I have today received a stern letter from Rt Hon Michael Gove MP, Secretary of State for the Department of Levelling Up, Housing and Communities, which is available to view here.
The letter is addressed to The Property Institute and also the British Property Federation, reminding our memberships that some provisions of the Building Safety Act come into force from tomorrow 28th June. Specifically, that “landlords will be financially liable, in law, for the remediation of historical building safety defects”.
Mr Gove writes “The law as it previously stood allowed your members to charge all leaseholders for the full cost of all necessary remediation work. That has led to a situation where managing agents and freeholders are sending people invoices for hundreds of thousands of pounds that would bankrupt families and leave leaseholders facing financial ruin. Those days are now over, and the Act means qualifying leaseholders can thankfully dispose of these invoices.”
The letter continues “I am concerned by some reports that agents are attempting to continue to send invoices to leaseholders that would violate the Building Safety Act protections, which will apply retrospectively. It is important to be clear – from tomorrow, anyone who chooses to breach the statutory protections will be committing a criminal offence. Individuals involved in such criminal activity could face up to 10 years in prison, in addition to the consequences for their companies. Criminal exploitation of leaseholders will be treated as a matter of the utmost seriousness.”
The rest of the letter, copied to the Home Secretary, National Police Chiefs’ Council, the new Building Safety Regulator at HSE and the Local Government Association is a resume of measures to get buildings fixed.
TPI says: the Building Safety Act does not prevent freeholders, RMCs, RTM companies or managing agents from issuing some invoices for building safety measures. Some charges can still be recovered from 28th June 2022 following the coming into force of the Act (as ever, only where permitted by the terms of the lease); the provisions are complex and detailed. However, the focus of this letter leans towards the costs of fixing bad buildings and other related costs where buildings require some form of remediation. Every building has its own set of circumstances and at this early stage, we caution agents to be very careful that any charges to leaseholders are permitted under the new legislation. You should bear in mind that not all leaseholders enjoy the protection of the Act and the ability to levy charges depends on a wide range of factors including the nature and status of the landlord / freeholder, the nature of the work the demand relates to, and the amount of charges levied in respect of relevant building safety measures in previous years. If there is any doubt, you and or your clients should take legal advice where necessary to confirm you / they are acting in accordance with the law.
The letter has been published by Government and leaseholders will have visibility over it. Understandably, the letter may cause leaseholders to contact building managers regarding invoices received, leading to an increase in enquiries. We will be responding to Mr Gove on a number of concerns raised in his letter.
Andrew Bulmer, FRICS, FIRPM
CEO, The Property Institute (TPI)
Click here to view the letter in full
