Premier House, Edgware fire safety update
17 December 2021 update
There has been no further progress and updates are awaited from the managing agent.
30 September 2021 update
As previously advised, there are 3 leaseholders who do not qualify for the Government's Private Sector ACM Remediation Fund leading to a shortfall in funding of approximately £1m. There is usually a requirement for Section 20 notices to be served on leaseholders where the service charge contribution from a leaseholder exceeds £250. The freeholder made an application to the First-Tier Tribunal (the "FTT") to allow dispensation from the Section 20 Consultation requirements to minimise further delays in works commencing. The FTT has confirmed that the Section 20 procedure will not need to be followed for the 3 leaseholders.
The next step is for the freeholder to apply to the FTT to determine that the costs are reasonable and payable by the 3 leaseholders. This has been submitted to the FTT and a decision is awaited.
Once the decision has been received, the freeholder can progress with legal action to obtain the shortfall of funds from the 3 leaseholders. The cladding works cannot, therefore, commence until the situation with the 3 leaseholders has been resolved.
The planning permission application still remains to be determined with the freeholder having been requested to submit several additional reports and drawings to support their application.
30 June 2021 update
We had previously advised that the freeholder had applied for planning permission to include the addition of extra floors to the building and a shared roof garden in an attempt to cover the £1 million shortfall in funding for the cost of replacement cladding at Premier House. The date for determination of the planning permission was 31 March 2021 however the application is still pending consideration. ACM cladding replacement works will not commence until a solution is in place in relation to the £1 million funding shortfall.
31 March 2021 update
We had previously advised that the freeholder had applied for planning permission to include the addition of extra floors to the building and a shared roof garden in an attempt to cover the £1 million shortfall in funding for the cost of replacement cladding at Premier House. The date for determination of the planning permission is on or around 31 March 2021.
There are no new updates – leaseholders still await commencement of the cladding replacement works. The start date for the works has not yet been confirmed.
As mentioned in our last update, the Government has confirmed they will be contributing towards the cladding replacement works required at the building however exploratory works are first required to ascertain final designs and costings involved – all of which need to be submitted to the Greater London Authority. The managing agents have stated they anticipate the relevant details will be submitted before the end of the year and are hopeful the cladding replacement works will commence early next year.
31 July 2020 update
The managing agents have received confirmation of support from the Government in the region of £160,000. Exploratory works are required before full works to replace the cladding may commence, however the exploratory works have been delayed due to lockdown measures and a revised start date is awaited. It has been confirmed that the cladding will be replaced by a compliant aluminium rainscreen system with an identical finish to the existing paneling in place.
Whilst works were scheduled to commence to replace the ACM cladding at the block at the end of March 2020, these have been delayed due to the current circumstances regarding Covid-19. The managing agents have confirmed they expect works to commence soon after restrictions have been lifted.
23 January 2020 update
We are pleased to report that we have been advised by the freeholder's managing agent that they have received confirmation of eligibility for the Government's Private Sector ACM Remediation Fund to cover the full cost of replacement of the cladding at Premier House, including professional fees and the costs of scaffolding – this is stage one. Stage two will evaluate the proposed solution and costs, and once approved, works can commence. The landlord anticipates that the works will commence in late March 2020. At that point, we hope to be able to confirm a target completion date for the works.
The new cladding system selected will conform to the latest fire safety and insulation standards for buildings that are more than 18m in height and will be approved by the Government prior to fitting. It will also have a very similar exterior appearance to the existing cladding.
This information will be taken into account by the independent surveyor who will be revaluing the property in March, the result of which will be published as part of our quarterly update on 6 April 2020.
In light of this price sensitive development, trading will be suspended on the property until10am on Tuesday, 28 January 2020 and all bids and offers will be cancelled. The dividend will remain suspended in respect of continuing extraordinary service charge costs to pay for fire marshalls, who are required to remain on site until the works have been completed
6 January 2020 update
Further to our last update, the managing agents have confirmed that they have received the required declarations from all leaseholders and in November made a collective application to the Private Sector ACM Cladding remediation fund launched by the Government.
We now await confirmation of approval of the application to the fund and the sums to be awarded towards replacing the cladding if this application is successful.
