We are only billing leaseholders for the fire marshals not Grenfell cladding removal, says Slough
Council is understood to have bought the freehold to the stricken site for £1 – officially, a ‘nominal fee’ – off freehold investor Robert Steinhouse
Liverpool debt collectors JB Leitch to take the tribunal action
Leaseholders at Nova House which has Grenfell cladding are the latest to be taken to tribunal to pay up for the associated costs, this time by Slough Council.
The council says the action only relates to paying for the fire marshals, who have been at the site for a year.
In a further twist, it is understood that the council is only the freeholder because it paid £1 for the freehold to ground rent speculator Robert Steinhouse on 7th March this year. The reason for this is as yet unexplained, but the council says it paid a “nominal fee” for Ground Rents Estates 5 Limited.
“However, we have not stated publicly the exact cost. GRE5 [Ground Rents Estates 5 Limited] is now wholly owned by the council.”
In correspondence with LKP – copied to Communities Secretary James Brokenshire, Housing Minister Kit Malthouse and LKP’s patron MPs – Slough seeks to make a distinction between having the leaseholders pay for the fire marshals and making them pay for the removal of the cladding.
“At no point in the letter have we stated anything linking cladding with a tribunal,” says the Slough Council spokesperson for GRE5 Limited [Ground Rents Estates 5 Limited], the freehold-owning vehicle for Nova House.
“Indeed the cladding comments in the letter relate to the service charges where the previous owners of GRE5 [Ground Rents Estates 5 Limited] had added a reserve for cladding. We were confirming this was not something leaseholders needed to pay now Slough Borough Council has taken over GRE5 [Ground Rents Estates 5 Limited].”
Slough Council argues that LKP’s report linking its legal action at Nova House over the fire marshals’ bill with those concerning Vallea Court and Cypress Place in Manchester last month is inaccurate.
Slough Council suggested that LKP remove references to Slough from the article and wait for a full response from the directors of Ground Rents Estates 5 Limited next week.
The LKP trustees decline to do so, as there has been sufficient waiting for Slough Council to make its position clear over Nova House for some months.
Martin Boyd, LKP trustee, told Slough Council:
“I would respectfully suggest your position conflicts totally with your letter sent to leaseholders on 23rd July: “we have instructed JB Leitch Limited to make an application to the First-tier Tribunal (FTT) to determine the reasonableness and payability of the fire marshals as part of the service charge”.
“I am afraid we have waited for many months for Slough to respond to emails. We will note Slough’s decision not to respond save for your claim that you are somehow not initiating an FTT related to cladding costs despite the contents of your letter dated 23rd July.”
In addition, LKP has been shown a budget statement for Nova House sent to leaseholders by the commercial management company at the site showing an annual budget of £1,999,010 for 2018 compared with £182,016 last year.
The increase is £312,000 for firewardens and £1,550,281 to go to the contingency fund, presumably to pay towards cladding.
Slough Council’s correspondence with LKP adds that “it is unfortunate you have chosen such a combative stance towards Ground Rents Estates 5 Limited and the council, in particular when the council stepped in and took control of Nova House to work with the leaseholders and their tenants to ensure their safety and future; when no one else could, or would”.
In fact, ministers have repeatedly suggested that developers and freeholders absorb the costs of Grenfell cladding removal and “do the decent thing”.
The general ministerial view seems to be that housebuilders and investor freeholders coin so much money out of the leasehold system that they might as well pay up to put right the Grenfell cladding.
That’s a bit too rough and ready for the property tribunal, however, which has to interpret the law.
Nor could it be said about Slough Council – or its council taxpayers – which have for some reason taken on the burden of Nova House.
LKP’s concern is that the Cityscape case in Croydon – resolved after Barratt stepped in to pay for the cladding removal at a site it built in 2003 – started with the initial estimate of the landlord’s costings for firewatch at about £500,000.
It was just after the leaseholders made their witness statements that those costs jumped to about £2.5 million to cover the cladding replacement as well.
The directors of Ground Rents Estates 5 Limited are:
Robert Neale Cooper Head of Finance (Transformation) Slough Borough Council
Mike England Strategic Director Regeneration, Housing and Resources Slough Borough Council
Stephen Gibson Head of Asset Management Slough Borough Council
The letter from Slough Council to leaseholders is here: