The leaseholders at the Citiscape site in Croydon are to bear the costs of removing the Grenfell cladding and for the fire watch, the property tribunal has ruled.
Without other intervention, this means that some of the leaseholders will inevitably lose their homes.
Although the tribunal has ruled that estimated costs to replace the cladding is rule as “reasonable”, no one is under any illusions that this will not be the total.
FirstPort, which initiated the action, estimates £1.8 million to £2 million as the likely figure.
This is the second tribunal ruling on the issue of Grenfell cladding following that of the Fresh site in Salford and it is the second defeat for ordinary homeowners.
The 95-flat Citiscape site, of two blocks with a car park, was built by Barratt 2001 and the freeholder is Proxima GR Properties, one of the freehold-owning companies of Vincent Tchenguiz that ultimately belongs to the so-called Tchenguiz Family Trust based in the British Virgin Islands.
The property manager FirstPort – which is written into the lease in a tripartite lease arrangement – took the tribunal action to obtain a clear ruling on liability, ensuring that neither it nor the Tchenguiz Family Trust, which accounts for 65 per cent of the freeholds FirstPort manages, have to pay up.
The tribunal did not consider the costs for the fire watch because FirstPort cannot recover these until the end of the current service charge year on August 31 2018: until that time, FirstPort is paying for the fire marshals itself.
However, it noted that these costs were running at £4,216 a week, or £263,000 a year.
The tribunal also referenced the cost of removing and replacing the Grenfell cladding, with two options costing £1.8 million and £2.5 million: “nearly a fourfold increase in the estimate given by the manager’s internal surveyor earlier in the year”.
The tribunal noted that nearly all the tenants (ie leaseholders) who responded to the application objected to the waking watch costs: “Some were simply prepared to take the risk of dispensing with the waking watch.”
That was perhaps unhelpful for the tribunal to note, because this point was certainly not made to it during the case, where the leaseholders were represented by barrister Amanda Gourlay.
The tribunal made repeated references to the possibility of an appeal and the fact that this issue will very likely return to the courts.
In other words: if any court is going to get the leaseholders off the hook, it would have to be a higher one.
So far as this tribunal was concerned, whatever the final costs – which are still unspecified – the bill stops at the leaseholders.
Communities Secretary Sajid Javid told the Commons yesterday: “We have made it clear that, when it comes to the private sector and this type of remedial work, it should take a lead from the social sector.
“It is the moral duty of any freeholder to meet any necessary costs.
“There are a number of legal issues. There is an important legal case that is going through the courts right now, so I will not comment much more, but it is something that we are keeping under review.”
LKP cannot quite understand why the Secretary of State is saying this, except it reveals the truth that freeholders are simply parasitical rentiers who graze on ground rents, insurance commissions and other fees and have no serious interest in a building whatsoever.
They are not analogous to a landlord who owns and rents out a freehold house.
The freehold to a block of flats has minimal value compared with the total value of all the leases of the flats – yet in law the owner of it has almost ALL the power.
That power is invariably used wrongly, which is why leasehold is now a national scandal being addressed by government.
The Guardian report today is here:
Leaseholders in an apartment block covered in Grenfell-style cladding have been ordered to pay £500,000 to make their building safe after a tribunal ruled that they, rather than the management company, were obliged to cover the costs.
Full ruling below: