Residents at a building development in Paddington Walk have been left with huge costs and mental stress after they were billed at least £40,000 each to cover the costs of fire safety provisions and the replacement of unsafe, Grenfell-style ACM cladding. The building developer and freeholder of the site, European Land & Property Limited (ELPL), is the developer of the Merchant Square residential sites, jointly owned by European Land Holdings Ltd and Aldersgate. These companies are respectively controlled by the Jarvis and Reuben families — and in June 2020 the billionaire Reuben brothers made a major donation to the University of Oxford.
Residents of the Munkenbeck and Marshall Building (M&M), built in 2005, say that despite the Reuben brothers’ estimated £16 billion fortune, and despite their £80 million donation to the University of Oxford — which has named a College after them — their company has billed and intends to collect payment from tenants who live in dangerous homes sold as safe by European Land, rather than cover the costs themselves from the onset.
In September 2019, Mayor of London Sadiq Khan wrote a letter to the Secretary of State for Housing, Communities, and Local Government, stating that he was “very concerned by this behaviour.” Khan raised four issues in total:
- The company had billed leaseholders over £40,000 each and intends to collect payment from them despite the announcement of the Private Sector ACM Remediation Fund (PSCRF)
- The company had refused to start remediation work until full funds had been collected from leaseholders
- The company corresponded with residents in a threatening manner
- The company failed to confirm that leaseholders would be repaid in cash for remediation works covered by PSCRF funding.
The PSCRF package, announced in July 2019, is a £200 million fund that has been made available to remove and replace unsafe cladding from high-rise private residential buildings and will be provided to responsible entities who will be responsible for remediation. It was intended to benefit leaseholders so they would not have to cover these costs themselves. The Building Safety Fund announced in May of this year was to provide a further £1 billion towards remediating unsafe non-ACM cladding systems where building owners are unable to cover these costs.
Speaking to the Oxford Student, one resident of the Munkenbeck and Marshall Building said that despite applying for both the PSCRF and the BSF, only half of the total estimated cost (£20 million) of the remediation and interim safety measures has been approved, leaving £10 million to be taken from the buildings reserve fund, billed to leaseholders as extraordinary service charges. They had personally been charged over £54,000. In a letter sent to residents in July 2019, the lawyers representing the building’s management said they would continue to pursue costs through the service charge, stating that this was not “invalid or unreasonable”.
Before the announcement of the remediation funds, in 2018 the government had asserted that ‘private sector building owners’ and ‘private sector landlords’ should do the right thing: remove unsafe cladding quickly and do not recover the costs from leaseholders.
Professor Susan Bright of the Oxford Law Faculty, who started the ‘Housing After Grenfell’ blog, said that the issue is building owners do not yet have a legal requirement to cover these costs in some cases. “In order to establish liability there has to be a cause of action (the most likely is through the Defective Premises Act 1972), and the relevant limitation period must not have expired (as this is 6 years from completion, for many buildings this rules out any hope of a private law action).”
For leaseholders to establish liability, she continues, this “requires a lot of effort, commitment, up-front funding, risk, and emotional energy.”
However, developers such as Barratt at Citiscape, Bellway at New Festival Quarter, Taylor Wimpey at Glasgow Harbour and NHBC at New Capital Quay have already paid for remediation.
Speaking to the OxStu, UK Cladding Action Group (UKCAG) emphasised the moral duty of developers to cover remediation costs. “All of the flats in [unsafe] buildings were sold to unsuspecting home-buyers as safe… [they] did all the checks they could, and had a basic expectation that flats being sold by some of the biggest developers in the UK were safe.”