Landlord cries foul over £50,000 cladding bill after ‘not qualifying for help’

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A landlord whose properties are caught up in the cladding scandal faces a bill of up to £50,000 unless the government changes the rules about who it will subsidise.

Neera Soni rents out a number of leasehold properties and says she and at least a quarter of those owners at one development in Birmingham don’t qualify for help.

Under section 119 of the Building Safety Act 2022, anything in the fire officer’s report comes under the Building Safety Fund and covers all leaseholders, but any other problems aren’t covered. In this case, the developer would usually pay for repairs.

Qualification

However, it gets more complicated, as landlords who own more than three properties and don’t live in the one being remediated don’t qualify for help; then, the freeholder and head leaseholder can charge them the full share of the remediation costs through the service charge.

And if a property owner’s building is worth less than £2 million, they can charge these unqualifying leaseholders up to £50,000, while leaseholders who qualify only pay up to £10,000.

Cladding

Soni, a member of action group BrumLag, owns two other properties affected by cladding and has already stumped up some money for repairs and is dreading the final bill.

“It doesn’t cost the government or taxpayers anything to help leaseholders – they need to get rid of this non-qualifying rule,” says Soni.

“Our service charge has gone up from £6,000 due to issues with water ingress and an insurance hike, to £18,000 – that’s before the mortgage,” she tells LandlordZONE.

The courts are set to rule on the exact meaning of section 119 of the Act, but that is expected to take at least a year, she explains. 

“The government encouraged us to buy buy-to-let properties, but we have very little equity in them and as they don’t qualify we can’t sell them even when the work has been done,” adds Soni. “It’s so unfair.”

Read more about the cladding scandal.

View Full Article: Landlord cries foul over £50,000 cladding bill after ‘not qualifying for help’

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