The Human Cost of the Cladding Scandal
By: Dr Alan Smith
Tags: UK Politics, Bankruptcy, Fire Safety, Cladding, Building

The Human Cost of the Cladding Scandal

It is two months since parliamentarians were defeated in their efforts to amend the Fire Safety Bill and protect leaseholders from unaffordable costs. At the time it was bitterly disappointing, because we knew what the consequences of failure would be for leaseholders.

The Fire Safety Bill contained measures to accelerate the pace of remedial fire safety works, something which was important and timely and which is to be welcomed. However, the problem was and remains that without a plan to finance these works, the costs inevitably default onto leaseholders.

My involvement in the Fire Safety Bill and support for the cladding scandal campaign brought me in contact with campaign groups and numerous leaseholders. Though the solution remains the preserve of the Government, I want to share some of the stories I have heard as a reminder of the real human cost of this crisis.

I have altered the names of these individuals to protect them from potentially unscrupulous managing agents and have avoided mentioning the specific development to protect the value of their assets.

A parent’s concern

Like any good parent, John and Andrea wanted the best for their daughter. In 2017, due to their children leaving home they decided to downsize from their current property. With the leftover capital from selling their original property, they decided to give their daughter £40,000 to help her put down a deposit down on her first property in a new-build development. They described their daughter as ‘a very hard working young professional person, who also saved towards her deposit and even sold her own car.’

Unfortunately, her dream first home turned into a nightmare.

No one had told her that the development was clad in flammable material similar to that used on Grenfell tower. Not surprisingly, their daughter is worried that she might have to declare herself bankrupt due to the ever-increasing additional charges imposed on her. As parents, John and Andrea are deeply concerned about their daughter’s emotional wellbeing and expressed their sympathies towards the anxieties and misery that many other leaseholders face.

No plans to evacuate

Matthew initially bought his property in a shared ownership scheme before purchasing the remainder of his share. Following Grenfell, it was revealed that the development had numerous fire safety defects, ranging from flammable cladding to timber decking on the balconies, and even flammable ceilings.

The freeholder (who is also the managing the agent) demanded £101,000 from each leaseholder to pay for these remedial works. Not only is the bill unaffordable but some of his fellow residents who only have a 50% part-share in their flat were handed the exact same bill.

Matthew suffers from a debilitating mobility disease that represents a serious threat to his life. His disease is so bad that he has been forced to retire. When he contacted the managing agents about what plans they had to evacuate him in the case of a fire, due to his mobility restrictions, the agent admitted that they had no plans in place and that they were not considering putting any in place.

The managing agents refused on numerous occasions to meet with the residents. When they eventually did, residents felt that they were treated with such contempt that they left the meeting early.

Matthew neither has the income, being retired, nor savings to pay for the remedial works. In an email, he reported that the stress was so bad that he developed sores on his skin.

Cramped inside a tinder box

Alice bought a part share in a shared ownership one-bedroom apartment. Though single at the time, she later found love, resulting in her partner and his two children moving in. This was only meant to be a temporary arrangement as they looked to upsize to a more suitable apartment. In early 2019, Alice applied to the housing association to have her apartment valued, as shared owners are required to sell at a price set by the association.

The association delayed their response by several months, at which point the dreaded EWS1 form was required. This led to several offers falling through. In mid-2020, their building received a B2 grading, although within a few months it was revealed that the building suffered from severe fire safety defects. The building even has an in-date warranty, but the provider is simply refusing to indemnify residents for these costs on a technicality.

In late 2020, the building caught fire and smoke spread rapidly through the building due to faulty ventilation systems. Alice is pregnant and the one-bedroom flat is already a squeeze. The situation is causing the family a great deal of financial and mental stress. Alice has a history of depression and spoke of her frequent tearfulness. She is worried that her mood risks upsetting the new baby. She is desperate for her family to be safe and comfortable, yet she finds herself trapped in a cramped apartment beset by factors she has no control over.

Relocate or risk unemployment

Zee’s grandfather began suffering from dementia in early 2010. Aware of his condition, and still wanting to provide for his grandchildren, he began to put money into a Help to Buy ISA for Zee. With some additional help from her parents, Zee and her husband Mohammed were able to put down a small deposit on a 25% flat share. The hope was to sell that flat and use the capital on a deposit so they could move closer to her family once Mohammed had been approved for a work transfer. In 2019 the transfer was approved and scheduled for autumn 2020. However, due to the pandemic, this was delayed until autumn 2021.

In the summer of 2020, it was revealed that their building suffered from numerous fire safety defects. Despite only owning a share of the flat, they received a full remediation bill of nearly £80,000, akin to those handed out to full owners.

Having also welcomed a son that summer, their family — including an existing daughter — had outgrown their two-bedroom flat. Being unable to sell the flat due to issues with the EWS1 form, they approached the managing agent with a request to buy back the flat. Under the terms of the original agreement, buybacks are allowed to prevent the owner from going bankrupt.

The managing agent denied their request for a buy back and insisted they sublet the flat. When the couple approached their bank with a request to let, they were refused on numerous occasions. Despite this, the managing agent still refuses to buy back the share.

Worse still, Mohammed’s company have informed him that if he is unable to complete the transfer, he will be made redundant. Unable to afford the remediation bill, and with the couple’s income threatened, they fear their only hope is to illegally sublet the apartment or begin bankruptcy proceedings and start their lives all over again as renters, so that Mohammed can transfer his job.

Time for the Government to honour their pledge

The four stories told here are not unique. Thousands of leaseholders across the country face similar experiences, trapped in faulty flats, encumbered with debilitating bills and in contact with uncaring management agents.

This is the human cost of the cladding scandal. People are frightened and worried and feel as though they are in a prison of someone else’s making.

I’ve received reports of some MPs being non-responsive, or responding in an uncaring manner telling leaseholders that it was a risk they took, or that the issue was now closed and they had to move on.

This makes it even more worrying, when it was revealed recently that developers donated nearly £900,000 to the Conservative Party in the first quarter of 2021.

The Government consistently said that those responsible for the fire safety scandal, the developers, should be the ones that pay for these remediation works.

At the moment, it is leaseholders who are paying, and a human tragedy is unfolding.

Time the Government honoured their promise.