Title: GOVERNMENT OVERHAULS ITS APPROACH TO BUILDING SAFETY CRISIS

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This afternoon (Monday 10^th January 2022), the Secretary of State for Levelling Up, Housing and Communities, Rt. Hon. Michael Gove gave a statement to the House of Commons, confirming an ‘overhaul’ of the Government’s approach to the building safety crisis.

The statement marks a ‘resetting’ of government policy, with the relatively new Department for Levelling Up, Housing and Communities (DLUHC) team demonstrating a new commitment to fixing unsafe and dangerous buildings as soon as possible, while keeping costs to a minimum for leaseholders living in those buildings.

The details of the new approach come ahead of the Building Safety Bill returning to the House for Report Stage, and include:

• Restoring risk proportionality to the remediation of unsafe buildings, including withdrawing the controversial Consolidated Advice Note and replacing it with the PAS 9980 (expected to launch 19^th January 2022), and plans for future engagement with the Royal Institution of Charted Surveyors (RICS) and key lenders to form a new reset approach to the building safety crisis in terms of risk assessment and suitability for lending
• Scrapping the previously proposed loan scheme for affected 11m – 18m buildings, replacing it with a limited grant scheme for leaseholders, up to a maximum of £4bn
• Developers are expected to contribute to this £4bn package, and if they fail then they can be threatened with approved “use of high-level ‘threat’ of tax or legal solutions”
• In addition to the £4bn grant funding, there is also going to be £27m more available for fire alarms in buildings, in addition to the existing ‘waking watch relief fund’ of £30m
• The Government will launch ‘Operation Apex’ to navigate the intricate webs of SPVs set up by developers which can obscure liability – a move that will be particularly welcomed by leaseholders. Papers seen by The Times note that it will also identify "egregious behaviour where freeholders have sought to aggressively pass on costs to innocent leaseholders".  

To watch a recording of Mr Gove’s statement: CLICK HERE  (please set the media player to 15:34)

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11M-18M FUNDING SPECIFICATIONS

• Lenders and insurers must not be brought in to the ‘polluter pays’ piece – no contributions are to be sought from them.
• This grant funding covers cladding/external wall systems ONLY, no other fire or safety defects or problems. Mr Gove expect developers or other responsible parties to make good these defects. He reiterated the principle that leaseholders should not pay.
• The Building Safety Fund delivery for 18m+ buildings must be “accelerated”.

DEVELOPER’S CONTRIBUTIONS:

• Mr Gove has warned developers that if they don’t agree to fund his new £4bn building safety plan by early March 2022, he may force them to act by using different restrictions such as public contract bans, planning restrictions or pursuing them through the courts.
• Gove now expects developers to fund and undertake all necessary remediation on buildings developed over 11 metres and provide comprehensive information on all buildings over 11 metres which have historic fire safety defects spanning the past 30 years.
• The Government has said that it will only decide on which companies are in scope of the tax following the discussions with industry but expects it to cover all firms with annual profits exceeding £10million.
• Over the coming weeks, the Government will host a series of roundtables with ministers, developers and leaseholders that will look to agree a settlement. This will open with the 20 biggest house builders in the sector being invited into Government to start discussions.

In his letter to developers today (Monday 10 January), Gove set out three asks  and expectations: 

1. Agree to make financial contributions this year and in subsequent years to a dedicated fund to cover the full outstanding cost to remediate unsafe cladding on 11-18m buildings, estimated currently to be £4bn;
2. Fund and undertake all necessary remediation of buildings over 11m that you have played a role in developing (i.e. both 11-18m and 18m+). Any work undertaken by developers themselves on 11-18m buildings will reduce the total cost of cladding remediation that has be paid for through the proposed 11-18m fund; and
3. Provide comprehensive information on all buildings over 11m which have historic fire-safety defects and which you have played a part in constructing in the last 30 years.

Nigel Glen, CEO of the Association of Residential Managing Agents, and Andrew Bulmer. CEO of the Institute of Residential Property Management, who have been at the helm of an industry building safety campaign to represent the concerns and views of members and their leaseholders, have welcomed today’s announcement, commenting:

"As early supporters of the "Polluter Pays" principle, ARMA and IRPM congratulate the Government on its decision to scrap the proposed sub-18m loan scheme in favour of grants. This will remove the threat of potentially life-changing bills for leaseholders and allow them to get on with their lives, in a building that is safe.

“The Government’s intention to bring a much-needed sense of risk proportionality back into the approach to the building safety crisis is also to be applauded, and something that our industry has been calling for.

“Of course, there are critical delivery details still to be worked out such as industry capacity to assist with the ‘acceleration’ of the remediation programme, and we look forward to understanding how other building defects, including compartmentation and any external wall system structural issues, will be dealt with.

