Phil Morrison, who heads up Clarion’s construction team, takes a look at some of the questions being raised in the wake of the Grenfell fire disaster three years ago.
Who is responsible for paying for replacing flammable cladding?
There is understandable concern amongst the owners of apartments in high-rise buildings as to the level of financial liability that these owners may have for the replacement of the cladding to their high-rise building.
The fire safety of buildings is governed by overlapping legislation under the Housing Act 2014; the Regulatory Reform (Fire Safety) Order 2005 (RRO) and Building Regulations. Under this legislation the responsibility for fire safety in apartment buildings can be imposed on the Landlord/Freehold Proprietor for the overall building, or the Management Company for the Common Parts and the Leaseholders for apartments and common parts.
As a result, it is likely that all of these parties will have responsibility for paying for (contributing to) the replacement of flammable cladding. However, there are various factors that influence where liability lies, and I would encourage those who are unsure to seek legal advice.
As a leaseholder or freeholder, what process do you have to go through to identify who is liable for replacing the cladding?
The potential claims that arise in this situation include a failure to meet the statutory obligations (mentioned above) for the design of the development, for the selection of materials used in the development and for the standard of workmanship used in the development.
The key issue is who a claim of this nature should be brought by and who it may be brought against. It will be important to establish the relevant facts, to understand how the particular cladding came to be installed and whether what was actually installed on the building is the same as what was specified to be installed. The parties and contracts to be identified are the developer, building contractor and design team.
What is the contractual arrangement between the leaseholders and the developer, the design professionals and the contractor/sub-contractors?
It is unlikely that each of the leaseholders will have a direct contractual relationship with the parties who built and designed the building. Without this direct contractual relationship, any claim must be brought under the principal of negligence/tort. However, these are very difficult to win. The leaseholder may have a contractual claim against the developer/landlord.
The first point of call for leaseholders would be to review the NHBC/Zurich/Checkmate warranty issued in relation to the apartment, to see if this covers the cladding. Leaseholders will also need to look at the lease, freehold documentation and management company agreement – which will set out the obligations and liabilities of each of the parties and what will be covered under the service charge. In addition, they will need to look at the insurance documentation. If leaseholders are unsure, it is important to seek legal advice.”
At the time of construction my apartment building complied with regulations, however it now doesn’t – where does the liability lie?
If cladding complies with the Building Regulations in force at the time of construction, there is no requirement under the Regulations for upgrading existing fire safety measures to current standards. However, existing non-compliances with the current Building Regulations must not be made any worse in the course of alterations or building works. Powers also exist under the Building Regulations to require unauthorised material alterations to be rectified if a breach of the Regulations resulted from the work. At any time, an application can be made to the local authority building control for ‘regularisation’ of unauthorised work carried out after 1985, enabling retrospective approval to be granted, subject to the work being satisfactory.
My building has been identified as having unsafe cladding, which has meant that we have had to pay for Fire Marshalls – who is liable to cover this cost?
In the first instance, the Fire Marshalls will be appointed by the management company and the costs recouped from the leaseholders through the service charges. Such costs may be recoverable from any party who is responsible for non-compliance of the cladding, if it can be shown that the Fire Marshalls were required as a direct result of this non-compliance.
