[ryantownsend]

I don’t want to distract from the tragedy itself but, even after all this, more people will continue to suffer due to the subsequent cladding scandal.

The UK government are trying to pass the costs of remediation for other cladded buildings on to leaseholders who didn’t have any involvement in the design, build or sign-off of their buildings.

Some people are already being bankrupted through extortionate waking watches, mitigation and remediation bills and I’ve even heard that one person in my city (Leeds) has killed themselves due to the stress.

According to the select committee reviewing the Building Safety Bill, “the only people who believe leaseholders should pay are the government”.

The House of Lords has proposed an amendment to the bill stating that leaseholders won’t be made to pay (note: not forcing the tax payer to pay, just ensuring the leaseholders don’t) and the Housing Committee (namely MP Robert Jenrick) are rejecting this on the basis that the tax payer shouldn’t foot the bill.

We’re talking sums amounting to up to £100k being charged to people who paid similar amounts for their apartments in the first place! One affected block was built since Grenfell, so the entire ownership could effectively be in massive negative equity.

The government have put together a fund of £1bn for non-ACM cladding remediation, expecting that to cover ~600 buildings, but already over 2,700 buildings have applied and the estimated cost UK-wide is upwards of £15bn.

The whole thing is an utter shambles and people are stuck unable to sell their properties (stalling the first time buyer market as they can’t move up to other properties, and meaning they cannot move for work in a time when there are masses of redundancies) or even remortgage!

[suvelx]

  > The government have put together a fund of £1bn for non-ACM cladding remediation, expecting that to cover ~600 buildings, but already over 2,700 buildings have applied and the estimated cost UK-wide is upwards of £15bn.

Non-ACM over 18m tall. Shorter buildings (the majority) are up shits creek too.

There's also a 30M fund for waking-watch relief... Which at 150k per alarm, you can get 200 alarms.

  > The House of Lords has proposed an amendment to the bill stating that leaseholders won’t be made to pay (note: not forcing the tax payer to pay, just ensuring the leaseholders don’t) and the Housing Committee (namely MP Robert Jenrick) are rejecting this on the basis that the tax payer shouldn’t foot the bill.

AFAIK It was initially rejected because it was worded in such a way that would make freeholders liable for other fire-safety things such as failsafe latches. Prioritizing freeholders paying out hundreds of pounds every decade over bankrupting thousands if not millions of people.

It's a farce. The building has industry paid millions in donations to the Conservative party since Grenfell. And at every turn despite parroting "leaseholders should not pay" it has been obvious that they really meant "should pay".

Meanwhile, in a fit of hypocrisy, Jenrick has been campaigning for a (Labuor) council to fix a bridge "because they own it".

[Retric]

> Shorter buildings (the majority) are up shits creek too.

Under ~18m tall building are much easier to escape from in a fire and thus have different fire safety rules. People can normally exit the building quickly. Worst case jumping from the 3-5th story is likely to result in serious injury but is often survivable. Start talking 6+ floor things get exponentially worse with every additional floor increasing the risks.

This is of course an arbitrary line, I would have a lower limit but the tradeoffs are complicated.

[bigbubba]

> Worst case jumping from the 3-5th story is likely to result in serious injury but is often survivable.

A brief web search suggests to me that about 50% of people who fall from 15 meters (approx 4th floor) will die. Those are awful odds, and most survivers of falls from that height probably aren't landing on the sort of pavement you might expect to be surrounding a high-rise building. And how many of the survivers ever walk again? How many can even feed themselves again?

Seriously, 50% is worse than even russian roulette, a 'game' generally recognized as suicidal.

[Retric]

Again, it’s not how I would write these regulations. That said, regulators are working with real world data.

The expectation is for people to be able to exit the building or at least get to a lower floor, because that’s the usual case. Failing that ladders can generally evacuate people from the 5th floor. Jumping is very much considered a rare last resort, but is more controlled than people simply falling that distance. Further, first responders are more likely to be onsite which again increases the odds.

As an example of 4 people jumping from the 5th floor and only one being sent to the hospital. While everyone else in the building evacuated normally. https://www.independent.co.uk/news/world/europe/family-jumps...

So, while there are a lot of relevant regulations building height is a meaningful distinction.

