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.
£3m Grenfell cladding bills fall on residents at Lendlease’s Cypress Place and Vallea Court
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:
In the correspondence with LKP you mentioned – 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,”
Yet in the next paragraph they state:
Additionally, we are in the process of defining the programme of works that will bring the building up to an acceptable safety standard, and for that reason we will not be expecting leaseholders to pay the costs of the removal and replacement of cladding until we have determined the actual cost of the works programme.
Is this misleading – a tribunal or not – from the above paragraph:
“UNTIL WE HAVE DETERMINED THE ACTUAL COSTS”
Is this not saying – Slough Council expect leaseholders will pay for the cladding?
You are not wrong, Chas
Oxford City Council (OCC) publicised a project that primarily aimed to improve tower blocks and surrounding area. OCCs tower blocks refurbishment could be seen as part of larger plans to regenerate disadvantaged parts of Oxford.
When the legal issues regarding costs, OCC reasons notably changed in response to wider events. Instead of using the word Improve’ it began using the words Repair & Maintenance.
The focus of OCCs narrative changed again, following the fire at Grenfell Tower and decided to add Sprinkler Systems in the buildings, as well as updating the Fire Alarms and new Fire Doors.
The First Tier Tribunal (FTT) heard evidence from both OCC, claiming the works had been necessary as Maintenance & Repair, whilst the leaseholders argued most of the work was improvement.
The FTT decision was in this case favourable to leaseholders, ruling most of the work undertaken on the Tower Blocks constituted improvement; New windows – Winter gardens – Replacement roofing, – Insulation and Cladding were all considered to be Non Essential works counting as an Improvement.
Works such as maintenance of: Balcony roofs & floors, concrete and wall ties, work to lifts were considered recoverable through Service Charge provisions in the leases. The original bills that Oxford City Council delivered to leaseholders in the region of £40,000 to £60,000, later were dramatically reduced to £2,500 to £4,000
Forgive me if this sounds a little simplistic?
Slough Council have bought a worthless freehold of Nova House for £1..
The reason the freehold is worthless is due to the cladding situation?
Once replaced, Nova House will again become a valuable freehold.
The beneficiary will be Slough Council?
So, if Slough Council can get leaseholders to pay for fire wardens and then get leaseholders to pay for the replacement cladding for a £1 outlay they do stand to make a substantial windfall do they not?
The Maidenhead Advertiser in March 2018 stated the following.
Slough Borough Council have taken over Nova House due to fears for the safety of residents due to the cladding failing a fire safety test.
So has this action been taken for the genuine benefit and safety of its residents or in the hope that the residents will have to pay themselves for the safety works and fire wardens leaving Slough Borough Council with a safe and valuable building.at a cost of £1.
The Maidenhead Advertiser in March 2018 stated Slough Borough Council have taken over Nova House due to fears for the safety of residents due to the cladding failing a fire safety test.
Has this action been taken for the genuine benefit and safety of its residents?
Will the residents be expected to pay for the safety works and fire wardens, as a Local Authority did they really have a choice?
Do we know why ground rent speculator Robert Steinhouse gave up this development for a nominal fee?
Hopefully Slough Council will follow government guidance and pay the costs of fire wardens and cladding instead of their current policy. If they made a precedent they could sell the individual freeholds to the leaseholders. This would then make the building safe and entfranchise the leaseholders.
Posting “Hopefully Slough Council will follow government guidance and pay the costs of fire wardens and cladding”?
Do we know what is the Governments current policy?
According to a report in The Guardian January 2018, the cost of making the building safe was £4million. A sum which apparently the then freeholder could not afford.
So it was agreed the Slough Borough Council should take ownership and complete the works.
But of course their funds are seriously depleted due to Government austerity policies, so they now have to make a decision on paying the £4million and cutting services to allow this cost to be met.