Stratford Halo: Cladding compensation FAQs

Notting Hill Genesis have reviewed the impact that the cladding works have had on our residents, as the cladding has been removed for six months, NHG will make a compensation offer based on each day without cladding, to the date the cladding is intended to be reinstated.

We will be writing to all eligible residents directly with their offer, along with a memorandum agreement that will need to be signed and returned. The accompanying letter will include details on how to return the documents.

Please see the frequently asked questions below, which could help with your initial thoughts.

1. What factors were considered when calculating the compensation payment?

When creating this compensation offer, we carefully considered the impact on residents from the date the cladding system was removed.

We wanted to make sure that our calculations are fair and reasonable as well as considering all residents regardless of tenure. The offer has been calculated at a rate of 10% of the current daily rent for each day without cladding, to the date the cladding is intended to be reinstated. A further flat payment of £250 is being awarded for the persistent failure to progress the cladding works after a prolonged period (six months).

We are sorry that the works have taken much longer than we expected.

2. What is the premise for payment?

This payment is only in relation to works and delays related to Building Safety Remediation, where cladding has been removed for six months or more.

The outcomes considered were;

1. Where cladding has been removed entirely to one or more facades of the building and the remediation project has not progressed in the six-month period following the removal of the cladding material.
2. Due to no alternative solution being implemented to the building, there has been a loss of heating as a direct result of the material change to the affected external areas of the property.

3. How long do I have to consider this offer?

The offer is open until the works are completed while you remain a resident or leaseholder with NHG. Once the signed paperwork is returned to NHG, we will issue payment within 14 days of receipt of your confirmation of acceptance of the offer.

4. What rights do I have moving forward regarding the remediation project if I accept the payment?

This does not affect any term of your tenancy and you can choose to move at any time. Compensation will only be paid while you reside in the property.

The agreement presented is a final agreement. The purpose of this payment is that Notting Hill Genesis does recognise the impact having reduced cladding and insulation has had on the heat loss to your property. We are sorry this has been for longer than we hoped.

Signing and returning the memorandum does prohibit you from seeking further compensation in relation to the same matter.

5. Who are considered as Home Ownership, Shared Ownership and Leasehold?

Regardless of the percentage of ownership both Shared ownership and Home ownership tenures fall under leaseholders. This has been looked at in regard to ownership rather than equity percentage.

6. Where and how will the compensation amount be paid?

The compensation agreement asks for preferred bank details for the amount to be paid. Part of Notting Hill Genesis compensation policy is that if there are any arrears on the account, that balance will be cleared first, and the remaining paid to the recipients preferred personal account.

We would appreciate all signed agreements returned as soon as possible, as we aim to have all payments processed within 14 days of receipt.

7. I am privately renting my home and my landlord is the Notting Hill Genesis Leaseholder. Will I receive any compensation?

Any compensation will be paid from Notting Hill Genesis to our tenant or leaseholder to whom we have a legal relationship and responsibility to. We will not pay compensation where the tenant and leaseholder does not have a lease agreement with Notting Hill Genesis.

8. What is meant by ‘average market rent’?

When making these calculations no caps applied. Our rents and services teams have provided current market rent valuations via Right Move.

9. Will you go into individual negotiations with residents?

Each individual award has been calculated as stated and there will be no further negotiations regarding the amount offered. We have taken into account the ways in which our residents have been impacted and come up with a fair way to present the offer.

10. Is this compensation award taxable?

The UK tax treatment of compensation/damages payments is complex and highly dependant on your individual circumstances. At this time, we understand that there are three possibilities regarding the tax treatment and we have listed these below. Please seek independent advice on how you may be impacted.

The list below has not been given as formal tax advice.
• The compensation is treated as income subject to income tax;
• The compensation is treated as capital and gives rise to a gain subject to capital gains tax (CGT) (subject to any available reliefs).
• The compensation is treated as capital but is exempt from CGT.

11. Does the number of occupants impact the compensation award?

The award has been calculated per flat/unit and has not been calculated on the number of occupants.

Compensation explained

Following on from the residents meeting which took place on 24th May 2023, we wanted to update you in relation to the common queries that we have received in relation to amendments to the memorandums of agreement that have been sent out to residents.

The memorandums state that NHG will pay ongoing compensation until the remedial works are completed up to a maximum of 18 months from the date of the offer.

NHG are confident that all remedial works can be completed within the 18 month period that has been stated. Once all outstanding works have been completed you will be notified – this is highly likely to be earlier than the 18 month period stated within the memorandum. If (in the very unlikely circumstance) the works take longer than 18 months, NHG will extend the compensation period to the date when the cladding works are complete. If the works were to fail in the future then this agreement would be limited to the date you were notified works were completed – anything after that date would not be covered by the agreement and you would be free to pursue any remedy that you think appropriate.

It is not possible for NHG to have an open-ended memorandum of agreement. Our solicitors have advised us that there must be a cut-off date so we have used the 18 month deadline as a generous cut off date to allow us more than sufficient time to complete the works.

The purpose of the agreement is to reach a compromise regarding the ongoing repairs at Stratford Halo. This compromise is intended to be in full and final settlement of any claims for damages that could be brought against Notting Hill Genesis as a result of the ongoing works. Notting Hill Genesis will not enter into any agreement with you unless it is in full and final settlement.

NHG has assessed the impact the works will have on residents carefully. After considering all the circumstances NHG felt that an award of 10% notional deduction of rent for the period people are affected is a fair and reasonable outcome. NHG will not be prepared to amend or increase the amount of the offer.

The memorandum does not include any internal works that have been agreed between residents and Notting Hill Genesis but these will be completed within a reasonable period of time. If works have been agreed, NHG are happy to confirm in writing to you what works will be completed internally in your property.

The confidentiality clause will not be amended. It allows you to disclose the contents of your agreement to your immediate family (provided they also comply), HMRC and as required by law (e.g. to your solicitors).

We hope this helps address some of the concerns that were raised at the residents meeting. Should you have individual questions or concerns please feel free to reach out to the team and they will assist.

Finally, we would like to remind everyone that there is absolutely no obligation to enter into this agreement and we recommend that you seek independent legal advice from a solicitor or the Citizens Advice Bureau before entering into the agreement as it will be legally binding on you.