Trouble in Paradise Wharf: the leaseholders who have been served £30,000 remediation bills

Insight11.06.217.00 AM by Nathaniel Barker

Two of three buildings at a development in Manchester are wrapped in dangerous cladding that must be removed and the third needs roof repairs. But leaseholders in the third block are being asked to contribute thousands to fix an issue that does not affect them. Nathaniel Barker reports

Whittles Croft at Paradise Warf in Manchester was found to be wrapped in dangerous cladding through an EWS1 survey (picture: Alamy)

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Trouble in Paradise Wharf: the leaseholders who have been served £30,000 remediation bills #UKhousing

Note: since this story went to publication, Mainstay confirmed that it has re-measured Whittles Croft and found it to be taller than 18 metres, so has submitted an application for cladding remediation on this block to the Building Safety Fund. Pending a government decision on this application, the bill for Whittles Croft and Junction Works has been temporarily withdrawn. Read the full story here.

Paradise Wharf in Manchester is a microcosm for the calamitous nature of the building safety crisis.

It is a circa 20-year-old development scheme in the east of the city made up of three buildings. Two of the blocks are wrapped in dangerous cladding, which was identified through External Wall System 1 (EWS1) surveys carried out around six months ago.

One of these, Jutland House, is taller than 18m and so meets the government’s definition of a high-rise. The other, Whittles Croft, does not. The third, older block, Junction Works, does not have any cladding in need of remediation.

In late May, the development’s management company, FirstPort subsidiary Mainstay Group, contacted residents with bombshell news. It had decided to begin remediation of the cladding on Jutland House and Whittles Croft as soon as possible – a positive step, one might think.

An email to leaseholders seen by Inside Housing explained the urgency is partly “to comply with the strict requirements of the Building Safety Fund”, which is contributing £1.5m towards the works on Jutland House but does not cover balcony and window replacements at £326,019. The terms of the funding require work to begin by 30 September.

Additionally, residents were told that Mainstay has managed to negotiate a £187,000 discount with the contractor if works on all three buildings are carried out simultaneously. This means that despite not having any cladding work required, £1.6m will also be spent on Junction Works, mainly to carry out roof repairs after reports of water ingress on the top floor.

Altogether, including window replacements on all three blocks and balcony works at Jutland House and Whittles Croft, the bill will come to £3.9m between Paradise Wharf’s 114 leaseholders, minus the government funding and contractor discount. Watkin Jones, the buildings’ developer, has accepted no liability.

So, the upshot for leaseholders was that they were told they must find tens of thousands of pounds to pay for the works by 31 July – just two months away. A payment request to one Whittles Croft resident demanded more than £30,000.

Any delays in coughing up, they were warned, “will delay the start of work and could jeopardise the government funding and the ability to receive the negotiated discount on the works which is based on undertaking the works in short succession”.

Leaseholders were urged “to speak to mortgage lenders to release funds… as early as possible”.

But Lee Watton, a resident of Jutland House who needs to find £24,000, came up against a brick wall. He explains: “My mortgage company said that because of the type of mortgage I’m on I can’t release funds. You’d need to be on a flexible mortgage with added interest, which most people aren’t. From a personal point of view, I set up a business four months ago. I could really do without this.”

The thing about Paradise Wharf is that the leases allow the freeholder to claim service charges for works across any of the blocks – so Junction Works residents are being asked to contribute towards cladding costs despite the issue not affecting their building.

Mr Watton says leaseholders were not previously aware of this arrangement. He suspects that the extensive repairs to the roof on Junction Works are partly intended to justify its inhabitants having to stump up so much cash.

Most residents will need to take out loans to find the money, Mr Watton says. For many, the interest payments on those loans will far outstrip the contractor discount touted by Mainstay – which is worth about £1,600 per leaseholder. “Why are we having to pay for it up front?” he wonders aloud.

As required by law, Mainstay is currently consulting with leaseholders over the proposed charges, in a process set to end on 18 June.

“Lots of leaseholders have come together and said, ‘we’re not happy,’” says Mr Watton. “Our legal advice has been not to part with any money just yet and push back. So that’s where we are at the moment. No one really knows what is going to happen.”

To summarise: at Paradise Wharf there is one block where an arbitrary government deadline is adding to pressure for residents to find huge sums of money in just weeks, another where no government support is expected for two years, and a third where leaseholders are having to fork out for cladding despite having none on their building.

Circumstances are conspiring to drive residents into the perverse situation of railing against proposals to remove dangerous cladding as soon as possible.

When approached for comment, Mainstay said it would provide an update following a meeting with residents due last night on Thursday.

A spokesperson for Watkin Jones said: “We understand the difficult position in which leaseholders at the Paradise Wharf find themselves.

“Although we have no legal obligation to do so, we want to continue our constructive engagement with them and help where we can.

“We have, for example, tried to open dialogue with the building’s freeholder, who is legally responsible for remediation.”

Inside Housing has not been able to identify the freeholder of Paradise Wharf, which has changed hands since it was first developed.

A spokesperson for the Ministry of Housing, Communities and Local Government said: “This development’s application to the Building Safety Fund has been approved.

“Government funding does not absolve building owners of the responsibility to ensure their buildings are safe and they should meet the costs of remediation without passing them on to leaseholders.

“Only buildings which meet the criteria for the Building Safety Fund, as set out in the prospectus, are eligible for funding.”