We have received no further updates regarding the building warranty claims or claims against the various third parties who were involved in the original conversion of Premier House and the installation of the defective cladding.
7 October 2019 update
As indicated in the last update, the leaseholders were collectively trying to make an application to the Private Sector ACM Cladding remediation fund launched by the Government. Details of the fund have now been released confirming that applications to the fund may be submitted until December 2019.
In doing so, every single leaseholder of the building is required to submit a declaration confirming they have not received any state aid. Currently, nearly 70% of leaseholders have submitted their declarations and the managing agents are chasing the outstanding declarations so that the claim to the fund may be submitted before the deadline.
The leaseholders had asked the Tribunal to determine whether the freeholder could rightly recover their legal costs through the service charge. As per previous updates, the freeholder had been trying to seek confirmation from the Tribunal that the freeholder undertaking certain works (upgrading the fire alarm, etc.) without first consulting the leaseholders was plausible (as per the previous update, the Tribunal disallowed the passing on of £50,000 of the £450,000 costs incurred by the freeholder in undertaking works). The Tribunal determined that the small element of legal costs incurred by the freeholder in this respect was not recoverable through the service charge.
However, the Tribunal stated that the freeholder could still claim, through the service charge, the balance of their legal costs which to date are estimated to be in the region of £60k.
We have received no further updates regarding the CRL claims or claims against the various third parties who were involved in the original conversion of Premier House and the installation of the defective cladding.
5 July 2019 update
At the time of the last update, the Leasehold Valuation Tribunal proceedings were scheduled to commence in April in order to determine whether the freeholder's claim to pass on the cost of the remedial works, totalling approximately £450,000, to leaseholders via the service charge is fair. The outcome of the proceedings is to disallow the passing on of £50,000 of the costs to leaseholders. A copy of the Tribunal's decision is available here.
Subsequent to this decision, the Tribunal has invited the leaseholders' group to make submissions to determine whether the freeholder's ability to recover his legal costs through the service charge can be limited, thus further reducing the costs that fall to leaseholders. The leaseholders' group has been advised there is a good chance of success, and has therefore instructed lawyers to proceed with preparation of the submissions.
As explained in our last update, we withdrew from the leaseholders' group earlier this year and terminated our financial contributions to their 'fighting fund'. However, as a leaseholder, the SPV would still benefit if these claims are successful. The second claim, against CRL (the building warranty providers), to cover the cost of the replacement cladding and certain elements of the remedial measures, is progressing. The freeholder has responded saying he is prepared to meet with the lawyers and the developer to discuss the possibility of an overall resolution. As outlined in our previous update, since settlement is being sought out of court, it is difficult to know when this matter will be concluded.
On 9 May the Government announced that a fund of £200 million will be made available to building owners who have not yet replaced unsafe ACM cladding on privately owned high rise blocks.
The leaseholders' group believes there is a good chance of Premier House benefiting from these funds, and the freeholder has confirmed he will be making an application to the fund. The leaseholders' group aims to maintain dialogue with the freeholder and the developer to ensure that any shortfall in the cost of replacing the cladding does not fall on leaseholders.
We understand that anyone wishing to access the Government's fund will have a duty to mitigate the cost by claiming from third parties where possible. We hope this will place further pressure on the freeholder to assist in pursuing the claims against CRL and any other third parties. Despite this, there is still very little detail on how the Government's scheme will operate and if Premier House is eligible to benefit from it. We expect more details to be made available in the coming months
9 May 2019 update
The Government made an announcement earlier this morning confirming that a fund of £200 million will be made available to building owners who have not yet replaced unsafe ACM cladding on privately owned high rise blocks. This step has been taken as a result of private building owners having failed to take action to replace ACM cladding and their attempt to
offload any costs associated with cladding replacement to leaseholders.
You can read the press release on the Government website here.
The announcement contains few details and raises many questions. For example, a condition of funding would be that the building owner must have taken reasonable steps to recover the costs from those responsible for the presence of unsafe cladding. What would be considered as having taken reasonable steps? Who is responsible for the presence of unsafe cladding?
Building owners will have three months to access the fund, however, they will not be able to register for the fund until early July 2019. It is assumed that further details as to claiming eligibility for the fund will be released between now and July.
