Private Eye -High-rise, higher costs

From Private EYE –  Cladding safety, Issue 1462

IT WAS always hopeless optimism on the part of communities secretary Sajid Javid to think wealthy speculators in the freeholds of private blocks of flats would pay to remove Grenfell-type cladding. And so it has proved.

As Eye 1457 reported in November, the Tchenguiz Family Trust, based in the British Virgin Islands, is off to court to dump the £2m cost on 97 leaseholders at Citiscape in Croydon – that’s around £20,000 per flat owner, most on low incomes.

At Heysmoor Heights in Toxteth, Liverpool, where the 98 flats sell for less than £100,000, Abacus Land 4 Ltd, a Guernsey company, is demanding £18,000 from each leaseholder. It is administered by the Long Harbour/Homeground fund of David Cameron’s brother-in-law Will Astor, the heir to the viscountcy. This opens up the spectacle of hard-pushed flat owners, who cannot pay, possibly losing their homes through lease forfeiture to an offshore entity where the beneficial ownership is hidden – and where they may have benefited from tax advantages.

Astor’s spokesman, the former Tory MP turned PR smoothie Adrian Flook, assured the Eye the offshore owners of the freehold to Heysmoor were “exclusively UK-based pension and life insurance funds”. As they are all UK tax-exempt, he added, there are therefore no tax advantages, and registration in Guernsey is for “administrative efficiency” only.

‘Saving its skin’
Flook, who works for Sir Lynton Crosby’s lobbying firm Crosby Textor, also said Abacus had “swiftly and voluntarily” injected £750,000 on to the leaseholders’ service charge – as a loan – to cover interim fire wardens as well as building costs. He claimed that without this generosity the residents would have had to move, which would have been even more expensive.

However, Sebastian O’Kelly of the campaign charity the Leasehold Knowledge Partnership, said: “Contrarily, one could say that Abacus has imposed a £750,000 loan and then proceeded to spend it as it chose. This wasn’t philanthropy; the freeholder was saving its skin with the fire authorities.

“Flook’s blather would be more weighty if Astor’s Homeground did not also charge old ladies £50 to keep a cat, and demand £108 to consider a freehold purchase – all familiar ploys in the leasehold game, which Astor spent six years learning at Vincent Tchenguiz’s side.”

To date, 17 freeholders are off to court to let a tribunal decide whether the terms of the leases mean hapless leaseholders have to pick up the tab for removing dangerous cladding.

One particular case would be notably unjust. A vast 980-flat development, New Capital Quay in Greenwich, which also has Grenfell-style aluminium composite material (ACM), was completed by Galliard Homes only four years ago. The freeholder remains Galliard’s own company, Roamquest Ltd.

‘Absolutely clobbered’
Huge sums are being racked up to provide fire marshals, and Galliard is showing every sign that it expects the leaseholders to cough up to remove the cladding that it put up itself. If the cladding and safety costs are as extensive as at Citiscape in Croydon, the total could be as much as £19m.

Local Labour MP Matthew Pennycook told the Commons before Christmas that leaseholders “bought their properties in good faith and bear no responsibility whatever for failures in the building regulations regime, but as things stand they are going to be absolutely clobbered”.

So far, the only freeholder to agree to pay to remove Grenfell-style cladding is Legal & General at the Blenheim Centre/Reflexion site in Hounslow, west London, where the bill may exceed £10m. Unlike Astor’s clients, it has not chosen to hide its ownership.

Elsewhere, Javid’s pleas appear to have fallen on deaf ears. Will we have to wait until it’s too late and the courts have decided the leaseholders are liable before the government intervenes?