New Homes: Developers, Housebuilders and Management Companies

Kate Green Excerpts

Wednesday 5th January 2022 Westminster Hall

[Kate Green (Stretford and Urmston) (Lab)]

A happy new year to you, Mr Betts, and to all colleagues.

I start by thanking the hon. Member for Wantage (David Johnston) for securing this debate. In my constituency, we desperately need new homes for young families to buy or rent, but I absolutely echo the comments made by colleagues this morning about the way in which the dice are stacked against homebuyers and, indeed, local authorities.

I recognise the progress over the past two or three years, with measures such as the introduction of the new homes ombudsman and the Building Safety Bill, which is going through Parliament. However, the Bill will be of limited use in my constituency, where few buildings are over 18 metres high, and where we are still waiting for cladding to be removed and replaced on some that are, as it should be. I will just take this opportunity to ask the Minister whether he can update us on assistance with the cost of replacing defective cladding on buildings that are less than 18 metres high. That is an issue in my constituency and, along with all the other problems that we have heard leaseholders are experiencing, it is a very live one.

Today I will talk about some of the issues that homebuyers in my constituency have experienced in relation to defects in their new homes, which is a problem that has been alluded to by other hon. Members. I have spoken before in the House about Aura Court in Old Trafford and the risks faced by residents from unsafe cladding, staircases and walkways, which led to the Greater Manchester Fire and Rescue Service placing a prohibition notice on the block. Two years on, many of the issues that I raised are unresolved. Meanwhile, a few yards away at another development in East Union Street, residents await the completion of a sprinkler system and remediation of several other defects. Both those developments were undertaken by the same developer, Mr Jason Alexander, through his network of companies. I have spoken about him before in the House, too. He is notorious in the north-west for substandard developments and a failure to rectify defects once residents have moved in. Similar issues have been experienced in Renton Road in my constituency, where the developer is Mr Selcuk Pinarbasi, whom I have also spoken about before.

Those homes have now been sold on to private buyers and, as was mentioned by my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders), the council has therefore been advised that it needs to take enforcement action not against the developer but against those homeowners—the very parties aggrieved by failures in the system. It seems that developers can repeatedly take advantage of a planning and building control regime that creates conflicts of interest; that gives precedence to the interests of builders and warranty companies over building quality and safety; and that leaves leaseholders and often, as my hon. Friend pointed out, the local authority powerless to act.

That will continue even after the changes made by the Building Safety Bill, which does not mandate people undertaking building work to do so in accordance with plans that have been either submitted to and approved by a local authority or issued with a plans certificate by an approved inspector. The Bill provides a power to make future regulations in that regard, but we have not yet had a commitment from Ministers to bringing those forward. I urge the Minister to do so, given the widespread support for such a measure in response to the Government’s consultation. Meanwhile, if a registered building control approver appointed by the developer wrongly approves, gives a plans certificate or issues an initial notice or a final certificate, the local authority is effectively locked out of enforcement action. I recognise that the Bill creates new compliance and stop notice powers for local authorities in some circumstances, but they are hedged about with limitations.

Company law could be a useful tool in acting against unscrupulous developers and repeat offenders, but it repeatedly falls short. For example, Mr Alexander again and again sets up a new company for each development, which he then either liquidates, strips of its assets or allows to be struck off for non-compliance with registration and other requirements, leaving buyers with no body against which to pursue further action. It is pleasing to note the Bill’s inclusion of tougher provisions so that when an offence is committed by a corporate body with the connivance of a director, that director will commit the offence. However, we also need a more energetic approach to company law.

I would be grateful if the Minister supported me by using his good offices to press Ministers in the Department for Business, Energy and Industrial Strategy, as I have been doing, for a less dilatory response from the companies registrar to enforcement action, and indeed for a toughening up of company law, which I am aware Ministers in BEIS are considering to ensure that those who breach the obligations that we rightly expect of directors cannot continue to behave in this way.

I very much echo the comments on managing agents. Residents of Eden Square in Urmston have been battling their management company, Residential Management Group, for years for essential work to be undertaken, and have faced what look like excessive costs when anything is actually done. They are not alone. The Minister may have seen the report in The Sunday Times on 5 December relating to the mismanagement and greed of that organisation. Meanwhile, Mr Jason Alexander retains control of the management company for East Union Street and is trying to regain control of the management company for Aura Court, despite his long track record of failing to act.

I support the concerns raised about the weakness of the regulatory regime in relation to developers and management agents. I very much hope that the Minister will work with colleagues in the House and in this debate on how we can continue to enhance and improve protections for homeowners.