The End Our Cladding Scandal (EOCS) campaign recently published a report on housing associations and building safety: Dereliction of Duty: How housing associations failed leaseholders trapped in the building safety crisis. It makes for sobering reading. But it’s essential reading for shared owners and shared ownership providers. Nearly 83% of those surveyed purchased their home via the shared ownership scheme.
In this feature Shared Ownership Resources shares some key findings from Dereliction of Duty.
The building safety scandal is a monumental human rights crisis
Leilani Farha wrote to the UK Government in 2020 to express concerns that it was disregarding the human rights of people living in unsafe buildings.
“A significant number of people in the UK continue to be abandoned, their human rights being breached by their housing providers. Shockingly, those responsible are not only ‘the usual suspects’ – private, for-profit developers and investors – but are also housing associations, who typically espouse strong social values and the objective of providing safe, affordable housing to those who need it.”Leilani Farha, United Nations Special Rapporteur on the Right to Housing (2014 to 2020), Dereliction of Duty
Counting the cost
- 352 households responded to the EOCS survey
- The vast majority of respondents (289 or 82.8%) had bought via shared ownership
- 67.3% of shared owner respondents currently own a minority equity share of 50% or less
- 106 respondents had received estimated costs
- 51% faced a personal bill of over £20,000
- 35% faced a personal bill of over £50,000
- 8 in 10 worried about costs and/or had researched bankruptcy
- Over 9 in 10 said that the building safety crisis had impacted their mental health
- 1 in 5 had been prescribed medication or taken time off work due to stress and anxiety
Who should be responsible for building safety remediation costs?
Shockingly, more than four years after the Grenfell fire, this is still an ongoing debate. But EOCS are clear who shouldn’t be responsible.
“Leaseholders, whether in the private or social housing sector, should not bear the costs of the building safety crisis”.End Our Cladding Scandal, Dereliction of Duty, 2022
EOCS point out that leaseholders in both the private and social housing sector are the victims of monumental system failure:
- regulations which weren’t fit for purpose;
- manufacturers who mis-sold their products;
- developers who sought to cut corners and maximise profit at the expense of fire safety;
- building control officers who knowingly signed off unsafe buildings; and
- insurance companies who are leveraging this crisis to increase premiums by an average of more than 400%.
Shared ownership, housing associations and building safety
Who owns what? Who pays for what?
EOCS found that many respondents felt misled by the sales and marketing of shared ownership. (An issue on which Shared Ownership Resources has previously reported). The report quotes LEASE and Share to Buy websites: ‘The leasehold ownership of a flat usually relates to everything within the four walls of the property, including floorboards and plaster to walls and ceilings, but does not usually include the external or structural walls‘. LEASE and Share to Buy both go on to say: “The freeholder is responsible for the maintenance and repair of the building, with costs for doing so being recoverable through the service charges which are billed to the leaseholders”.
But are crucial distinctions between ‘ownership’, repairing obligations and legal liabilities for repair and maintenance costs clearly communicated by housing associations? Take a look at housing association Metropolitan’s website (accessed 22 February 2022) and make up your own mind.
Shared ownership leaseholders are particularly badly impacted. They have to pay 100% of remediation costs although they only ‘own’ a share of their lease. Perhaps as little as 25%.
Most shared owners had to meet stringent affordability tests in order to access ‘affordable’ housing schemes. Yet this seems to be irrelevant when it comes to the exceptionally high bills for building safety remediation.
“Costs not yet confirmed but estimated at £47k. It was suggested we could approach our banks or mortgage providers for a loan, or spread payments over 10 months.”Onward Homes Group leaseholder, Dereliction of Duty, 2022
Conclusions and recommendations
Not surprisingly, EOCS conclude that housing associations are failing those caught up in the national building safety crisis. So the report includes a number of detailed recommendations. One key recommendation is to actively involve residents – including leaseholder and cladding action groups. This is essential to drive meaningful reform to uphold the human rights of those affected by the building safety crisis.
(Who are EOCS? The campaign is a resident-led collaboration between Inside Housing, the UK Cladding Action Group, Manchester Cladiators, Grenfell United and other resident groups. In September 2020 EOCS set out 10 steps to fix the building safety crisis following the Grenfell Tower fire. 72 people died in the horror of that fire.)
UPDATE 28 February 2022: Caroline Lucas, Green Party, tabled a question to be answered by the Department for Levelling Up,Housing and Communities (LUHC).
To ask the Secretary of State for Levelling Up, Housing and Communities, what assessment he has made of the implications for his policies of the recommendation in End Our Cladding Scandal’s Dereliction of Duty report, published on 20 February 2022, on strengthening the role of the Regulator of Social Housing and Housing Ombudsman to ensure that (a) housing associations are held to account for their obligations relating to building safety and (b) leaseholders are able to obtain appropriate redress in circumstances where a housing association is found to have failed to uphold those obligations; and if he will make a statement.Caroline Lucas, Green Party
Answered on 3 March 2022
The Regulator of Social Housing’s consumer regulation function is primarily responsible for regulating landlords in their delivery of services to tenants, and in some cases shared owners. The Regulator of Social Housing does not have a legal remit on protections for leaseholders. Leaseholders in properties owned by registered providers have different arrangements than tenants – they operate under the terms of a lease rather than a tenancy agreement, which are subject to separate legal and contractual requirements.
The Housing Ombudsman Service’s role is to resolve disputes involving tenants and leaseholders of social landlords (housing associations and local authorities). The Housing Ombudsman’s role is set out in the Housing Act 1996 and The Housing Ombudsman Scheme approved by the Secretary of State. We have strengthened the Housing Ombudsman’s powers and increased their resources to help improve performance and delivery of services. This has enabled the Housing Ombudsman to publish important work such as their Spotlight reports into leasehold, cladding, damp and mould in social housing.
Through the Building Safety Bill, we will be ensuring that building owners of higher-risk buildings have clear accountabilities for managing building safety as Accountable Persons. This will include housing associations and other social housing providers. Leaseholders and residents will have a clear voice under the new regime and will be empowered to hold their Accountable Person to account. They will have the ability to raise and escalate complaints to the Regulator of Building Safety for breach of building safety obligations. We are also laying a series of amendments to the Building Safety Bill to require that historical safety defects in any building above 11 metres or five storeys owned by a landlord associated with that developer must be fixed by them. Building owners that can afford to pay must not pass any costs relating to remediating those historical safety defects to leaseholders.Stuart Andrew, Conservative Party