PS: On an 18m tall building. The 1st floor is ~0 meters off the ground, the 2 floor is 3 meters up, 4th floor is ~12m up and 5th floor is thus 15m and the roof is at 18m. A window adds 1m but someone dangling removes ~2m based on their height. As in dangling from the 2nd story window is ~2m fall and a 15th floor balcony would be a 13m drop vs ~14m from a window. (Using G, 1, 2, 3, 4 is the same numbers just offset by 1.)

[bigbubba]

> The expectation is for people to be able to exit the building or at least get to a lower floor, because that’s the usual case.

That's the expectation in America surely, but is it in the UK? In America people are told to get the fuck out of buildings as fast as they can when the fire alarm goes off, but in the UK people are told to stay inside high rise buildings, apparently because they have fewer and narrower staircases. Highrise buildings in the UK are evidently not designed to be escapable. I think that should be the real scandal. The cladding is bad and effects hundreds of buildings, but how many UK highrise buildings have inadaquate stairways? Tens of thousands? More? The reason this isn't part of the scandal is probably because the scope of the problem is too enormous.

I encourage you to look up the timeline of events inside Grenfell; if evacuation began when the fire was called in, there would have been ample time for complete evacuation. 14 minutes elapsed between the initial call and fire spreading out the window of the origin flat. People were only reported trapped by smoke ~40 minutes after the fire was called in. These people were killed by the UK's policy of staying put inside buildings on fire.

Anyway, I've seen some videos of people falling a fraction of 15 meters onto pavement and dying. It seems depraved to expect somebody even on the third floor to jump onto pavement.

[Retric]

I don’t think the expectation is for this to happen frequently because it doesn’t, rather it’s part of the overall risk assessment. Total fire related deaths in the Great Britain is low and trending downward, trying to find jumping related deaths from the 3-5th floor is tough. https://www.statista.com/statistics/291135/fire-fatalities-i...

As to evacuations, that’s simply what happens in the overwhelming majority of cases. In England for the 12 months ending June 2020 there where 156,128 actual fires responded to and 231 deaths. https://assets.publishing.service.gov.uk/government/uploads/...

That’s with current regulations and resources. So, looking at that people are trying to balance spending more on fire safety vs very other issue and this is the balance they struck. I am not saying it’s perfect, just that it’s vastly more complicated than making every building as safe as possible with money as no object being the obvious correct choice. When you give that up then it’s all coming down to various compromises with different tradeoffs.

PS: Looking at the hard numbers, pushing evacuations might actually make things worse.

[Gibbon1]

Friend of mine was sitting on a balcony with three other people when the rotted joists gave way and they all fell 20 feet into the bushes below. The result was one lady with a skull fracture, a guy with broken ribs, and my friend with a compound fractured leg that involved his knee. He walks with a cane now.

[suvelx]

This doesn't change the fact that regardless of height, the residents in those buildings are having hundreds of thousands of pounds of debt forced onto them because of a retroactive law change.

And While Non-ACM cladding isn't illegal, it's still being treated as a risk for 'low-rise' buildings. It's still resulting in surveyors deeming the property unsafe, and it's still resulting in the leaseholders (not owners) of those buildings having to pay millions to 'remediate' it.

This coupled with decades of deregulation, poor construction and minimal oversight has resulted in over 5% of the market suffering from the same problems, ACM, Non-ACM, 50 meters tall, or 5 meters tall.

And nearly all of it is driven by the banks. The government has only banned ACM cladding, The banks have done the rest.

The banks don't give a shit that your odds of jump out your window are 50%. The banks just want to make sure the property they've given you a loan against doesn't burn down when you die from the fall.

[Retric]

Interesting, by banks do you mean insurance companies as well or are banks specifically at the short of this issue?

[suvelx]

Mostly banks. Insurance has a part to play.

My understanding is:

In 2018 the government banned ACM cladding.

Shortly afterwards RICS (Royal Institute of Chartered Surveyors) developed the "External Wall System" or "EWS-1" form. Which is a means of assessing the risk of cladding (external wall systems) to a building. This was not a legal requirement. It is merely a tool to assess risk. It does not even specify the credentials required to issue one, just "suitably experienced".

