Fire safety and tower blocks: who pays?

In the aftermath of the tragic events caused by the Grenfell Tower fire in London last year, issues relating to who is responsible to pay for fire safety and any remedial costs are fast-emerging. The First-tier Tribunal (Property Chamber) (“FTT”) has just given its determinations of two such issues for tower blocks in Croydon. This is a case called FirstPort Property Services Limited v long leaseholders of Citiscape (LON/00AH/LSC/2017/0435). It concerns the costs of replacing cladding to buildings and the costs of employing fire safety officers in the buildings. In 2001 the premises were constructed as two blocks of flats all sold on long leases. The leases are tripartite with very long terms (originally granted for 999 years); the freeholder (now Proxima Properties Limited) appears to have no repairing or maintenance obligations which are instead vested in the other party to the lease – effectively the manager – now FirstPort Properties Limited, which made the applications to the tribunal in this case. Each block has external cladding, and in the days following the Grenfell Tower disaster, where it appears that the external cladding in that case may have contributed to the rapid spread of fire throughout the tower, the managers decided to carry out a fire risk assessment of the Croydon blocks. There were also fire brigade inspections. In the event the manager decided to employ a fire marshal to patrol the blocks with instructions to manage an evacuation in the event of fire. A second fire marshal was later appointed. As to the cladding, it seems that the managers assumed that they might constitute a fire hazard so their internal surveyor was asked for an opinion and reported that the costs of replacing the cladding would be in the order of £483,000. Later, however, externally appointed experts quoted fees of between £1,815,822 and £2,530,877. Application was made by the Manager to the FTT for a determination as to whether the costs of the fire marshals, or the remedial works, were recoverable in principle under the leases and are “reasonable” as required by sections 18, 19 and 27A of the Landlord and Tenant Act 1985. The FTT had little difficulty in finding that on a proper reading of the lease (such as the leaseholder covenant to pay the costs of paying people in connection with the upkeep of the property) that in principle a warden could be employed. It also found that the actual costs were not unreasonable (and noted that the leaseholders failed to obtain alternative costs estimates). On the recladding costs the FTT adopted the manager’s submission that the costs are occasioned by the need to renew the cladding which is a cost that in principle is recoverable from the leaseholders. On the interpretation of the leases the tribunal noted that by granting 999 year leases the original freeholder had effectively relinquished any capital interest in the flats. It was “reasonable to conclude” (paragraph 62 of the decision) that all future costs should be shared by the leaseholders. As to the reasonableness the tribunal rejected the submission that the lower estimate produced by the landlords was too low. Thus the costs of recladding falls on the leaseholders. (Both the developers and the current freeholders have declined to contribute to these costs – see paragraph 63 of the decision). James Driscoll is a solicitor and a writer