Real Estate Law Blog - The Building Safety Fund

Following the tragic Grenfell fire in June 2017, it has become apparent that a significant number of high-rise buildings have non-compliant and unsafe cladding installed. In May 2019, the government announced that it would make funding available for the removal of unsafe aluminium composite material (ACM) cladding from privately owned buildings. The government has now gone further and in the March 2020 Budget it announced a further £1 billion fund for the removal and replacement of unsafe non-ACM cladding systems in high-rise buildings (18 metres and above) in 2020 and 2021 (Building Safety Fund).The government has confirmed that there will be no further funding available for the replacement of cladding after this.

Who can claim?

The grant funding will be available to remediate high-rise buildings in both the social and private residential sectors that have unsafe non-ACM cladding systems. In the private sector, grants will be for the benefit of the leasehold owners of flats. However, it is the owner of the building that will be required to register for the fund.Funding will also be available for mixed-use residential and commercial developments in both the private and public sectors and for registered providers of social housing.The government also expects building owners who have already committed to pay for the removal and replacement of unsafe non-ACM cladding systems on buildings above 18 metres, to honour such commitments.

Procedure for funding

Full details of the application process and guidance is expected to be released by the end of July 2020. However, potential applicants are required to register their buildings online between 1 June 2020 and 31 July 2020. The Ministry of Housing, Communities and Local Government will then assess applications in relation to both the height of the building and the non-ACM cladding system. Further details and the link to register for the fund are set out in the prospectus.It is estimated by some groups that in London alone, the cost of removing and replacing non-compliant cladding is likely to cost in the region of £4 billion. This would of course mean that the Building Safety Fund would only meet 25% of the predicted cost and so it is important for building owners who consider that they may be eligible for the fund, to act fast and register as soon as possible.As a condition of funding, building owners must also pursue warranty claims and appropriate action against those responsible for putting unsafe cladding on their properties. Any monies recovered would then have to be repaid to the government. Such claims are likely to be against building contractors and professional design teams who were responsible for the design and installation of the non-compliant cladding. Building owners who are considering applying for funding must therefore also start taking steps to seek advice on these claims.

The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.