The Fire Safety Bill has passed through Parliament following a long-running debate over who pays the costs of cladding remediation works and other fire prevention measures. The House of Lords sought to include a proposal which would prevent remediation costs for fire safety deficiencies being passed on to leaseholders. However, the House of Lord’s motion has been defeated, with the unamended Fire Safety Bill now set to become law.
The Fire Safety Bill was introduced in March 2020 as part of a series of proposed changes to fire and building safety following the Grenfell Tower fire in June 2017.
The Fire Safety Bill amends the Regulatory Reform (Fire Safety) Order 2005 by clarifying that duty-holders / building owners of multi-occupied residential buildings of any height must manage and reduce the risk of fire for:
- The structure and external walls of the building (which includes cladding, balconies, and windows); and
- Entrance doors to individual flats that open into common parts.
When debating the Fire Safety Bill, a key issue arose between the House of Commons and the House of Lords, in relation to whether, and to what extent, leaseholders would be required to pay for cladding remediation works and other fire prevention measures (as discussed further in our previous article that is accessible here).
In November 2020, the House of Lords proposed that the Fire Safety Bill should be amended so that it prevented freeholders from passing on remediation costs to leaseholders through increased service charges or one-off payment demands. The Fire Safety Bill was passed back to the House of Common for consideration, but the proposed amendment was defeated on 24 February 2021.
The House of Lords continued to debate the motion to protect leaseholders from remediation costs and voted again in favour of the proposed amendment. However, this amendment was rejected in the House of Commons on 22 March 2021.
The Fire Safety Bill went back to the House of Lords on 20 April 2021, where peers again voted in favour of a proposed amendment preventing building owners from passing the cost of building safety works on to leaseholders.
This contentious issue was therefore debated again by the House of Commons. However, despite a rebellion from 31 Conservative MPs, the majority of MPs voted not to accept the House of Lord’s amendment. Following this third defeat, the Fire Safety Bill went back to the House of Lords and it was passed unamended.
The Government’s position was that it supported the intention to protect leaseholders from remediation costs, but the majority disagreed that the Fire Safety Bill was the right vehicle to address this issue. The Housing Minister, Christopher Pincher, said that the proposed protection for leaseholders was too widely drawn and would “reignite uncertainty in the market” and make it harder for lenders to value properties.
The Fire Safety Bill being passed unamended will undoubtedly raise concerns amongst leaseholders in regard to the extent freeholders will pass on the remediation costs for fixing fire safety deficiencies. Following the Grenfell Tower fire, a vast number of residential buildings have been scrutinised over the cladding materials used and other fire safety defects relating to, amongst others, fire breaks, fire doors and sprinkler systems.
The Fire Safety Bill allows £5.1bn in funding to pay for work on buildings taller than 18m and plans to introduce a loan scheme for people in smaller buildings between 11m and 18m. The loan scheme intends to offer long-term, low interest loans to building owners to cover the cost of removing combustible cladding and fix fire safety risks. The cost of repaying these loans will then be passed on to leaseholders, with a cap on repayments at £50 per month. However, concerns have been raised by the Housing, Communities and Local Government Committee, who have called on the Government to abandon the proposed loan scheme and to, in its place, establish a larger fund to address the true scale of the fire safety issues.
The recent defeat of the House of Lord’s motion to add protections for leaseholders will certainly lead to greater scrutiny on the further proposed changes to fire and building safety, including, the highly anticipated Building Safety Bill (which is discussed further in our previous article that is accessible here).