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Building owner to add three storeys to ACM-clad building to pay for remediation work
The owner of a block wrapped in the same type of dangerous cladding as that used on Grenfell Tower is planning to extend the building to pay for remediation work.
Betterpride, which owns the Premier House block in Edgware, north London, claimed it is taking the action after government funding rules left it with a £1m shortfall.
A planning application has been submitted by Betterpride to extend the building, which is still covered in aluminium composite material (ACM) cladding more than three years after the Grenfell Tower fire.
Betterpride was recently ‘named and shamed’ by the government as one the 14 companies that owns buildings where ACM remediation work is yet to begin.
While the government has agreed to provide funding to Betterpride to cover the ACM remediation costs, the firm said there is currently a £1m gap due to rules restricting the maximum amount of state aid that can be provided to individuals.
The government will not provide its funding until a building contract is signed, however Betterpride said it cannot enter into a contract until the funding shortfall is resolved.
The problem stems from the fact that three of the affected leaseholders are professional landlords who between them own 30 flats in the 14-storey block.
Each leaseholder can only receive a maximum of €200,000 due to European Union state aid regulations that applied when the government’s private sector ACM remediation fund was first established.
According to Betterpride, the rules mean the government has only agreed to provide roughly £3.8m, despite the work the replace the ACM cladding having been estimated to be in the region of £4.8m.
A government source told Inside Housing that ministers are now considering the implications of the UK’s post-Brexit subsidy control regime and will update applicants to the fund shortly.
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In its planning application to Barnet Council, Betterpride said work to replace the ACM cladding cannot commence unless the landlord leaseholders agree to make up the funding shortfall or a decision is made at a tribunal.
As the tribunal process is estimated to take in the region of 12 to 18 months, Betterpride has suggested extending the building as an alternative way to make up the funds.
The proposal would see three storeys, comprising 21 new homes, added to the top of the block and the surplus profits being used to forward finance recladding work.
Betterpride has said that if it manages to recover costs from the three professional landlords, the surplus profit will be put towards refunding leaseholders for the additional service charges that have been levied on them since the issues with the buildings were first discovered.
Since 2018, leaseholders at Premier House have contributed roughly £4,000 each to a 24/7 waking watch and retrospective work such as additional fire compartmentation.
“In the unique circumstances, this is considered to be the most equitable use of surplus development profit, which may otherwise have been directed towards affordable housing,” the planning application said.
The development will not deliver affordable housing despite the London Plan dictating that all developments of 10 or more new homes should provide some level of affordable housing.
Premier House was converted from an office to a residential building in 2014/15 under permitted development rights.
The building was bought by Betterpride from the previous owner in spring 2017, shortly before the Grenfell Tower fire.
Betterpride declined to comment.
Clarification: The original version of this article said that the government has provided Betterpride with £3.8m in funding to cover remediation costs. It has been updated to make it clear that while Betterpride has been allocated the funding from the government, it has not yet received any money. Betterpride has said the government will not provide this funding until Betterpride has entered into a building contract, which Betterpride says it is not yet able to do so until the issue of the funding shortfall is resolved.
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