This is the first site in England to begin legal action against its landlord and developer
With 980 flats, New Capital Quay is the largest site to have massive bills to remove Grenfell cladding. Irish-based Galliard Homes, which built the site only four years ago, owns the freehold and manages the complex and – when sales were happening – ran the on-site estate agency, too.
The action taken by the leaseholders is against Galliard Homes Ltd and the site’s landord Roamquest Ltd a firm owned in Galliard Holdings Ltd and NCQ Development Ltd which in turn is owned by Galliard Homes Ltd
The leaseholders of flats that are part of the New Capital Quay (NCQ) development in Greenwich, London, have launched a group legal claim in respect of fire safety issues including the use of flammable Grenfell-type cladding against the developers and landlord of the buildings.
NCQ is thought to be the largest development in Europe which is affected by such cladding, comprising 11 tower blocks and over 1000 flats made up of both private apartments and social housing.
Law firm Leigh Day is currently representing 58 leaseholders who between them own 36 flats, and expects more to join the claim. Some of the leaseholders live in the flats in the development while others let them out to private tenants.
A letter before action was sent to Roamquest and Galliard Homes on 13 May 2019, following an initial group of 10 claimants who commenced court proceedings in April to protect their position in respect of the time limit to claim.
The leaseholders are bringing the legal claim against Roamquest and Galliard Homes for breaching the Defective Premises Act 1972 and, in some cases, also for breaching their sale contracts with Roamquest.
The claimants allege that, as a result of fire-safety defects including the use of flammable cladding, their flats were not constructed in accordance with the Building Regulations and are not fit for habitation.
Both the developer and landlord, Roamquest Limited, and developer Galliard Homes Limited, are part of the Galliard Group.
The 11 NCQ tower blocks were constructed with cladding made from aluminium composite material (ACM). Following the Grenfell tragedy, Roamquest arranged for the ACM cladding to be tested by BRE, who assessed that it had no flame-retardant properties.
The new build insurer the National House Building Council (NHBC) determined following an extensive investigation that the Building Regulations were breached and agreed to pay for the cost of replacing the cladding.
However, many other losses caused by the fire safety defects are not covered by the policy and the claimants are therefore seeking compensation for those from Roamquest and Galliard Homes.
Those losses include various individual expenses, loss of income, reduction in property values, and the distress and inconvenience.
Residents are also concerned that the remedial works funded by NHBC are too slow and that residents may have to pay for additional works that are uncovered by the remedial works.
In addition, it is unclear whether costs such as the 24-hour waking watch, plus any insurance premium increases, will be passed on to the leaseholders through their annual service charge.
Roamquest and Galliard Homes deny that the Building Regulations were breached.
As a result of the cladding, some leaseholders have been advised there has been a huge drop in the value of their properties, leaving them effectively trapped until remedial work is completed – in one example a flat bought for £500,000 was last year valued at £50,000.
Other leaseholders are said to have had sales fall through because banks and other mortgage proiders have refused to provide mortgages to the potential buyers until the cladding is replaced, and some have had to rent second properties at great expense.
Residents have to deal with the distress and anxiety of knowing they are living in a potential fire trap.
It is claimed that there have been several fire safety incidents at NCQ since the Grenfell tragedy, such as a fire at one of the buildings in September 2018, a false alarm in another building in 2018, and a recent small fire on a balcony caused by a cigarette.
The residents will also suffer from the noise, dust and loss of privacy as a result of the construction work.
After some delay in commencement, the work to replace the cladding has now begun but is not due to be completed on all buildings until August 2021.
Chris Haan, solicitor at Leigh Day representing the leaseholders, said:
“Although the NHBC has agreed to fund the replacement of the cladding, this will not cover the full cost to our clients. Property values have potentially been slashed, the landlord has yet to confirm whether substantial additional costs will be passed on to leaseholders, and residents continue to be distressed by disruptive remedial works and by the risk that they could be incinerated in their homes.
“While the government’s recently announced £200 million fund to help cover the cost of replacing unsafe cladding is welcome, it is widely assessed as being insufficient to cover the cost of replacing cladding on all affected buildings in the UK, let alone other losses such as those suffered by our clients.
“Developers and landlords should take responsibility for the full losses caused by defects in their buildings.”
Examples of some of the leaseholders impacted
Harry Howe, 33, who owns one of the properties and lives in it with his partner and their young baby, said:
“This was our first home as a young couple, purchased with hard-earned savings. We have had to deal with the genuine fear of being incinerated in an inferno-type scenario. Additionally, the prospect of having to evacuate a fifth floor flat through smoke-ridden corridors with an eight-week-old baby and a wife recovering from childbirth is a galling prospect.
“Our family is growing and would have otherwise been looking to move on and sell the flat this year.
“This choice has now been removed from us and our life plans have been put on hold due to the developer’s inability to comply with building regulations.
Name: Harry Howe Age: 33
Occupancy: occupier, purchased lease in 2014.
Impact:
- Life plans put on hold, including looking for more space to accommodate a growing family, now plagued with uncertainty due to the predicament
- Anticipate further impact when re-mortgage of the property is due in the next 12 months as it might mean having significantly higher monthly repayments through no fault of their own.
