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 have had sales fall through because banks and other mortgage providers 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. 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.
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.”
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.”
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.”