Do you need advice on the funding process and/or the agreement to be entered into?
As we previously highlighted in our article in May 2019 (https://www.jpclaw.co.uk/latest/great-news-on-cladding) the government had previously allocated a fund of around £200 million, as its estimate of the cost of fully funding the removal of unsafe aluminium composite material (ACM) type cladding on private sector residential blocks.
This week saw this fund rise to £1billion.
The fund is available for the benefit of leaseholders in residential buildings of over 18 metres in height, where leaseholders would otherwise have had to pay the costs associated with the removal and replacement of unsafe ACM cladding systems.
THE FUND DOES NOT COVER:
- other onerous fire safety costs, such as 24-hour “waking watch” patrols, which can cost thousands per year, or other structural fire safety defects not related to cladding.
- non-residential buildings, although mixed use residential and commercial will be eligible.
- Buildings, where a warranty claim for the full cost of dealing with the unsafe cladding has been accepted.
APPLYING FOR THE FUNDING – DEADLINES
An application for funding must be made by whoever has legal responsibility for the repair, condition and safety of the building, and which has a legal right to recover the cost through the service charge. This will usually be the freeholder, but could also include a head landlord, or a management company or even the right to manage company.
Building owners, freeholders, and other responsible organisations have between 1 June and 31 July 2020 to register if they cannot cover costs themselves, the Ministry of Housing, Communities and Local Government (MHCLG) has said.
STATE AID DECLARATION FORM – LEASEHOLDERS OBLIGATIONS
This declaration form is required to be completed by all leaseholders in the building. If there are joint leaseholders on the lease, each should complete a separate declaration.
Before funding can be granted, the MHCLG requires that all declarations regarding state aid are completed.
The applicant for funding is responsible for distributing these forms to and collecting these forms from leaseholders and submitting them on their behalf.
AGREEMENT AND PAYMENTS
The fund monies are paid to the applicant for the benefit of the leaseholders, who would otherwise be paying for works via the service charge.
Payment of monies will be in stages and be monitored by MHCLG to ensure correct use of public funds.
Before the funds are sent, MHCLG will require the building owners, freeholder or other party responsible for management of the building to enter into a complicated agreement setting out the terms upon which the funds are being released.
The team at JPC have assisted freeholders, leaseholders and management companies with the application process as well as providing advice on the terms and form of agreement that will be required to be entered into with MHCLG.
The agreement is complicated and contains may warranties and guarantees and advice should first be sought before entering into any such agreement.
If you need help or advice on the terms of the agreement, please do contact Andrew Morgan, email: firstname.lastname@example.org or Tel: 0207 644 6303 or connect with him on LinkedIn or Yashmin Mistry, email: email@example.com or Tel: 0207 644 7294 of connect with her on LinkedIn.