FAQs on the Building Safety Fund - act now for assistance in replacing non-ACM cladding

9 June 2020

The Government have recently announced the availability of a £1 billion Building Safety Fund (“Fund”) designed to remediate unsafe non-ACM cladding systems on qualifying residential buildings.

In short and subject to qualifying conditions, the Fund will meet the cost of remedying unsafe non-ACM cladding systems on residential buildings in the private and social sector that are 18 metres or higher.

The registration process is now open and will close on 31 July 2020. It is therefore important to consider your eligibility now and to register as soon as possible.

Please use the following FAQs to find out more:

What is non-ACM cladding?

The dangers of using ACM (or “aluminium composite materials”) in cladding systems were highlighted by the Grenfell Tower disaster in 2017. The spread of the fire at Grenfell Tower has been linked to the use of ACM cladding.

Non-ACM cladding includes other metal composite panels, High Pressure Laminate, render and timber wall systems and can also fall foul of fire safety standards.

The Fund follows the Government’s earlier scheme which was open to buildings with ACM cladding systems only.

 

Who can apply for the fund?

The Fund is designed to ensure the safety of residents and to protect them from receiving significant bills from their landlord. Despite this, residents cannot themselves register for the Fund.

Registration is open to freeholders (the building owner) or other entities responsible for the building’s safety (such as managing agents) for buildings which are:

  • 18 metres or higher;
  • residential; and
  • have or may have unsafe non-ACM cladding systems as part of the external wall system.

Before registering, the Government expect building owners to have already exhausted all other avenues to fund the remediation, save for passing the costs to the residents.

To review the full prospectus click here.

 

What is covered by the fund?

The Fund covers the capital costs of removing and replacing unsafe non-ACM cladding systems. This cover includes works directly related to the replacement of unsafe non-ACM cladding systems, such as:

  • access (e.g. scaffolding);
  • removal and disposal of existing non-ACM cladding;
  • replacement materials; and
  • applicable labour costs.

The Fund does not cover:

  • costs which would not otherwise be recovered from leaseholders through the service charge provisions in their leases;
  • managing agents’ fees in respect of administering non-qualifying expenditure;
  • other necessary fire safety works which are not related to an unsafe non-ACM cladding system;
  • works which are not directly related to the remediation of unsafe non-ACM cladding systems (e.g. general maintenance and redecoration or the replacement of windows); and
  • other structural works which are not directly related to the remediation of unsafe non-ACM cladding systems.

 

I have completed the registration, what happens next?

Following registration, you will be asked to provide supporting evidence for your technical eligibility to the Fund. This will include evidence of the height of your building and evidence of the cladding materials that are in place.

For further details on the technical requirements, click here.

 

I have already started replacing the cladding on my building, can I register for the fund?

No. Where work to remediate unsafe non-ACM cladding systems has already started or has been previously committed to prior to the Government’s budget announcement on 11 March 2020, such works will not be eligible for the Fund.

 

I own multiple buildings, do I need to register each building separately?

Yes. Where multiple buildings are owned, including in a single development, you must complete one registration for each building.  

 

My building is less than 18 metres high, is a similar fund available?

No. Funding will not be available for buildings under 18 metres in height.

That said, there is an allowable tolerance of 30cm under this height.

Please note that the measurement excludes roof-top plant and any top storeys consisting exclusively of plant rooms.

For further details on how to measure your building, click here.

 

Is a similar fund available for commercial buildings?

Not for purely commercial buildings.

The Fund covers mixed use residential and commercial developments, but does not cover purely non-residential buildings, such as hotels, hospitals and other buildings where there are no residential leaseholders.

 

Is the Fund a positive step?

Yes, as a Fund designed to improve the safety of residential buildings, the Fund is undoubtedly positive.

That said, whether the Fund will be successful in practice remains to be seen.

The success of the Fund may rely on residents pushing building owners to consider their eligibility and to act quickly and proactively to ensure that they are registered in time.

The success and availability of the Fund may also depend on the level of scrutiny applied by the government following registration. The Government expects building owners to “do the right thing and remediate unsafe cladding on buildings without seeking funding from residents who were not at fault, or from the taxpayer” and only to apply for the Fund where they are unable to cover the costs themselves and would otherwise “have no choice but to seek funding from their leaseholders”. Building owners will therefore have to show that they are unable to meet the costs of remedying the non-ACM cladding systems, not simply that they are unwilling to meet these costs. If registration for the Fund is over-subscribed, the government may scrutinise this requirement more strictly.

 

Why is it important to act now?

Registration for the Fund closes on 31 July 2020. If you do not register within this time, you will be unable to receive support from the Fund, even if you would have otherwise been eligible.

If you’re a building owner:

Full application guidance is to be issued in July, once the registration process is complete. As such, if you are unsure whether you qualify for the fund, it is best to register and await the full application guidance.

Registration will not guarantee that a building will receive funding through the full application process, but it will help ensure that building owners receive support (if necessary) in identifying the materials present on their building and in planning the remediation work.

The Fire Safety Bill, which is currently before Parliament, is set to ensure that fire and rescue services enforcement powers can be used in relation to unsafe external wall systems. As such, building owners who do not utilise the Fund or fail to remediate unsafe systems themselves, may face enforcement action if their cladding systems are deemed to be unsafe following the implementation of the bill.

To register click here.

If you are a resident:

Whilst you are unable to register for the Fund directly, there are a number of steps you can take if you are concerned about the safety of your building or if you suspect that non-ACM cladding is in use. These steps include:

  • ask your building owner or managing agent for confirmation that the current cladding meet fire safety guidelines and for a copy of the most recent Fire Risk Assessment;
  • if the response is unsatisfactory or reveals that non-ACM cladding is in use, ask your building owner or managing agent to confirm what remedial steps they are taking and whether they are considering the Fund;
  • if the building owner or managing agent’s response is unsatisfactory or not forthcoming, contact your Local Authority, local Fire and Rescue Service or solicitor for further advice.

 

further information

You may be interested in our Real Estate & Construction pages.

If you would like to discuss any topics raised in this blog, please contact a member of our team.

 

About the author

Tom Beak is an Associate in the Real Estate team and advises a wide range of clients on commercial and high value residential property transactions, including sales and purchases, refinancing, property development and landlord and tenant matters.

 

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