Grenfell-style cladding will only be removed from a housing complex in Croydon if residents stump up £500,000 or the Government provides funding, a tribunal has heard.
Leaseholders at Citiscape, two connected buildings holding 95 flats in the south London borough, face huge costs after their homes were found to be encased in flammable material.
FirstPort Property Services Ltd manages the development and has gone to a first-tier property tribunal in an effort to make residents pay towards safety works.
It is estimated that the total cost of the replacement will be £2 million, but at least £500,000 is required to strip the cladding.
The management firm claims it was denied a loan by the Royal Bank of Scotland (RBS), which said it would only deal with individual leaseholders, and indicated it will not be covered by insurance.
It is also seeking to recoup the cost of hiring fire wardens to monitor the blocks full time at £4,000 a week – so far running up bills of approximately £128,000 since June 26 2017.
FirstPort regional director Paul Atkinson told the hearing: “We have no other funding options.
“I know we have discussed with RBS – but I wasn’t privy to that conversation – the bank wouldn’t be willing to loan it to us but they would be willing to talk to individual leaseholders.”
Both blocks failed fire tests ordered by the Government in the wake of the Grenfell Tower fire, which left 71 dead last year.
It is suspected unsafe cladding contributed to the inferno’s spread, leading to plans for similar panelling to be stripped from the Croydon development.
An initial survey into the cost of replacing the cladding fell widely short of the eventual expected cost at £500,000, it was heard.
FirstPort hopes to claw the cash back through service charges, but at the time of the deadline for last year – September 2017 – they only had the £500,000 estimate to put to residents.
This means full work to replace the cladding post-removal cannot begin until they formally levy the remaining £1.5 million costs, which will happen this year.
“By getting a very sketchy estimate, Firstport has lost a year in time in being to carry out the work,” Amanda Gourlay, representing leaseholders, said.
Mr Atkinson replied: “In the absence of any other funding options.”
Judge Angus Andrew, who is chairing the panel at the tribunal, asked: “It is an uncomfortable issue – what happens if the money doesn’t come?”
Mr Atkinson said: “It is difficult. We know we don’t have the capacity to loan as much as required.
“We were with the MP for Croydon a few weeks ago urging him to speak to a (Department for Communities and Local Government) minister, which he did.”
The weekly costs of paying for the fire watch will continue to rack up until the point where cladding is removed, the tribunal was told.
Tenants who deal with FirstPort have expressed dissatisfaction with the level of service, it was claimed, with repairs on a lift taking four years to go ahead.
Ms Gourlay said: “Can you understand that the leaseholders have concerns about what will happen to their money if they pay £500,000 now knowing that the working will not start for over a year after the Grenfell disaster?”
Mr Atkinson replied: “I can understand that some leaseholders might worry, but all service charges are kept in the trust.”
Ms Gourlay grilled the company’s health and safety advisor Thomas Smith about the decision to keep the costly fire warden scheme in place when other options were available.
Asked about her line of questioning by the judge, she agreed she was establishing that: “It was unnecessary to have a working watch and they should have put in a fire alarm and, in any event, they didn’t put in the working watching effectively so the costs (being imposed on residents) is unreasonable.”
Local Labour MP Steve Reed, told HuffPost UK: “Leaseholders have been left living in flats with flammable cladding while the courts try to sort out who is responsible for paying for its removal. The builders, owners, managing agents, insurers and leaseholders all deny liability.
“Flawed Government guidance allowed flammable cladding to be put onto residential blocks in the first place. That unsafe guidance is still in place, and flammable cladding is being put on new blocks today seven months after the Grenfell Tower tragedy.
“Since the Government allowed this cladding to go up, they should take responsibility for taking it down, not just from Citiscape in Croydon but from every residential block in the country where people are now living in fear for their lives. And they should immediately revoke the guidance that allows this scandal to continue.”
The tribunal continues.