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Building owners face prison for hounding leaseholders with cladding bills

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Written by: Shekina Tuahene
27/06/2022
Building owners who continue to send leaseholders invoices for property remediation could face up to 10 years in prison, the government has warned.

In a letter to remind freeholders, building landlords and managing agents about a new law which comes into effect tomorrow, secretary of state for levelling up, Michael Gove, confirmed  landlords will be financially liable, in law, for the remediation of historical building safety defects.

He added that the ultimate owners of buildings “can no longer hide behind shell companies: they must take responsibility for the dangerous buildings they own”.

The law previously allowed the full costs of remediating residential blocks to be passed on to leaseholders. Gove said these expenses, which sometimes cost thousands of pounds, would “bankrupt families and leave leaseholders facing financial ruin”. 

He wrote: “Those days are now over, and the Act means qualifying leaseholders can thankfully dispose of these invoices.” 

The Act, under the Building Safety Bill, states that building owners must now draw on their own capital, the Building Safety Fund, or contributions from the industry levy to pay for construction to make residential blocks safe. 

Protections apply to leaseholders in buildings which are 11 metres, or five storeys, and taller. 

Gove said he was concerned that some agents were still sending invoices to leaseholders and warned that the protections of the Act would apply retrospectively. 

He added: “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.” 

Medium-rise fund 

Gove said “responsible” building owners will have already made plans ahead of the Act coming into law. He also said where a building owner’s developer has not pledged to fix properties, applications could be submitted to the Building Safety Fund which is due to reopen or they could apply for the medium-rise fund, which will be launched soon. 

“Relevant authorities have the power to compel responsible entities to fund and undertake this work. I hope that it will not be necessary to do so, but I must be clear that if I am not satisfied, I will act to protect leaseholders,” he added. 

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