Building Safety Fund update

24th July 2020

Registrations to the Building Safety Fund for the remediation of non-ACM Cladding Systems are due to close at the end of this month and must be made by 31 July 2020 to entitle parties to apply for funding.

Building Safety Fund proving popular

All the signs are that the fund will be heavily oversubscribed, with many hundreds of applicants, and the likelihood is that the cost of remedial work will run to at least double £1 billion that the Chancellor announced in his March 2020 budget. However, as the Chancellor is being rather generous with the money at the moment, there is every hope that applicants will not be left with the shortfall and further sums will be forthcoming.

Regardless of whether further funds materialise, it is vital that applicants register with the Building Safety Fund by 31 July 2020, failing which they will not be able to apply for funding.

Those timetables are even harder to comply when resident management companies, right to manage companies, managing agents and others have to deal with following issues:

  • Industry capacity to carry out so many remedial projects simultaneously. Will enough competent contractors be available?
  • Whether professional indemnity insurance is available to designers and consultants on acceptable terms for cladding work
  • Potential issues around eligibility for funding – e.g. whether the specific cladding system is eligible (which can be a difficult question) or whether the lease actually provides for leaseholders to pay the cost of replacement
  • Identifying and maintaining potential claims on behalf of leaseholders against warranty provides (such as NHBC) and parties involved in the original construction. It appears likely to be a condition of funding that such claims are pursued and any sums recovered are repaid to the Building Safety Fund
  • Planning applications and Building Control

There is certainly a considerable volume of work to be carried out. That work will need to be carefully managed, both to meet the requirements of the Building Safety Fund and achieve a safe and sound outcome for Leaseholders.

Managing agents, management companies and other applicants will need to work through these issues (usually on top of having to safely manage a property, and often without additional resource). Checking whether specialist subcontractors and/or designers carry the appropriate professional indemnity insurance to cover work in this field is of significant importance – many are struggling to obtain cover. Beyond that, checking the financial strength of those they engage with for the work, their track record and experience, plus obtaining proper warranties and contractual protections are in place.

Building Safety Fund claims

Blake Morgan have the benefit not only of extensive experience in both corporate and residential cladding issues/claims but also a specialist project management team able to handle advancing claims against the Building Safety Fund. We are actively involved in handling claims both against the Building Safety Fund and against third parties, including new build warranty providers and parties who originally installed/designed the cladding.

For legal advice on this, please contact James Bessey, James Gundy, Gemma Hill or Simon Lewis.

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