Recommendation 5

HM Government Acknowledged

We have delivered robust protections for leaseholders, completely reversing the legal presumption 8 that leaseholders are automatically responsible, with uncapped and unlimited liability, for all costs associated with historical building safety defects. These protections are significant and far- reaching. Our protections will ensure that many leaseholders pay nothing at all. First, leaseholders are fully protected from costs associated with the removal of unsafe cladding. Where a developer has signed up to our developer pledge, they will fix non-cladding defects – as well as cladding defects – in their own buildings, and their leaseholders will pay nothing. If a building owner is, or is linked to, the developer, that building owner will be liable for the costs associated with non-cladding defects, and their leaseholders will pay nothing. If the building owner or landlord is not linked to the developer but has the wealth to meet the non-cladding costs in full, their leaseholders will pay nothing. And if a leasehold property is valued at less than £175,000, or £325,000 in London, the leaseholder will pay nothing. Where the building owner or landlord is not at fault – where they have no link to the developer who created these defects – and do not have the wealth to meet the remediation costs in full, and only in this situation, leaseholders may be asked to contribute towards non-cladding defects; these contributions are subject to the fixed caps. It is important that the Government takes a proportionate approach where there is no clear party that needs to pay in full. In these circumstances capped leaseholder contributions will help to make sure the necessary remediation works take place. This will allow banks to lend on properties, reduce leaseholders’ insurance premiums and crucially, ensure affected buildings are made safe for all living in them.