A tragedy waiting to happen, the fatal blaze at Lakanal House in Camberwell caused a national outcry when initial reports speculated that the local authority owned block had no central fire alarm or sprinkler system, despite the fact that the 14-storey 1960s tower only had one central means of escape.
Unlike office buildings, building regulations for residential blocks do not stipulate that a secondary means of escape is needed, but the tragedy – and ongoing investigation – has prompted knee-jerk upgrades to blocks of flats across the country. The question is – who should pay for it?
For buy-to-let investors who own leasehold flats, inflated service charge bills for fire safety works are coming in thick and fast. While nobody wants their tenants to live in an unsafe property, there is increasing evidence that local authorities and freeholders of large blocks are not handling the process properly, and in some cases may even be profiteering from the scare.
"The report on the Lakanal tragedy has been so long coming, and the basic problem is that 99 per cent of residential blocks do not have a secondary means of escape," says Roger Southam, managing director of Chainbow, which advises landlords and tenants on leasehold issues, block management, and reclaiming incorrect service charges.
"Business has boomed in the area of service charge over-charging and related mis-management," he reports. "In the last couple of years, we've had the odd job here and there. In the last 12 months, we've been instructed on 20 jobs, mostly for groups of leaseholders."
Landlords of flats are being saddled with unexpected service charge bills - in some cases 100 per cent more than the usual cost - due to fire safety upgrades which have been rushed through. Local authorities have been particularly quick to upgrade ageing residential stock, signing onerous contracts with private firms, many of which have not been subject to the usual legal checks and balances.
Normally, leaseholders of flats will receive a Section 18 or Section 20 notice indicating that "major works" are to be carried out, and will have the opportunity to scrutinise the procurement process and comment on the works. However, much of the works being carried out in the name of fire safety have not adhered to these rules. This gives leaseholders an opportunity to challenge enormous and unexpected bills from freeholders (see below, Charges for Landlords).
"It's down to chance that this fire was in a local authority owned building rather than a private block," Mr Southam says, noting large numbers of modern tower block that sprung up in the noughties buy-to-let boom. "In the public and private sectors, leaseholders are being dumped on, and often are too scared to take legal action as this entails even more cost," he adds.
In the absence of an official report on the Camberwell fire, and precious little government guidance on how blocks should be made safer, the situation is very unclear. Some housing experts foresee it could take two years for the police investigation into the fire to finish.
"The only conclusion I can draw is that there is a disagreement over the severity of the reaction," says Mr Southam on the continued delays. "Having a staircase which snakes around the central core of a lift shaft is a very cost effective way to build a block of flats, but from a safety point of view leaves a lot to be desired."
If it is recommend that residential building regulations are changed going forwards, such a move is unlikely to be made retrospective. "On most sites, it is physically impossible to install a secondary escape," Mr Southam adds. "This could result in a two-tier system with buildings that can be adapted, and those that can't – and a knock on for valuations as a result."
