Caught in a trap you can’t get out of
The building safety scandal has created thousands of victims including Dan Rutter whose story shows how unjust and unfair the Government can be. Sharon Dale reports.
IT was Valentine’s Day 2022 and Dan Rutter and his partner had fallen in love with the idea of saying goodbye to renting and hello to home ownership in central Leeds. They had booked to view a flat for sale on the most romantic day of the year but it wasn’t a perfect match.
“We asked the estate agent if there were any flats for sale in The Chandlers, the apartment building we liked and were renting in,” says Dan.
“The next day, he rang and said the sale of a two-bedroom flat in The Chandlers had fallen through and would we like to view it.”
He describes feeling lucky and excited at the prospect of owning a home exactly where he and his partner wanted to be but that elation was short-lived.
Dan has since suffered a breakdown and now takes medication to help him cope with acute anxiety that meant he was unable to sleep or concentrate and was plagued by fear due to unwittingly and unfairly inheriting the title “non-qualifying leaseholder” and all its devastating financial implications.
A non-qualifying leasehold homeowner, in terms of the building safety scandal, is anyone who has a flat that is or was owned by someone with three or more rental properties in the UK.
That non-qualifying status is attached to the apartment in perpetuity even though subsequent buyers may be owner occupiers not investors. This has effectively blighted thousands of flats leaving them unsaleable.
While qualifying leaseholders are protected by legislation from paying to remove dangerous cladding, with caps on some bills for other safety remediation work, non-qualifying leaseholders have no protection and must foot the bill with all costs, apart from cladding remediation, uncapped and limitless. This could run into hundreds of thousands of pounds.
Remortgaging is also an issue even when a building has been fully remediated.
Dan and his partner did their due diligence when buying and knew the building had some combustible cladding designated “low risk” with the cost of its removal covered by the Government remediation scheme.
What they weren’t aware of is that, on getting the keys to their flat in early May 2022, they inherited non-qualifying leaseholder status. This was not flagged up during the conveyancing process as it was not standard information and was not readily available to have or request when they bought.
The Building Safety Act 2022 that created the non-qualifying category was enacted at the end of April 2022. Dan’s purchase was also before the Leaseholder Deed of Certificate, introduced in July 2022, which identifies whether an apartment owner is liable to contribute to building safety costs and if so what their maximum contribution will be.
It was only after a fire safety survey on the apartment complex that Dan and his partner discovered that they inherited the non-qualifying leaseholder status.
Dan, 31, who chairs his building’s residents association, says: “We had no awareness of this status before we bought the flat and we were told the building was low risk but it has since been re-categorised as high risk.
“The building will cost hundreds of thousands of pounds to remediate and, while we have been told we will be protected from cladding costs, we do not qualify for help or capped costs on the non-cladding remedial fire safety work that is needed.
“I don’t know what this cost will be, I don’t know when I will be charged and how quickly I have to pay. If there are more problems I’ll have to pay again and again.
“Other leasehold flat owners have caps on what they pay. We can only hope the Government helps us out of our terrible situation. I just want, which should be my right, to be a qualifying leaseholder and be protected so I can live my life without fear, anxiety and discrimination.”
Dan adds: “Our plan was to get married and move to a bigger home and have children but I feel like this has taken that away.”
Maggie Brodie, co-leader of the Non-Qualifying Leaseholders campaign group, wants non-qualifying status abolished and says: “In Dan’s case the government says he could have identified the non-qualifying status of the property in April/May via the Land Registry but that was not the case.
“The question of whether a property is owned by a non-qualifying leaseholder was not on any form then. Dan’s purchase was also before the Leaseholder Deed of Certificate, which means you have to show a property is your principal home, and the Landlord Certificate, if you are an investor.
" These were not introduced until July 20, 2022. The Law Society didn’t clarify the change until the following year.”
We asked the Department for Levelling Up, Housing and Communities for a response but this did not address the specific concerns put to them. The second response was “no comment”.
Dan and his partner are being supported by Leeds central MP Hilary Benn who says: “Mr Rutter and his partner have been caught in a nightmare that is not of their making. Theirs appears to be a unique case and, leaving aside the wider question of policy on non-qualifying leaseholders, ministers should look to help them out of this trap. I will be raising the matter with Michael Gove."