- Notified of a possible cost of around £1,400 to pay for the cost waking watch prior to the NBHC taking on the claim
- Increase in building insurance costs, increased by around 30 % in last two years and anticipating further increases
- Having to deal with the genuine fear of being incinerated in their own home. Work scheduled to take place over the summer and have been told not to open the windows through the day while work is ongoing – which means they will have a young baby in a very hot flat. Also concerned about the noise/dust impact on the baby
- May have to seek alternative accommodation whilst the remedial work is completed (scheduled to take 38 weeks).
Leah Irish, 32, who is an owner occupier of one of the flats where she lives with her husband Chris and their 20-month old daughter, said:
We have a young family and are desperate to move to a bigger property to provide more space for our daughter and to allow us to grow our family further. However, due to the flats not complying with building regulations we have been left in the distressing position of putting our young child to bed every night in a property which is not safe.
Name: Leah and Chris Irish Age : 32 & 31
Occupancy: Owner occupier – purchased the lease July 2014
Impact
- Loss in value – estimated by surveyor at c£90k
- Inability to sell the property, even at a reduced price the flat has been on the market for six months
- They have a young daughter (20 months) and would have liked to have moved two years ago to a larger family home, currently in a small 2 bed flat with no outdoor space
- They would like to have a second child but are unable to do so as there is not enough space in our current flat and no timeline for when they will be able to move
- It has also been emotionally distressing for them, putting a young child to bed every night in a property which is not safe and has a waking watch in place which they feel is not fit for purpose.
LKP comment
The cladding disaster has shown up a wide range of defects in our building regulations the warranty system and leasehold law.
Somehow warranty claims can only be paid if the building show to be defective but the developers to deny their construction was in breach of building regulations in such a way that it makes those buildings defective.
NHBC who may also have been responsible for overseeing the building regulations at the time of construction deny their oversight defective.
Those materials which used to pass various BSI tests under building regs are now deemed to fail those same tests but there is somehow no acceptance that the testing system was at fault either.
Building regs themselves have now been updated to impose higher standards for ensuring materials non-falamibe but these regs were not at fault as far as the government is concerned.
While everyone accepts it is not the fault of the leaseholder they live in cladding blocks they continue to be faced with Tribunal decisions that make them liable for the costs or replacing the cladding under and fire watch under leasehold law.
Somehow the government continues to ask landlords who are just third party ground rent investors (rather than the developers) to pay even though cladding is not their fault either. These thrid party landlords just own the right to a ground rent but becasue they are also seen as the “building owner” officials think they might somehow be persuaded to pay.
In other countries, the “building owners” are the people who own the flats and many are in a far better position to take action against the developer. In the cases where they can’t the government is in a far better position to lend them the money.
Becuase of our flawed leasehold laws there is no real means or inventive for these third-party landlord to bring action against the developer so in most cases nothing has happened.
NCQ leaseholders are the first site to find a way to bring action against the developer but for many sites thier chance of bringing action is limited by laws which limit the period for bringing action for defects which is why the NCQ leaseholders have had to act now.
Related posts:
Grenfell cladding leaseholders form campaign group 
Leaseholders face £19m to £40m Grenfell cladding bills at Galliard Homes’ New Capital Quay NHBC accepts Grenfell cladding bill at Galliard’s New Capital Quay 
New Capital Quay cladding may cost £7-10m, while NHBC sends in experts – and libel warning to BBC 
All Party Parliamentary Group, April 26: Barratt praised at Citiscape; Galliard reviled at New Capital Quay; Taylor Wimpey scorned over ground rent review scheme
Well done Leaseholders at New Capital Quay owned by Galliard Homes who use an in house Managing Agent – Roamquest Ltd.
It shows they ran an On-Site Estate Agents, remember those Fleecehold Builders who also used In House Solicitors and Conveyancers.
Finally, have we seen the, Turning of the Worm and blame being laid at the doors of the “Construction Team” which includes:-
* Government Ministers for Legislation
* Planners/Building Control/NHBC/Approved Inspectors
* Architects/Surveyors/Specialist Contractors
* Construction Companies/Sub-Contractors
* Freeholders/Landlords/Managing Agents
The New Capital Quay is now a defective building and covered by the “The Defective Premises Act 1972” (DPA)
This is an Act of Parliament of the UK covering Landlords’ and Builders’ liability for poor construction and or poorly maintained premises.
During the 19th century, the Common Law principle was that a Landlord could not be liable for letting a poorly maintained dwelling house was wrongly established. In the 20 Century Courts began to turn against this First Principle, imposing many restrictions on the landlord’s immunity, but still, Landlords were largely free from being sued.
The DPA came into force 01/01/74, the Act establishes a Duty of Care to those involved in the construction of building premises to include the Main Contractors and Sub-Contractors who owe to the occupiers of any premises which are constructed or refurbished, towards their tenants and any third parties who might be injured by any failure to replace faultily materials and or repair and maintain premises.
Yet again one can see the Freeholder/Landlord has over the years been taken to task only by Legislation, not Self Regulation which has been seen as a waste of the paper the Codes were written on.