How does this announcement affect Premier House?
It seems that this may be positive news for Premier House, subject to confirmation of eligibility. Premier House has the same ACM cladding which was found on Grenfell Tower and therefore, at the outset, it would seem the block would fall directly within the remit of the fund.
5 April 2019 update: click here.
At the time of our last report on 27 September 2018, the freeholder had submitted applications to the First Tier Tribunal for determination of a number of matters, including the costs of the intermediate fire safety provisions and the removal of the consultation process as required under the Section 20 of the Landlord and Tenant Act 1985. The Tribunal has now requested confirmation of availability of the relevant parties for a hearing and will set a date accordingly. We expect the hearing date to be before
the end of March 2019. In the meantime, solicitors are reviewing the documents that have been provided to them by the leaseholders' group, of which we are a part, and which is opposing the freeholder's application to the Tribunal. They will seek advice from experts on the following:
• the testing of the cladding currently on the building to determine whether it was compliant with the guidance and regulations that applied prior to the recent revisions to the regulations as a result of the Grenfell Tower fire
• whether the remedial measures and related actions taken by the freeholder in response to the Fire Brigade's directions issued after the Grenfell Tower fire were appropriate
• whether the amount spent by the freeholder on the remedial measures and related actions were reasonable and not excessive
We expect an expert to be appointed to advise on the above matters before the end of March 2019.
The freeholder has submitted applications to the First Tier Tribunal for determination of the following matters:
• That the costs of provision of fire marshals, fire compartmentalisation works, and fire alarm works are payable by the leaseholders of the building
• To remove the need for the consultation process in relation to the above costs as set out under Section 20 of the Landlord and Tenant Act 1985. Section 20 states that a freeholder must notify leaseholders of the intention to carry out works, provide estimates for the works and confirmation of the contractor he/she intends to proceed with. The freeholder had previously stated that a formal consultation of leaseholders was not required because of the need to act urgently in the interest of safety to reduce ongoing costs and to avoid the need for the building to be evacuated due to the fire risks which were present.
The Tribunal has received the relevant information for consideration and will issue further directions in the near future. Unfortunately, we have been given no estimation as to how long this could take.
We have not received any confirmation as to when the cladding will be replaced, however, we have been advised that the freeholder will most likely wait for the Tribunal's directions concerning the above matters before proceeding with the required replacement works.
As outlined in a previous update, we have joined a leaseholders' group. The group is opposing the freeholder's application to the Tribunal as the costs for carrying out the work are being questioned.
The freeholder has put on hold plans to replace the existing cladding until there is greater clarity provided by the ongoing Grenfell Tower Public Enquiry as to the type of cladding which will be an acceptable replacement.
This means that the presence and costs of a 24/7 concierge at the block will continue.
As outlined in the previous update, there is due to be a Tribunal hearing to determine who is liable for the additional costs which have become payable as a result of the cladding issues. However, a date has yet to be confirmed
As referred to in our previous note, a claim was lodged for each flat with CRL, who provided the building warranties for each of the flats. Unfortunately, the claim was rejected as the warranties were issued by CRL on the basis that the building had received buildings regulations sign off and a building regulations certificate had been issued.
The national debate as to whether the cost of replacement cladding works required at privately owned highrise buildings should be borne by leaseholders or freeholders, has not concluded.
We continue to work with the residents group at Premier House who have instructed a reputable firm of lawyers to advise on our best course of action.
At this point, a number of cases have been taken to court in relation to other high-rise buildings, in an attempt to determine who should bear the costs of replacing the cladding. The residents group has deemed it appropriate to wait until some of these cases have concluded to review the situation once the outcome is clear (bearing in mind that cases may go to appeal). This will take some time, however the cost involved in
taking our case to court would be much greater. To try and mitigate costs that have to be borne by the SPV, we agree that it is more prudent to await the outcome of other similar court cases.
In the meantime, the residents group has requested more detailed information and the specification of the proposed replacement cladding. This information is still awaited from the freeholder. We will continue to play an active role in the residents group to try to bring the matter to a satisfactory conclusion.
For the time being, both dividends and trading on the property will remain suspended.
7 June 2018 update: click here.
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