FIRE defects and other issues at a 29-storey residential tower and surrounding blocks in Swansea could finally be resolved after legal action and years of stress for leaseholders.
It’s expected the work at the Meridian Quay development in Swansea Marina will cost tens of millions of pounds and be funded by the Financial Services Compensation Scheme (FSCS) – an independent scheme which protects consumers when financial companies fail.
One flat owner described the complex situation as “an absolutely tortuous battle which has affected people mentally and financially” and left flat owners unable to sell.
The 291-flat Meridian Quay comprises the 107m Meridian Tower, six adjacent blocks, and eight commercial units and was built just under 20 years ago.
Now the leaseholder-owned company responsible for management, maintenance, and repairs at Meridian Quay has submitted two applications to Swansea Council to rectify a range of issues including combustible or defective cladding, windows prone to “spontaneous breakage”, noise and condensation, defective balconies, and combustible wooden decking.
A planning statement said in addition to these external defects Meridian Tower has been identified as having “defective internal passive fire compartmentation to both apartments and communal areas” and the other blocks had the same problem for communal areas.
The leaseholder-owned company, Meridian Quay Management Company Ltd (MQMC), said discussions to appoint a preferred contractor were ongoing and that it expected work to start next year.
An MQMC spokesman said it had successfully led building warranty insurance recovery processes in relation to the defects, that costs to leaseholders would be minimal, and that the work would be funded by the FSCS.
Asked by the Local Democracy Reporting Service if MQMC considered the fire defects identified as defects from the outset or defects following any changes to fire safety or building regulations he said they were “inherent construction defects”.
A developer called Ferrara Quay Ltd was behind the Meridian Quay project. It secured planning consent from Swansea Council at the end of 2004. The main contractor was Carillion and it built the development between 2006 and 2010. Both companies are no longer trading.
Leaseholders needed building warranty cover notes that were issued by insurance company Zurich to be able to proceed with their purchase.
After leaseholders became aware of fire defects action was taken against Zurich and another insurance provider called East West Insurance Company to whom Zurich had reportedly transferred many of its liabilities prior to East West going into administration.
Leaseholders alleged that although they received the cover notes Zurich surveyors who inspected Meridian Quay hadn’t carried out final inspections of their flats and the communal areas. Zurich strongly denied liability.
A high court judge made rulings in 2021 and 2022 about aspects of the case before a trial was due to take place.
Outlining the leaseholders’ complaint in the 2022 ruling the judge said the claim against Zurich was for damages for deceit and that damages being claimed exceeded £25m.
“In a nutshell the claimants say that they were induced to purchase their flats by fraudulent misrepresentations that were contained in cover notes issued by Zurich to the effect that the flats in question had been given a final inspection by Zurich’s surveyor and that the final inspection was satisfactory whereas in fact the flats had not been inspected and any inspection would have shown that their condition was far from satisfactory,” the ruling said. “The claims are strongly contested.”
In the same ruling, which concerned the costs of an application by Zurich to strike out witness evidence, the judge said the company should pay 75% of the claimants’ costs and described its action as “fundamentally inappropriate”. He added: “That does not mean that no part of it had merit. If one makes hundreds of points there are almost bound to be some good ones. That does not show that the application was justified.”
The 2021 ruling related to disclosure issues and the judge said they should be limited to two matters: what factors were taken into account when Zurich engaged in a redundancy process in relation to its new home warranty business or determined the staffing levels for the business division and whether the company assessed the ability of the new home warranty business division to carry out inspections of developments and what was the assessment of that ability by Zurich.
The case was settled out of court before the trial took place in 2022 and the legal claim was withdrawn.
Phil Lake lives in the 29-storey tower, which has a top-floor restaurant, and said it was a great place to live. “It’s so convenient and you’ve got incredible views,” he said. “But it should be so much better.”
Like other owners he became aware of the fire and other defects before deciding to successfully bid for the head lease for Meridian Quay at auction in 2019.
“I was living there and thought: ‘If anyone can sort this out I can’,” he said.
Mr Lake said he arranged fire wardens at the site. The fire alarm system, he added, had been upgraded.
Reflecting on the saga Mr Lake said: “It has been a battle, an absolutely tortuous battle, which has affected people mentally and financially.
“You’re talking about people’s retirement – people have saved all their lives to live here. But the property values have decreased and been unmortgageable.”
Mr Lake said he’d hoped the case would go all the way to trial and he was supporting flat owners in similar situations. He is also calling for a public inquiry and believed high-rise buildings in Wales should be inspected by two independent surveyors.
Mr Lake said Meridian Quay would be “a building site” for some time assuming the remediation work was given the go-ahead and felt flat owners should pay reduced council tax.
A Zurich spokeswoman said the matter was settled in 2022 and the claim was withdrawn. “We are unable to comment any further,” she said.
Zurich also described the council as having sole responsibility for building regulation inspection and certification and said the building was officially recognised as meeting standards.
Swansea Council said its building control department issued a completion certificate for Meridian Quay in 2010. A spokesman said: “The responsibility and legal duty to ensure full compliance with the building regulations sits with the building owner and developer.”
The FSCS, which is funded via financial services industry levies, said it will pay compensation on valid claims made by eligible Meridian Quay insurance policyholders in line with its rules.
Asked if it could potentially look to reclaim some or all of those costs an FSCS spokeswoman said: “Where we do pay compensation we will also look to recover costs where it is reasonably possible and cost‑effective to do so.”
The Local Democracy Reporting Service also asked Mid and West Wales Fire and Rescue Service if it was aware of fire defects at Meridian Quay and if had contingency plans in place, for the tower especially, in the event of fire.
The service said it was aware of the fire safety remediation works being undertaken at the complex. It said has liaised with those responsible for the premises and continued to monitor progress in accordance with its enforcing role under the relevant legislation.
