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Insurer agrees to meet costs for Grenfell style defective cladding

United KingdomScotland
19/07/2018
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Last week brought positive news for leaseholders of flats in buildings covered by Grenfell style ACM cladding as NHBC agreed to meet the re-cladding costs pursuant to the building’s insurance policy.

NHBC confirmed that it will meet the costs of replacing the defective cladding at the New Capital Quay development in Greenwich pursuant to a 10-year warranty, which included cover for building defects. It said that following an investigation, including a review of the individual circumstances of the site, and having obtained expert advice, this had led them to conclude there had been a failure to comply with building regulations at the time of the construction and it would therefore meet the necessary remediation works to make the building safe.

NHBC had signed off on the development in its role as a building control body. However, they believe that the primary legal responsibility remained with the developer Galliard Homes as the party responsible for ensuring compliance with building regulations.

The decision followed threats by leaseholders to bring a class action against both NHBC and Galliard Homes.

NHBC emphasised that the decision at New Capital Quay would not set a precedent for any similar claims and that it would assess all future claims on their merits.

Landlords, tenants and developers will watch with interest to see if other insurers follow suit in circumstances where one year on from Grenfell, a significant number of residential and mixed use developments have been identified as having defective cladding leaving parties locked in disputes over liability.


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