Surveyors carrying out an EWS-1 form would effectively be on the hook for any damages if they made the wrong call, This ended up being reflected in their insurance, so most if not all would perform a full top-to-toe inside-out fire-safety survey. These full surveys have resulted in other defects in most buildings being found. Combustible material used in balconies, insufficient fire and smoke barriers between dwellings, faulty or incorrectly installed fire doors. Note These 'defects' aren't necessarily illegal or against code, they just push the perceived risk of the building past the surveyors acceptable risk.

Banks, being horribly risk-adverse made an EWS-1 a requirement for loans on buildings over 18 meters.

Somebody in Parliament said something along the lines of "All buildings should be safe". Banks then started making the EWS-1 a requirement for all loans of multi-tenant dwellings.

But someone is always responsible for ensuring a building is 'safe'. A poor EWS-1 result means someone has to make it safe. This someone is generally the buildings Management Company, or the Freeholder (who is entitled to recover those costs from the leaseholders).

[pasttense01]

"Shorter buildings (the majority) are up shits creek too."

So you want to ban single family houses made of wood?

[bigbubba]

Just those clad in napalm I would think...

[jonatron]

I keep seeing sums like £50k and £100k per flat for cladding. How is that possible? Isn't that multiple times what a new roof would cost on a house? Or a substantial extension.

[oarsinsync]

Generally the entire exterior walls of a tower now needs to be removed and replaced. While residents remain resident in the tower. It’s not easy to cheap to retrofit the buildings.

Or maybe it is and the building industry is run by scumbags who having created this issue, are now double dipping.

Or maybe it’s a little bit of both. I don’t know myself.

[tgv]

True, that looks like a substantial amount. The outside of an average flat is a few square meters (45m2 already seems a lot). It surely can't cost upwards of £1000/m2 to replace cladding? A (Australian) price quote on the web says £12k for a house of 400m2.

[sanp]

Leaseholders / Owners should be the on the hook for bringing their buildings up to the right safety standards. This is a risk they should bear. Who gets the upside when lease / property values go up in general? This is their responsibility.

[bennyelv]

That is a very basic analysis and it misses the point. There is a system of building regulation in the UK that makes it illegal to build a building or to carry out building work which does not comply.

The building regulations in the area we're talking about here are very simple. They don't specify how, just what. E.g. The cladding material must not be flammable (simplified).

There is a system of building inspection and certification, and you cannot buy/sell/insure a building that does not have a certificate to prove that it complies with building regulations.

The issue is that at some point some complete genius said "if you're a large enough housebuilder, you can self certify".

All of the effected properties were bought in good faith with completion certificates that stated that they complied with building regulation. The properties with flammable cladding that needs replacing do not comply with building regulations.

You can't sue the builder/developer in most cases, because this will have happened more than 10 years ago.

The system of regulation is there to protect the public from unsafe buildings, and it has failed them. Why shouldn't the government pay, after all it was their promise that has been broken.

[buckminster]

I absolutely agree. Non-owners are typically paying more in rent than a mortgage would cost, yet they can't get a mortgage because of the absurd rules brought in after the 2008 financial crisis. Even after paying for this expensive remediation, the flat owners will still be ahead of renters. Why should tax-paying renters bail them out?

[hyko]

Well if we’re going down that road, technically whoever did the conveyance and survey should be on the hook as they provided the advice that formed the basis of the purchase.

They won’t be though.

[lmm]

> The House of Lords has proposed an amendment to the bill stating that leaseholders won’t be made to pay (note: not forcing the tax payer to pay, just ensuring the leaseholders don’t) and the Housing Committee (namely MP Robert Jenrick) are rejecting this on the basis that the tax payer shouldn’t foot the bill.

How does the amendment ensure leaseholders don't have to pay without putting taxholders on the hook? You can't make money from nowhere.

[iso1210]

The person that owns the actual building and land could pay.

The company and officers who sold the cladding (especially the ones who cheated on the tests) could pay

[dijksterhuis]

In a Venn diagram, "not leaseholders" will be all other space on the diagram.

I imagine it's meant to leave all other options on the table (taxpayers, developers and/or anyone else) rather than force a specific choice (except leaseholders).

