The Government first announced plans for a shared ownership right to buy in October 2019. At the time the sector raised concerns about the impact the plans would have on housing associations ability to borrow. An election and a pandemic later the Government announced, during the CIH Housing Festival last week, the return of the right to shared ownership as part of its Affordable Homes Programme (AHP).
The largely unexpected fire-safety risks identified following the Grenfell Tower disaster have exerted significant pressure on social housing budgets.
Providers now face an increasing list of fire-safety issues, as investigations into further products and systems continue.
Put simply, the need for innovative support to address these issues has never been greater.
Poor fire compartmentation, defective sprinkler systems, faulty fire doors, use of combustible material in balconies and risks around cladding materials (both Aluminium Composite Material (ACM) and High-Pressure Laminates); these represent a number of key issues.
A sector-wide concern is how to balance safety with financial stability?
The G15 group of social housing providers already estimate costs of up to £6.87bn to make their buildings fire safe.
The Ministry of Housing, Communities and Local Government provided £400m to help eligible registered providers replace ACM cladding, but no funding has yet been made available for addressing wider fire-safety issues.
There are, however, strategies available for providers wishing to avoid lengthy litigation processes and instead focus on the delivery of remedial works, prioritising resident safety.
Contractors frequently deny responsibility for fire-safety defects, stalling remedial works.
To address this, providers can adopt a ‘piecemeal’ approach by adjudicating only the question of liability.
Adjudication takes about four to six weeks to complete, rather than the extended timetable for litigation, which can take up to 18 months to reach trial – allowing providers to avoid incurring heavy legal costs.
If the contractor is found liable by the adjudicator, housing providers have a strong negotiating position from which to secure the delivery of a remedial solution by the original contractor.
This is likely to be more cost-effective than paying the costs of engaging an alternative contractor.
Another strategy available to providers is the ‘work-now-argue-later’ approach.
In this strategy, the housing provider and original contractor enter into a binding contract for the delivery of remedial works, at no initial cost to the housing provider.
The question of liability and which party bears the costs is then resolved at the end, either by agreement or through adjudication.
As well as prioritising resident safety, this approach allows both parties to agree the cost of the remedial works at the outset, providing cost certainty.
This is in sharp contrast to many defects claims, where an alternative contractor is appointed to carry out remedial works while the provider attempts to recoup costs from the original contractor.
While less common, in practice, the ‘work-now-argue-later’ approach means that a remedial solution can commence swiftly and both parties can accurately forecast and pre-empt the financial implications of being found liable.
These two strategies can help to reduce the legal costs of pursuing a claim and any delays in implementing a remedial scheme – outcomes that fundamentally benefit social housing providers and their residents.
For more information
Please contact Kieran Binnie.
Two final pieces of the possession jigsaw have been published on 15 September 2020. Mr Justice Knowles’ working group on possession proceedings has issued its guidance on the “overall arrangements” for possession proceedings.
One change proposed by the Building Safety Bill is the introduction of a duty holder regime, which will see statutory responsibility for the safety of higher risk buildings placed on key individuals
Throughout this pandemic, the Competition and Markets Authority (CMA) has been publishing various “Statements on Coronavirus” (Statements) which provide guidance on consumer rights during this time.
A recent increase in COVID-19 cases in the UK means new measures are being put in place in an effort to reduce the risk of a second wave. Whilst the impact of COVID-19 continues to be felt, it is important to remain focused on the sector’s road to recovery.
Sometimes half an hour at a conference gives you the reality that has been staring you in the face all along. That was my experience watching “Change is on the Horizon”
Following our recent e-briefing on Possession Notices, Helen Tucker and Emilie Pownall from our housing litigation team discuss the impact of the changes on social landlords.
Not only has the possession stay been extended until 20 September, the notice periods to be given to tenants has been extended in certain circumstances with some important exceptions.
The Court has confirmed that a party cannot withhold its consent in order to re-write the original bargain.
Following the Grenfell Tower tragedy, building safety continues to be a key concern for social housing providers and their residents.
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