Background to the cladding crisis
Back in 2017, in the aftermath of the Grenfell Tower tragedy, the government launched its Building Safety Programme with a grand fanfare, promising to ensure that residents in high-rise residential buildings -
“are safe - and feel safe - from the risk of fire, now and in the future.”
It is now more than four years since the fire and time to ask whether the government has lived up to its high (-rise) aspirations. Not according to those leaseholders who are facing individual bills of up to £115,000 for the removal of unsafe cladding from their buildings. All homeowners face unexpected bills but the costs of removing unsafe cladding are on a different scale altogether. Remediation work is complex, time-consuming and expensive. It involves removing the cladding, or the insulation, or both, and/or remediating defects in the cavity barriers.
What is cladding and why is it dangerous?
In the last couple of decades, new blocks of flats have been designed with exterior finishes made of rainscreen panels that sit on a metal or wooden frame with a cavity and insulation behind. These systems form an integral part of the exterior wall. In some cases, cladding has been added to older blocks to improve insulation and appearance. In a fire, the cavity can act as a chimney. Grenfell Tower was clad with aluminium composite material (‘ACM’) cladding which was later found to have no flame retardant properties. Combined with a type of insulation that was only suitable for use with non-combustible cladding, and a faulty fridge-freezer in one of the flats, the resulting deadly cocktail claimed 72 lives. Some types of non-ACM cladding (high-pressure laminate cladding) have since been tested and also found to be unsafe.
Buying a property with cladding
When buying any residential property, your conveyancer will ask the seller for copies of all relevant building regulations consents (approvals or certificates). However, by and of itself, a consent will not tell you whether an external wall system (‘EWS’) presents a fire hazard because the Building Regulations did not restrict the use of combustible cladding in residential blocks until December 2018 and even now the restrictions are limited in scope.
Another reason why you cannot rely solely on building consent is the evidence that has come to light during the Grenfell Tower public inquiry, revealing that local authority building inspectors and approved inspectors (the private sector equivalent) who issued building certificates to confirm compliance with the Regulations have been less than meticulous in carrying out their duties, so a certificate is no guarantee of safety.
Selling a flat with cladding
If you own a flat in a building with unsafe cladding, then you may have difficulty finding a buyer in the current climate. This is partly due to something known as the EWS1. In 2019 nervous lenders started seeking assurances about the safety of external wall systems as a condition of approving mortgage applications. This lead to the development of a certification process by the Royal Institute of Chartered Surveyors (‘RICS’) involving a fire safety assessment by a suitably qualified professional who confirms whether a building is safe using a Form External Wall System 1 (EWS1). An EWS includes all the components of the outside wall of a building, including the insulation, the cladding, and the fire break systems. The EWS1 certificate is valid for the entire building for five years and it can be used by any flat owner in a block of flats to prove the safety of the building to insurers, mortgage lenders, and potential buyers.
However, it can only be commissioned by building owners, not individual leaseholders, and initially, instead of unlocking sales, the EWS1 became a problem in its own right. The RICS had only intended it to apply to high-rise blocks above 18 metres in height and only to blocks with some form of combustible cladding or combustible material on balconies. But lenders took a more cautious view and some began insisting on an EWS1 certificate on a much wider basis. Thankfully in April 2021, the RICS issued new, narrower guidance aimed at reducing the number of buildings that should require the certificate. Welcome as the new guidance is, lenders do not have to adhere to it and a few remain wary. There is also a nationwide shortage of suitably qualified surveyors to carry out the surveys, although the government has announced funding to train more professionals rapidly.
Leaseholder challenges
Where remediation works have been, or are being, carried out to make buildings safe, many landlords have sought to pass on their costs to their leaseholders. Some leaseholders have challenged their bills in the Property Tribunal but in most cases, the landlords’ claims have been upheld. This is because most residential leases include an all-encompassing service charge that allows them to recover costs incurred in maintaining the common parts of a building, no matter how unusual or unexpected. The Tribunal simply interprets the lease: it cannot make policy decisions about whom to blame or what is fair.
Not just cladding
There are many costs facing those unfortunate enough to live in buildings with unsafe EWSs. Fire safety in tower blocks is no longer a single issue, as an increasing number of other fire hazards has been identified during post-Grenfell inspections. Many buildings present a fire risk because of missing fire barriers in some of the cavities. ‘Compartmentation’ is the term used to describe measures that help to ensure that fire cannot spread from the point of fire origin (within one compartmented flat) to common areas such as landings, staircases and communal rooms, or through hidden areas of potential fire spread such as concealed voids, ducts, lifts and service risers.
Other potential costs include: paying for expensive waking watches and increased insurance premiums; updating fire alarm and sprinkler systems; and the relentless emotional costs reported by many residents living in unsafe buildings, who fear another Grenfell tragedy if remedial works are not carried out, and bankruptcy and/or loss of life savings if they are.
Why isn’t the government paying to remediate all dangerous buildings?
A very good question. After all, the independent Review of Building Regulations and Fire Safety, established in the aftermath of the Grenfell Tower inferno, described the UK’s building regulatory system as complex, confusing and ‘not fit for purpose’, so surely the government should pay to fix a problem created by its own failure to properly regulate the construction industry? However, since then, the coronavirus pandemic has seen the UK’s budget deficit spiral to around £355 billion, the equivalent to 17% of GDP and a peacetime record, which partially explains why the government is dragging its feet and keeps insisting that the burden should not fall on the tax-payer. Leaseholders trapped in unsellable flats facing enormous bills would beg to differ.
In our next article, we look at the vexed issue of funding and who should make up the shortfall.
This area of law is highly complex so if you would like individual advice about buying or selling a property with cladding, or about service charges, please contact Deborah Caldwell.
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