UK housing secretary Michael Gove has warned landlords and managing agents not honouring their cladding obligations to leaseholders could face up to a decade behind bars.
This week (June 28), five years on from the Grenfell tragedy, the Building Safety Act came into force to allow some - but not all - leaseholders facing cladding bills totalling hundreds of thousands of pounds to rip up these invoices.
Instead, landlords will now be financially liable, in law, for the remediation of historical building safety defects.
In a letter to The Property Institute and British Property Foundation earlier this week (June 27) , Gove warned those managing agents and landlords still exploiting leaseholders could be hit with a prison sentence.
Moreover, ultimate building owners will no longer be able to “hide behind” shell companies to avoid the cost of replacing unsafe cladding and "must take responsibility for the dangerous buildings they own", he wrote.
“Anyone who chooses to breach the statutory protections will be committing a criminal offence,” the secretary of state for Levelling Up, Housing and Communities said.
“Individuals involved in such criminal activity could face up to 10 years in prison, in addition to the consequences for their companies.
“Criminal exploitation of leaseholders will be treated as a matter of the utmost seriousness.”
Gove copied his letter to the home secretary, the chair of the National Police Chiefs’ Council, the Chief Inspector of Buildings, and the Metropolitan Police Commissioner.
He said he was “concerned” by some reports that agents have been attempting to continue sending invoices to leaseholders which would violate the Building Safety Act protections.
“I must be clear that if I am not satisfied, I will act to protect leaseholders,” said Gove.
“Not only am I prepared to exercise my new legal powers under the act, but my new Recovery Strategy Unit will also identify and pursue this kind of behaviour, working closely with other enforcement authorities.
“Any such action would undoubtedly, and rightly, harm the reputations of those we need to pursue.”
Leaseholders protected from the costs associated with the remediation of unsafe cladding by the new laws are those living in their own homes, or those with up to three UK properties in total.
Campaigners such as Polluter Pays have estimated the UK bill for unsafe cladding is anywhere upwards of £10bn to £15bn.
Gove wrote to developers earlier this year asking them to stump up £4bn by early March for remediation work on cladding on 11-18 metre buildings. He had also threatened developers with the weight of the law.
So far, the government and the industry have committed £10bn to cover the UK’s cladding remediation bill.
This includes a £5bn cladding-focused package announced in February 2021 for buildings over 18mn, subsidised by £2bn tax on developers.
Developers have also been instructed to put in a further £2bn to fix their own 11 metres+ buildings, as well as pay a £3bn levy on all new development to be used to fund fixing 11-18m cladding.