Contribution
I associate myself with the remarks of the Deputy Prime Minister and my hon. Friend the Member for Taunton and Wellington (Gideon Amos) in recognising the pain, grief and hurt caused to so many connected to the Grenfell Tower tragedy, in which 72 lives were lost. I have heard the sombre comments in this debate and mean no disrespect by raising a specific matter relating to the understanding and interpretation of the legislation passed subsequently—namely, the anomaly of non-qualified leaseholder status, as it affects some constituents of mine.
My constituents own a one-bedroom flat in north Somerset. It is not a penthouse or anything luxurious; it is simply a home. They purchased it in 2015 with a 999-year lease, and it was a new build, so it was theoretically covered by the NHBC 10-year guarantee. They believed it would be an ideal long-term rental property, without too many maintenance issues ahead.
A neighbouring flat went up for sale in August 2024, and the buyer’s solicitor asked for an up-to-date fire risk appraisal. This prompted the management company to organise an assessment of the external walls, and the report strongly recommended cladding remediation work. My constituents would have known none of that, had it not been for the seller keeping them in the loop.
The new financial protections in the Building Safety Act 2022 apply to leaseholders in buildings above 11 metres, or five storeys in height, with historical safety defects. From 28 June 2022, qualifying leaseholders in England could no longer be charged for cladding remediation, and there are legal protections for non-cladding costs. The accompanying secondary legislation came into force on 20 and 21 July 2022.
The Government are clear that developers must pay to fix buildings that they had a role in developing or refurbishing, even when they no longer own the building. That seems right. The Act ensures that building owners who are, or are associated with, the developer must pay for the remediation of historical defects. The courts have been granted new powers to extend liability to associated companies, ensuring that civil cases for claims against defective buildings can be brought against companies associated with a developer, preventing the use of complex corporate structures to avoid that liability.
Qualifying leaseholders are protected from all cladding system remediation costs. Those whose property is calculated to be worth less than £175,000 outside London, or £325,000 in Greater London, or whose building owner has a group net worth of more than £2 million per relevant building as of 14 February 2022, are exempt from all historical safety remediation costs. The Act also includes a robust package of measures designed to ensure that those responsible finally put right the buildings they have contributed to making so dangerous, and that leaseholders are firmly protected from the unfair costs of remediation that they previous faced. No one could disagree that, on the face of it, that is fair.
Unfortunately, the previous Government failed to notify any leaseholders, qualifying or non-qualifying, of the implications of the Building Safety Act 2022, which came into force on 28 June 2022. However, four months ago, my constituents had no knowledge of the non-qualified leaseholder status that had been bestowed on them. Without any prior notice or consultation, my constituents’ legal rights as leaseholders had been significantly changed, backdated to 14 February 2022. That is because, as of that date, the threshold for non-qualified leaseholder status cuts in at ownership of four properties.
It is very hard to find definitions of non-qualified leaseholder status on the Government website. There is plenty about qualified leaseholder status, but very little about non-qualified leaseholder status. The Under-Secretary of State for Housing, Communities and Local Government, the hon. Member for Nottingham North and Kimberley (Alex Norris), has confirmed that, weirdly, under the previous Government’s legislation, a couple can own five properties, provided that they own their primary home jointly and two other properties each. However, a couple who own four properties jointly become non-qualifying leaseholders. Who on earth can think that is fair? That will discriminate against couples and families as compared with sophisticated business entities, which are probably the intended target of the legislation.