Post Grenfell – who might be required to take action and who might have to meet those costs?
Owners immediately assessed their buildings for presence of the type of cladding used on Grenfell and considered all the guidance being published in the immediate aftermath. Building owners also often put in place enhanced safety measures, such as fire marshals engaged specifically to ensure constant monitoring of their buildings (which has become known as “a waking watch”) until steps have been taken to replace the cladding. All in all this has been a complex and costly business.
Who then must take the necessary action in the first place?
In general terms, it is only the owner of the building or the entity with the rights/obligations to maintain the structure and common parts of the building who can take the necessary steps. Depending on any leasehold structure in place, that could mean the freeholder, head leaseholder or other leaseholder with the day-to-day obligations to keep the structure of the property in repair and maintained. In some cases there might also be a primary obligation on a management company or managing agent. For instance, where the original leases are tripartite leases the owner may be effectively passing down all of its liabilities for repairs to a management company.
The obligation to replace any dangerous cladding may be contained in various parts of the lease such as part of the repairing obligation, the obligation to make good any inherent defects and/or the obligation to comply with statutory guidelines.
However, the replacement of cladding in these circumstances may not automatically come under the repairing covenant unless it can be said that the cladding is in fact “out of repair”. That said, some cases have now been referred to the First-tier Tribunal (Property Chamber) for determination. The general theme of such cases is that the Tribunal is thus far being supportive of landowners recovering from tenants the costs of such remedial works. In one case the Tribunal held that the landlord’s obligations were greater than simply “to repair” the building. The words including “renewing or otherwise treating as necessary” and requiring “good and substantial repair order and condition” could require the landlord to replace the cladding. Similarly, the requirement of “rectifying or making good any inherent structural defects” was said to include the replacement of cladding.
Who might be asked to contribute to the cost of the works and any ancillary measures such as the waking watch etc.?
In a “standard” lease, the landlord may have the obligation to carry out the work but this is usually mirrored by the tenant’s obligation to pay for the work through the service charges. Sometimes the obligations are not mirrored exactly. The service charge might be used to pay for ongoing maintenance/repairs but not necessarily the making good of an inherent defect. The lease terms and service charge provisions need to be considered carefully in each case.
Alternatively, the owner might have recourse to its insurers and/or (depending on the age of the building) its professional team if they were negligent in the design or construction of the building. Other potential claims might include claims against the local authority if there were errors in the certification process and/or against the DCLG if the relevant building regulations were not fit for purpose. It must be said though that these other claims are likely to be fairly speculative at this stage.
These are the contractual claims that an owner might have in order to recoup some of its costs/expenses. However, if it fails to carry out the work in the first instance, it might be facing significant claims from both its own tenants under any leases and/or in tort/negligence if it is found not to have discharged its duty of care to the occupiers of the building.
In the circumstances, and given the potentially horrific consequences which might arise in a worst case scenario, many owners/landlords have simply made the necessary alterations immediately to ensure that they meet their duty of care to occupiers and then considered what claims they might have to try to recoup their costs/expenses in due course.
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