Building Safety Bill

Lord Naseby Excerpts

Committee stage
Monday 28th February 2022 Grand Committee

There is nothing there about cladding and non-cladding, but I distinctively heard my noble friend, when he rattled through his opening speech, use the words “non-cladding”. I just wonder where in the amendments that distinction appears. I am sure it is there somewhere, but for the life of me I have not been able to find it. As I said, there was a lot in my noble friend the Minister’s speech that I want to look at and digest. In the meantime, I beg to move Amendment 56.

[Lord Naseby (Con)]

My Lords, I shall speak to my Amendment 65, which would modify the major statement in government Amendment 64. I was greatly encouraged when my noble friend the Minister sent the letter on 14 February. I thought, “Ah, here’s a good letter”, because it says clearly:

“The key principles that I outlined were a more proportionate approach to building safety risk”,


and

“the need to protect leaseholders”.

That is in the first paragraph. The second paragraph even starts:

“I committed to protect leaseholders”.


So I thought, “Oh, good, we’ve got there now”. But then, of course, I looked at the letter in more detail—and what is proposed in new subsection (2)(d) proposed by government Amendment 64 will have a major adverse effect on buy to let.

I remind my noble friend, who has been in housing for many years, as I have—I first got elected to the London Borough of Islington in 1968—that it was in 1993, under the Major Government, that the whole concept of buy to let was produced. That was at a time when, as all of us who were involved in housing would have known, there was a terrible situation for private tenants. They were basically exploited. We remember Rachman, De Lusignan and the others at that time. Here, it was not launched with trumpets or anything; nevertheless, it started in 1993 and it built up, because it offered good-quality housing for people to rent in the private sector. We now have a situation today, which I find really amazing, having done a bit of donkey work on this, where there are more than 2 million buy-to-let properties that are mortgaged and successful.

I will not take much of the Committee’s time, but I will just highlight that over the past 25 years, landlords have made a tangible improvement to the whole rented sector, so now we have a situation where millions of tenants today are proud of their home, although they have it on a buy-to-let basis. That is all fine and dandy, except that when you look at what is actually proposed at the moment, the net result is that, basically, buy-to-let landlords, or some of them, will not qualify for the remit of the cladding scheme that was announced in January. If they rent out no more than one flat in a block, they are okay, but if they have any more, they are in trouble. I have had strong representations, of course, from the National Residential Landlords Association, which states:

“We still fail to see why the Government is making it so difficult for buy-to-let landlords who are leaseholders to access the same level of support as all other types of leaseholders.”


The reality is, if you are a buy-to-let landlord renting out however many flats, or an owner-occupier leaseholder, you have been treated unfairly by the developers that installed dangerous cladding on blocks of flats. What Her Majesty’s Government are doing, as matters stand in Amendment 64, is introducing a very dangerous principle, basically stating that there are worthy and unworthy victims of the cladding crisis. I ask my noble friend to reflect that the Government should make it clear that any and all leaseholders should be treated the same. That is why I have tabled this amendment. I have not sought any publicity on this at all, but people have read the Bill, thankfully, and I have just brought a small sample of the huge number of emails I have received. Each is an indication of a case. The first is from a retired solicitor—so this is a perfect gentleman—who had a flat on buy to let. His wife bought one as well, and they now have two flats and are facing a problem. He says it is vital that all leaseholders are treated equally, and I do not think I can disagree with that.

Another one comes from a lady who was affected. She had a one-bedroom flat, which she bought in St Albans when her mother died, and then they bought one more, yet they are caught again. Then there is one from a lady called Katherine Wilde in Croydon. A single-parent family, two sisters, bought a flat jointly, then another flat jointly, then another flat jointly. They are caught. I could go on, although I have not brought many. It is clear. This is from a gentleman called Paul Bullock. It is clear that all these people are victims of this national scandal. As further evidence from the Grenfell inquiry comes to light, it is obvious that many parties have played a role in creating this crisis, the only innocent party being the leaseholders who purchased the flats after being guaranteed that everything was in order, only to find out that this was not true. There are moving words at the end of this email:

“Personally, I am caught up in this mess. I can’t even start to explain the toll of the past two years on my physical and mental health”.


I will not read the rest, but I will say to my noble friend that there is a problem here and I hope that he will have another look at it. I think that when he was introducing the letter of 14 February, he said that some of it had been done in a bit of a rush—so I think there ought to be an opportunity to have another look at this issue.

[Lord Blencathra (Con)]

My Lords, my Amendment 59 is concerned with the first two lines of paragraph 5 of Schedule 8, which begins:

“Building safety costs may be taken into account in determining the … building safety charge payable by a relevant tenant”.


You can bet your life they will be. Leaseholders know that every other week a notice comes from the managing agents to say that the freeholder or landlord has decided that the corridor lighting needs updating, new lines need to be painted in the car park, the entry phone system needs replacing and so on, ad nauseam. This schedule gives them another excuse for possibly unnecessary, gold-plated, so-called safety improvements and contracts let to their favourite contractors. That is why my amendment seeks to add these words at the end of the sentence I have just quoted:

“only if they are below a maximum as specified in regulations made by the Secretary of State”.

It is another plea for the Government to take a permissive power so that, if it proves to be the case that service or safety charges have been jacked up, they can use a regulation to put a control on it.

These regulations may not be necessary—I hope they are not—but the power should be there just in case it is needed. If your Lordships just google “leasehold scandals”, up will pop names such as McCarthy & Stone and Peverel, now calling itself FirstPort—I can assure your Lordships that Mr Tchenguiz has not made his millions by being nice to leaseholders.

My Amendment 66A adds to the definition of “relevant defect” in new subsection (2) in Amendment 66. At the moment it says:

“‘Relevant defect’ means a defect as regards a building that … arises as a result of anything done (or not done), including anything used (or not used), in connection with relevant works, and … causes a building safety risk.”


I propose to add at the end:

“which may relate to but is not limited to … external cladding … internal walls and the materials contained inside any walls … fire doors … balconies … a lack of sprinklers, fire detection and control systems … inadequate escape routes.”

Quite simply, I believe that builders should pay for all fire safety remedial work and not just external cladding. But I also hope that common sense can prevail and the Government can lay down the law that wooden decking on a steel balcony is not a fire risk, and that potentially flammable materials sandwiched inside non-combustible inner and outer walls do not need to be removed. There are a lot of excessive suggestions on fire risk materials going round at the moment, and that needs to be stamped on.

My Amendment 86 seeks to insert a new clause to prevent managing agents charging excessive amounts for undertaking fire risk assessments or preparing applications for assistance. In particular, I suggest that the regulations may include—again I stress “may”:

“setting limits on the charges managing agents may impose for fire risk assessments … setting limits on the charges managing agents may impose for making applications to the Building Safety Fund or any other source of funding for fire risk remedial works … setting limits on the charges managing agents may impose for inviting tenders for fire risk remedial works … preventing service charges being inflated by fire risk remedial works.”

I suggest that these are all reasonable. My noble friend the Minister knows what managing agents are like. If we are not careful, this Bill will be a licence for them to print money: charging for the work of the accountable person and for drawing up the strategy, coming into all our homes to look for safety dangers, and a host of other things they will be able, quite legitimately, to charge leaseholders for. While they can do so, I suspect that the charges will be excessively high. Thus, the backstop of a regulatory power is essential.

I commend Amendment 131 from my noble friend Lord Young of Cookham. He made a compelling case for a short, sharp inquiry into the charges for fire safety work which leaseholders have had to pay and which are not covered by this Bill. That is eminently sensible stuff.