owners need to get on with their lives and many may be in desperate circumstances owing to the three traditional three “Ds” that drive property transactions: Death, Divorce and Debt
The figures of £19 million to £40 million were put to Galliard Homes, which has declined to comment on them.
New Capital Quay is unusual as Galliard Homes, which actually built the site, is still the freehold owner through its subsidiary Roamquest Limited; it manages the site through its subsidiary PMM Limited.
Even though it put up the cladding – understood to be Alucobond SE – it has off-loaded its responsibilities to its former customers onto the NHBC.
LKP, acting as secretariat to the All Party Parliamentary Group on leasehold, raised these issues with Stephen Conway, the executive chairman of Galliard Homes, who has declined to respond.
However, Madeleine Flower, head of marketing at Galliard Homes, did reply to Sebastian O’Kelly, trustee of LKP:
“At the time of construction the cladding material was certified for use and indeed signed off as compliant under the Building Regulations by the NHBC.
“In addition, all of the apartments are insured regarding any structural issues for a period of 10 years from Completion – so all still well within that Warranty period.
“The Buildmark Warranty is provided by the NHBC, it is direct to the individual apartment owners – neither the managing agent nor the freeholder is a beneficiary of that insurance.
“The delay in moving to resolution of what needs to be done is being hampered by the NHBC – as they are saying the leaseholders need to lodge the claims, but very few leaseholders have actually lodged a claim on their insurance as yet.”
Ms Flower also claimed that “there are quite a lot incorrect statements in your note”.
LKP had said that we were informed that many buyers had bought at New Capital Quay with taxpayers’ assistance in the form of the Help To Buy scheme, and that they used solicitors recommended to them by Galliard.
Ms Flower replied: “Regarding the ‘Help to Buy’ remark, that is false, the scheme did not exist when the apartments at New Capital Quay were developed.”
This is a curious assertion as Galliard Homes’ own website boasts of the then housing minister visiting New Capital Quay to “review how the Government’s Help To Buy initiative is assisting Londoners in buying their own homes in the capital”.
On Tuesday the 29th April Kris Hopkins, Minister for Housing, visited Galliard Homes’ flagship £300 million new homes development at New Capital Quay in Greenwich, SE10. His visit was part of a review of how the Government’s Help to Buy initiative is assisting Londoners in buying their own homes in the capital.
Ms Flower concluded: “Most of the actual detail is now sub judice [this is incorrect] as PMM Limited are in the process of issuing proceedings on behalf of an individual leaseholder against the NHBC.
“It would however be helpful if the leaseholders would lodge their individual claims with the NHBC as that would undoubtedly speed up resolution.”
The NHBC acknowledges that it has received a liability claim from the property manager of New Capital Quay, as well as a number of other sites with dangerous cladding.
Impartial observers may find it extraordinary that Galliard Homes, which used this cladding to build its site, is now washing its hands of all responsibility.
Instead of sorting it out, it is encouraging a strategic manoeuvre whereby its former customers now face protracted litigation with the NHBC warranty provider.
Even if successful and swift – the latter is unlikely – leaseholder would very likely have to pay £2,000 each in excess.
That is presumably a price Mr Conway and the board of Galliard Homes are prepared for other people to pay.
The conduct of Galliard Homes marks a contrast with Legal and General, which is paying the £10 million billion at the Blenheim Centre / Reflexion – which it did not actually build.
Meanwhile, Steve Reed, Labour MP for Croydon North – home to the Citiscape site which also has Grenfell cladding – is contacting around 30-40 fellow MPs to form a coalition with the intention of putting pressure on the government to “take responsibility” for removing the cladding.
The issue of who pays the £2 million bill Citiscape is to be decided in tribunal on Tuesday next week. The freeholder is the Tchenguiz Family Trust, based in the British Virgin Islands.