“At present, it appears that the government is expecting the developer or other causal entity (the 'polluter') to pay. Extending the claim period for defective buildings to 30 years is helpful. However, if the responsible party does not volunteer to remedy, and if Mr Gove cannot persuade them to do so, it will remain a huge challenge for leaseholders to litigate against a resistant developer and construction sector.”

Title: COVID-19: Best Practice Guidelines for Property Managers

Description:

UPDATED - Monday 13 December - The UK COVID-19 alert level has increased from Level 3 to Level 4 following a rapid increase in Omicron cases. ‘Plan B’ of England's COVID response is now in effect, introducing some new restrictions. Currently, restrictions in Wales are very similar to those in England.

As restrictions in England and Wales change, our COVID-19 guidance has been updated accordingly. Please click the link below to view our updated advice for those working in the leasehold management industry.

ARMA has produced and published some best practice guidelines to help plug some of the gaps in current guidance for the benefit of everyone in the industry. The guidelines will be updated as often as we can, so please refer back to this page regularly. 

The latest version will be included in ARMA's monthly updates to all members, along with other essential information and guidance from official sources and experts from within our membership network. 

To download the latest version of the Best Practice Guidelines, CLICK HERE

Not an ARMA Member yet?

If you’re a managing agent, developer/freeholder or a supplier to the leasehold management industry, join ARMA today to benefit from full access to ARMA’s guidance, comprehensive weekly bulletins, monthly newsletters, technical advice, health & safety helpine, expertise and events, plus many other professional advantages: https://arma.org.uk/join-arma/how-to-join-arma

Title: ARMA 2021 - Year in Review

Description:

After adapting to new ways of working during a pandemic, ARMA succeeded in expanding its offering to members in 2021 while continuing to meet with Government and industry groups to tackle the sector’s main challenges. As a result, ARMA has further grown its membership and training programme, and was behind a number of key industry successes in the leasehold management sector. Download our 2021 Year in Review infographic, here.

ARMA Membership Growth

ARMA begins 2022 with a member count that is higher than ever, totalling 340 Managing Agent Member and Associate firms and bolstered by the 14 managing agents it welcomed onboard in 2021. ARMA members now represent almost 40% of the managing agent market, equating to a whopping 1.5m residences (around 50% of private sector leasehold properties). To give you an idea of how quickly ARMA has grown, its members managed just 700,000 homes in 2014.

An integral part of ARMA’s membership, Partner, Network & RMC/RTM member firms now total 175. ARMA Partners are companies that provide essential services to members, whilst those in the Network category are developers, freeholders, freehold agents, Housing Associations and other corporate landlords/local authorities.

ARMA Training Courses

ARMA’s training courses continued to run online throughout 2021. In total ARMA delivered 59 Training sessions online. This equated to 270 hours of training provided, upskilling 1,707 delegates with a combined total of 8,028 CPD hours. In 2021, ARMA launched 6 New Training Courses and Webinars.

ARMA COVID-19 Crisis Support

From the very start of the pandemic, ARMA was proactive in ensuring its membership was kept up-to-date on the latest advice and guidance, as well as engaging with Government to ensure the property sector was considered when new guidelines and advice were being issued. ARMA also continued to run its events and training courses online, including its Annual Conference and Regional Briefings, making it safe and convenient for members to continue learning from others in the industry.

Throughout 2021, ARMA delivered 12 monthly COVID-19 email updates featuring advice, guidance and news, along with 4 quarterly member/partner video briefings for members. ARMA also issued 2 Best Practice Guideline documents for property managers, sector suppliers and business owners which included guidance on working safely during the pandemic and advice for returning to the workplace.

Industry Success

Whilst the pandemic grabbed a lot of the headlines, there were plenty of developments and achievements across the sector, with ARMA proving to be a driving force behind many of them. Highlights include:

• 26 meetings with Government on cladding and 10 with Cladding Actions Groups. ARMA’s efforts helped secure the additional £3.5 billion to aid the remediation of buildings over 18 metres with unsafe cladding.
• Extensive lobbying with Government and the industry throughout the year on a range of topics, including 29 meetings with MPs.
• Supreme Court intervention in a landmark ‘Right to Manage’ legal case. The case determined whether leaseholders with the right to manage only acquire the right to manage the block itself, or the right to manage the estate as well.
• ARMA’s flagship Annual Conference returned to the small screen in October, focussing on challenges set to shape the residential leasehold sector beyond the pandemic. ARMA’s Regional Briefings also made a return, being held in April for all members.
• ARMA and IRPM merger approved by members and underway. The new company will expand its offering to both sets of members and be a larger voice when speaking to Government and the industry.
• TV, radio and media appearances including coverage in The Telegraph, The Guardian, The Times & Sunday Times, BBC Radio 4 You and Yours and BBC News.

Entering 2022 with its biggest membership total to date, ARMA will continue to work tirelessly to support its managing agent members and Partners whilst championing the rights of leaseholders across England and Wales.

If you want to learn more about the benefits of joining ARMA as a member, CLICK HERE.