Could commonhold solve the costs conundrum?

“Two years after Grenfell and this building is still covered in dangerous cladding.” This message was projected onto a tower block in Salford this week to draw attention to the second anniversary of the fire which tragically took the lives of 72 people and had devastating consequences for many others. Yesterday at a major property conference held in London, more than 750 block managers stood for a minute’s silence to remember the victims of the fire, who died two years ago today. Many others were directly impacted by the failings of the property industry and those who regulate it.

Two years to the day since Grenfell and the cladding scandal rumbles on

A fitting tribute to those who died would be for the government to say that all dangerous cladding has been replaced across the country. This is not the case. Removing and replacing Grenfell-style and other flammable cladding has been much too slow. The whole exercise has become tied up in knots as the industry tries to work out who should pay for the work. The government has finally come up with funding to help get the job done but the problem at the heart of the cladding scandal – for private blocks at least – is the leasehold system itself.

Owners of leasehold buildings are not legally responsible for paying to replace dangerous building products with a safe alternative. This falls into the category of repairs and maintenance, which leaseholders must pay for via the service charge. Many current owners have bought blocks from the original developer several years down the line. They weren’t involved in the original specification or the build. Institutional investors own large portfolios of residential blocks, many of which may have changed hands several times. Hence the endless arguments and delays that have dogged the sector post-Grenfell. Leaseholders may hold the moral high ground but they are still obliged to foot the bill. Some building owners have taken the decision to do the decent thing and pay up. Many are still fighting their corner.

But there may be a glimmer of hope on the horizon. The Law Commission is supporting the expansion of commonhold as an alternative to the antiquated and often unfair leasehold system. Adopting commonhold would mean developers selling flats outright rather than maintaining their interest in the building or selling it on. The residents form a commonhold company and all responsibility for operation and maintenance of their block is in their hands alone. No more division between owners and residents and total transparency around costs.

In tandem with the government’s plans for a new, enforceable building safety regime in residential blocks, this could make all the difference. It won’t help those who have had to resort to projecting slogans onto their blocks to raise awareness of their plight, but could it work for future flat owners? We will have to wait and see.