One way in which the Government has sought to protect leaseholders from responsibility for meeting the costs of remedial work was the creation of the Building Safety Fund ("the BSF") to which the Government committed £1 billion to fund the remediation of unsafe non-ACM cladding in residential buildings higher than 18 meters. The Fund was reopened for new applications on 28 July 2022, but still limits applications to buildings higher than 18m, as discussed in our previous article https://realestate.howardkennedy.com/post/102hueu/the-building-safety-fund-reopens-for-applications .
What is the Medium-Rise Scheme?
On 30 November 2022 the Government announced the launch of a pilot-scheme to be delivered by Homes England for buildings between 11-18 meters in height ('medium rise'). Where a developer responsible for the defects cannot be identified, the Medium-Rise Scheme ("MRS") will allow leaseholders access to funding to pay for certain works. Homes England have identified a small number of buildings whose need for funding has been prioritised based on factors such as interim evacuation measures being in place and the type of material on the external walls.
What will the Medium-Rise Scheme (MRS) cover?
Works to 'eligible medium-rise buildings' will be covered where a responsible developer cannot be identified and where a Fire Risk Appraisal of External Wall (FRAEW) following the PAS 9980 methodology has recommended action to address life safety risks associated with the external wall systems.
At present, the Responsible Entity (which is usually the freeholder, head leaseholder or right to manage company) for medium rise buildings is being encouraged to contact Homes England so that the latter can gauge how many buildings might be eligible for the scheme. Funding is being raised through the Building Safety Levy which is charged to developers of new residential developments. The Government anticipates it will raise an additional £3 billion to cover the cost of remediating defective buildings between 11-18m tall.
The factsheet released by the Government states that the wider roll out of the MRS will commence in 2023 when further details regarding eligibility for funding and the application process involved will be published and the Responsible Entity of eligible buildings will be invited to apply.
If you need advice on whether your building might be eligible for MRS funding or require assistance in drafting or negotiating appointment documents for remedial works to the building, please contact Bhavini Patel and Mark Pritchard, the joint Heads of Howard Kennedy's Building Safety Group.
This blog is part of a series published by Howard Kennedy LLP on the Building Safety Act. For other blogs, please click here.
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