[lmm]

If you legislate that it's not X and it's not Y and it's not Z, pretty soon it's no-one. Legislating that it can't be X is de facto making it the taxpayers' responsibility (or else permitting it to not be done at all).

[contravariant]

The one coherent explanation I can come up with is that they want to fund it by taxing people/companies that evade taxes.

Though that doesn't sound right for the current UK government.

[lmm]

That money would normally go into the tax bucket, so it's really still being taxpayer-funded in that case.

[contravariant]

Well they're not currently taxpayers at the very least, in contrast to the leaseholders who presumably are mostly taxpayers.

[lmm]

Are you being deliberately obtuse? Money is fungible, money recovered from tax evaders rightly belongs in the general taxation pool, funding X with money recovered from tax evaders is no different from funding X with money from the general taxation pool (unless X somehow enables recovering more money from tax evaders that wouldn't otherwise happens).

[itronitron]

What is a leaseholder in the UK?

[alextingle]

Technically, a leasehold is a very, very long fixed-term rental tenancy, with a single up-front payment. The tenancy is freely transferable, so there is a market for leaseholds that resembles the property market for freeholds. (A freehold is where the property is owned outright.)

In practice, leaseholds are mainly used to apportion "ownership" within buildings such as apartment blocks, where simple ownership of the land does not sufficiently capture the complexity of the situation.

Problems arise in a number of areas:

First and foremost, leaseholds resemble property ownership, and so many people naively treat them as such. But the value of a lease decreases as time goes by. When only a few years remain, the value drops very quickly. People who are unprepared for this can get a nasty shock, and feel hard done by.

Secondly, and more subtly, the leasehold creates a complex relationship between the landlord and the tenant - just like any rental agreement. The terms are set out in a contract which is specific to that particular leasehold - so they may vary greatly one from another. There are a myriad ways that they can contain unfair clauses, or unexpected terms.

One recent scam is for landlords to create leases that have a small, annual "service charge" (payable to the landlord) whose cost doubles every few years. After a while, the payments become extortionate!

In this case, the landlord is allowed to charge tenants for the cost of some kinds of works to the building. In the lease, that probably looks like a small item, but a clever landlord can specify the works in such a way that the tenants shoulder most, or all of the cost.

[tialaramex]

Also, the leasehold comes with two inherent rights which make it even more like "owning" a place rather than merely renting it.

First the leaseholder has a presumed right to renew this long lease when they want to. There's even a tribunal (ie a court) specifically to resolve any situations where a leaseholder believes they've been asked to pay an unreasonable amount for such a renewal, although of course going to court isn't free.

Second the leaseholders together can demand to just buy the freehold (ownership of the actual land) in most cases, under a specific formula. This is not cheap, but if your freeholder becomes a problem for all the leaseholders the freeholder cannot stop them just buying the building.

Some years ago a government tried to institute a more modern structure, Commonhold. Commonhold takes the mechanism often used to "defeat" leasehold by groups opposed to it, and turns it into a built-in feature of English law. With Commonhold the people who own individual dwellings have a lease still, but they also each own a share of a legal entity which exists only to own the freehold and they can't sell the one separate from the other. The legal entity plays the role of freeholder, but since it is owned entirely by these leaseholders it has no reason to try to charge them ground rent or mess them about in any way - it is them, jointly.

Unfortunately to the average person Commonhold just seems like you're buying the same thing for slightly more money, because Leasehold "purchases" look cheaper. So Commonhold did not take off and few exist today.

One of my pet projects (on hold because I decided not to look for a job during the pandemic so although I have plenty to survive I can't go around funding speculative legal work) is to buy the building where I live and convert it into Commonhold, partly to prove it can be done.

[Danieru]

What sort of residual value would be left for the freehold portion? How long are these leaseholds?

It sounds interesting, but also horrible. Having people be perpetual renters is the exact opposite of every government housing initiative for the past 6+ decades.

[tialaramex]

A typical long lease is longer than a lifetime, maybe 99 or 120 years, but you could in principle write a shorter one of just a few decades, or a much longer one of hundreds of years.

