Building Safety (Leaseholder Protections) (England) (Amendment) Regulations 2023

Baroness Scott of Bybrook Excerpts

Tuesday 21st March 2023 Lords Chamber

One reason I particularly wanted to draw attention to this is that there have unfortunately been numerous SIs from Defra over the past couple of years where there have been errors that have needed to be corrected, which has meant that the SIs have then come back to us. This is not an isolated incident across government. Apart from the problems and difficulties that a faulty piece of legislation can cause, the Government keep saying that they are short of parliamentary time. If they got the legislation right in the first place, perhaps we could all work better and more efficiently.

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)]

My Lords, I thank the noble Baroness, Lady Pinnock, for securing this important debate to discuss the Building Safety (Leasehold Protections) (England) (Amendment) Regulations 2023. I also pay tribute to the Secondary Legislation Scrutiny Committee for its careful consideration of the regulations and to the right reverend Prelate and other noble Lords who have contributed to this discussion.

As noble Lords will know, the regulations correct an error in a previous instrument to ensure that, when assessing liability for the costs of remediating relevant defects, the consideration of the net worth of a landlord group for the purpose of the contribution condition includes parent and sister companies, as originally intended.

The department does not collect data on leaseholders who are liable to pay for the remediation of historical safety defects, not least because it is not a centralised process. We have, however, been made aware by leaseholders and, indeed, parliamentarians, of a very small number of cases where landlords state that they did not believe they met the contribution condition because of this unfortunate and unintended error. As I say, to date these cases are small in number, but of course we must say sorry to those people, because it will affect them, however few they are.

Due to the caps for qualifying leaseholders in relation to non-cladding remediation and interim measures, the maximum amount such qualifying leaseholders could have been charged is limited to £1,000—or £1,500 in Greater London—over the past year. Landlords are already required to produce a new landlord certificate which complies with these regulations in specified circumstances, including within four weeks of becoming aware of a relevant defect not covered by a previous certificate.

I wanted to make sure your Lordships were aware that the Building Safety Act already includes anti-avoidance and enforcement provisions to ensure that those who are liable to pay do so, and, where it is just and equitable, that costs incurred for historical safety remediation may be recovered. Remediation contribution orders allow interested persons—including local authorities, fire and rescue services and leaseholders—to apply to the First-tier Tribunal, as we heard, for an order requiring a landlord, developer or associated company to make payments in connection with remediation costs. Applications to the First-tier Tribunal for a remediation contribution order cost £100.

The department is clear that any opportunities to avoid the protections needed to be closed off swiftly, and that is what these regulations have done. Although it may be possible to give retrospective provision in law—as the protections in the Building Safety Act do—there is a general presumption not to apply new law retrospectively, and the department does not believe it would be proportionate to do so in this case. The Government therefore have no plans to introduce retrospective provision through primary legislation.

The department has published extensive guidance on the GOV.UK website to explain the leaseholder protections, including information relating to remediation contribution orders. Those affected who write to the department—and I encourage any noble Lord who knows of anyone who is worried about this to tell them to come to the department—will be informed of their options and directed to the guidance to help them to make an informed decision. Of course, each case is different, and leaseholders may wish to consider seeking legal advice before pursuing avenues of recompense.

LEASE—the leasehold advisory service—is providing free support and guidance to leaseholders who face costs for historic safety defects, and officials in my department continue to look at new ways to raise awareness of the leaseholder protection provisions to all leaseholders. These regulations are being issued free of charge to all known recipients of the 2022 regulations, and I put on record my assurance that the department will update GOV.UK guidance to further raise awareness of available redress options, with notifications sent to those who have signed up for them.

The circumstances surrounding the leaseholder protection legislation introduced last summer—particularly the speed of its preparation—were highly unusual, but necessary to ensure that leaseholders were afforded the financial protections under the Building Safety Act without delay. As my honourable friend the Building Safety Minister, Lee Rowley MP, said in his letter to the committee, we are confident that we can rely on the department’s processes that have long been in place, but which were abbreviated last summer, to ensure that, as far as possible, such mistakes will be avoided in the future.

I should like to deal with a couple of further questions. The noble Baroness, Lady Pinnock, referred several times to developers and their related companies. I point out that these regulations refer to landlords; that is, building owners. The mistake has no effect on the liability on developers.

I have answered the right reverend Prelate the Bishop of St Albans, in that we think that this is a very small number. Of course, if anybody knows of any such person, we will give them the support they might need to ensure they get the redress they should have. I hope I have answered all your Lordships’ questions. As ever, I will happily follow up in writing on anything I have not covered, and I am very happy to meet with any noble Lords to discuss this issue further.

I thank the noble Baroness, Lady Pinnock, for bringing forward the debate today. We can all agree that qualifying leaseholders should be protected from the costs of historical safety remediation. This legislation is important in ensuring that landlords’ groups that meet the contribution condition must meet the full costs of both non-cladding remediation and interim measures. On that basis, I ask the noble Baroness to withdraw her Motion.

[Baroness Pinnock (LD)]

My Lords, I thank the right reverend Prelate the Bishop of St Albans, and the noble Baroness, Lady Hayman of Ullock, for their support.

The right reverend Prelate has been at the heart of this issue for the six years since the awful Grenfell tragedy; he knows first hand, as he said, the devastating impact it has had on leaseholders. Perhaps I am wrong in saying this, but it was almost the last straw, in that all of us across the House had tried so hard to get the Building Safety Act to provide legislative ways of delivering remedies for leaseholders, and at that moment when everything should have been put right as far as possible—there are omissions that I still intend to pursue—an error crept in. Even then, where things were put right, innocent leaseholders were at the mercy of landlords who wanted to pass on the costs to them. The Minister has said that it is a small number but actually, we have no idea whether it is small or large, and the Government should find out.

I am grateful to the Minister for apologising for the error on behalf of the Government. I accept that it crept in inadvertently, but apologies do not pay bills. Leaseholders have had enormous bills of up to £10,000 from the cascade cap, which they would be required to pay. I am disappointed with the Minister’s response, both to my regret Motion—

[Baroness Scott of Bybrook (Con)]

The £10,000 would have been over 10 years, and we have stopped it at the end of the first year, so the maximum that would have been required was £1,000. I just wanted to clarify that. I would not want it to be £10,000.

[Baroness Pinnock (LD)]

I thank the Minister for pointing that out. I will see what the legislation says.

I am very disappointed with her response and the response to the request by the Secondary Legislation Scrutiny Committee, which also made a very strong statement that the Government ought to find out how many leaseholders were affected and provide them with information and support. This is a government error, albeit one made inadvertently. The Government ought to be leading the way in showing that if errors are made, efforts are made to put them right. Currently, no efforts are being made to put this right. Therefore, I want to underline my considerable concern that the Government are not intending to take any action, and I would like to test the opinion of the House.