Residential building owners or residents’ management companies (RMC) only have a limited time to register for eligibility for the government’s £1bn Building Safety Fund (BSF) to replace combustible, non-ACM cladding on buildings over 18m high, with the 31 July deadline approaching rapidly.
A report by the Commons Housing, Communities and Local Government Committee has warned that the financial support “will fall far short of what is needed”, meaning that there is likely to be a scramble for the funding pot that has been made available.
What would be the consequences for a landlord or RMC if they fail to apply for the BSF?
Initially, it must be ascertained who is responsible for making the claim and in most cases, it will be the party named in the lease or tenancy agreement. Legal advice should be obtained to confirm this.
Once the correct applicant is identified, time will be needed to undertake opening-up works and to consult with experts on whether a particular building’s cladding is of the type that should be replaced. As these experts are in great demand, it is not beyond the realms of possibility that their reports will not be submitted in advance of the deadline. Registrations for eligibility should be submitted regardless, with the cladding information provided when available.
Should a landlord or RMC fail to make an application by the deadline, then it could be faced with seeking to claim the remediation cost back through the service charge. But in this situation, it might fall foul of S.19 of the Landlord & Tenant Act 1985, which states that costs passed on through a service charge should be “reasonably incurred”.
Clearly, failing to apply for the grant but passing on the cost of works through the service charge could be interpreted as not being reasonably incurred.
In this case, it is possible that the tenant will look to the First Tier Tribunal to void its liabilities.
There are plenty of anomalies over the provisions of the BSF, and the government is likely to have to dig deeper into public funds as the extent of the shortfall becomes known. But those responsible for the tower blocks must apply immediately and meet the deadline to avoid possible legal redress.
Charles Seifert is partner at SAY Property Consulting