As I understand it the main residual value is from payment to renew leases (mortgage lenders don't want to lend against a home you may not have in a few decades, so it's often not possible to sell a lease to a "normal" buyer who wants a mortgage if it has say 50 years left on it, you'd pay to renew it), and from any "ground rent" owed by the leaseholders each year indefinitely. Historically ground rent was often set at a token amount, but of course there was an opportunity for greedy people to jack that up when creating a new leasehold property and so e.g. mine is £250 per annum.

It doesn't feel like renting at all, it's just that historically English law provided no way to outright own 3D space, only 2D parcels of land can have freehold, and arguably in practice it wouldn't mean anything anyway. If I "owned" this space, but the building it is in burned down, how do I live here without re-building it?

The freeholder is responsible for insuring the building (the certificate of insurance is posted on a notice board on the main entrance floor of my building near the weird art that presumably the owners or builders liked, and the elevator) and collecting a fair share of insurance premiums from all leaseholders, likewise they hire a maintenance company to sort the gardens, do elevator safety checks, resurface the parking, clear junk illegally left by ex-tenants (could they try to sue instead of billing the remaining tenants? Sure, but if a lawsuit costs £1000 and hiring a clearance firm costs £180 guess which gets done) and so on.

Leaseholders can (are legally always entitled to) buy the freehold, but now you've got the headache you were paying somebody else to deal with. You (collectively) need to buy insurance, hire a maintenance firm, and so on or else pay to hire somebody to do that on behalf of everybody. For a shared building where I live (as opposed to standalone houses) this division of labour makes at least some sense and I'm not opposed to it continuing to exist. Creating more leasehold houses is crazy nonsense, but alas the present governing party really like rich people, and thus has not exactly prioritised banning such practices.

[caf]

Commonhold sounds a lot like the Strata Title system that is typically used in Australia for such arrangements.

[iso1210]

In the UK, the land and the buildings is usually owned by some offshore company - a 'freeholder'

The right to occupy a given flat in the building is then sold for 99 or 125 years to a 'leaseholder', who also signs up to pay for the operational costs (insurance, cleaning, gardening etc) for the open area

They also agree to pay a 'ground rent', say £20-50 a month to the freeholder. That often doubles every 25 years (so about 2-3% increase per year), but sometimes doubles every 15 or even 10 years (so 7-8%)

[fennecfoxen]

The UK, for historic reasons, doesn’t believe in private property for the common man; almost all property in the form of land belongs to the government or someone with a legacy from the ruling class of nobility. Thus most homeowners don’t own the land their home is on, they just own a very long term lease from the actual landowner (not sure precisely what is customary these days, but imagine a 99-year lease) with N decades left on it. This is a leasehold.

Owning the land is called a freehold, and the owners are called freeholders instead of leaseholders.

Contrast the US where a lease of a home is typically paid monthly and contracted on a year to year basis.

[iso1210]

> almost all property in the form of land belongs to the government or someone with a legacy from the ruling class of nobility

In terms of acres the land is owned by descendents of friends of Henry 8th, sure. Majority of houses though aren't leasehold - although many new houses are being sold as leasehold for the last 20 years or so.

[fennecfoxen]

Thank you for the clarifications. I never personally got anything beyond a shorthold while in the UK.

[joosters]

> The UK, for historic reasons, doesn’t believe in private property for the common man

On the contrary, the UK is deeply obsessed with house ownership! The key word though is 'house', the Grenfell related scandals have all been about large blocks of flats, where the residents will almost certainly be leaseholders, with the actual building owned by someone else (probably a company)

[dboreham]

Pretty sure this is not the case in Scotland (still part of the UK) since some time in the 70s and definitely since 2000. https://en.m.wikipedia.org/wiki/Abolition_of_Feudal_Tenure_e...

[cultus]

Anglo law not historically having a concept of personal property...

That's a new one for me.

The US only protects property rights of some. Read up on asset forfeitures in the US. Police can seize cash on you with only "reasonable suspicion" with no conviction required.

[vijayr02]

I agree, here is a related story I'd submitted a few days ago: https://news.ycombinator.com/item?id=25460601

This story is about how fire watches are being organised with little to no notice and the costs charged to the flat owners.

In general the leasehold system in the UK is quite unfit for purpose and a proper feudal throwback. Agency problems galore and regulatory rent seeking at it's worst. I'm surprised there is not a more sustained political movement to get rid of it!