Leaseholders are experiencing many and varied problems caused by concerns about fire safety, particularly with regard to the external wall systems on their buildings. This update touches on some recent developments.
– Government support to leaseholders
– Government funding to end Waking Watch
– New EWS guidance for valuers
– Chalcots Cladding Replacement
– Cromer Street Cladding Replacement
– Fire Risk Assessments
Government to support leaseholders with cladding replacement costs
In February 2021 leaseholders in residential buildings 18 metres and over (typically 6+ storeys) received the welcome news that the Government would fully fund their share of the costs where unsafe cladding of any type had to be replaced.
The Government also announced limited support for leaseholders in buildings between 11 and 18 metres high (typically 4 and 5 storeys) that require the removal of unsafe cladding. These leaseholders will be able to get a Government loan to pay for their share of the costs, with monthly repayments capped at £50.
The Government has announced a number of recent funding investments to promote cladding remediation, totalling to £5 billion, namely:
- May 2018 – £400 million (the Social Sector ACM Cladding Remediation Fund) to encourage social sector landlords to urgently replace ACM cladding on residential buildings that are 18 metres and over;
- May 2019 – £200 million available to private sector landlords for the same purpose;
- May 2020 – £1 billion (Building Safety Fund) to cover leaseholder costs for the remediation of unsafe non-ACM cladding on residential buildings that are 18 metres and over.
- February 2021 – £3.5 billion to cover leaseholder costs for the remediation of all unsafe cladding on buildings that are 18 metres and over.
Government funding to end Waking Watch
In December 2020 the Government set up a £30 million ‘Waking Watch Relief Fund’ to pay for the costs of installing an alarm system in buildings over 18 metres with unsafe cladding – a fund to cover the amount of expenditure that would otherwise be charged to leaseholders.
The purpose of the fund is to enable costly Waking Watch measures to be replaced by an approved alarm system in buildings waiting to have unsafe cladding removed. Landlords who apply for funding will have to satisfy the criteria that waking watch costs have been passed to leaseholders and the costs of installing an alarm would fall on leaseholders.
External Wall Systems (EWS) Fire Safety Checks – New guidance for valuers
New guidance published by The Royal Institution of Chartered Surveyors (RICS) aims to significantly reduce the number of buildings for which mortgage lenders will require External Wall System (EWS) fire safety checks and provision of the EWS1 form.
Following the Grenfell tragedy In December 2017 the Government announced a number of reforms designed to improve fire safety in high rise multi-occupied buildings, including the Building (Amendment) Regulations 2018 which prohibit the use of combustible cladding in buildings over 18m.
In December 2019, intending to give confidence to lenders and provide valuers with a uniform approach, the RICS introduced the EWS1 form to record “in a consistent manner what assessment has been carried out for the external wall construction of residential apartment buildings where the highest floor is 18m or more above ground level or where specific concerns exist”. Some lenders insisted on the form for all multi-occupancy buildings, even where there was no cladding. Significant delays resulted due to there being insufficient persons suitably qualified to inspect and complete the form, as well as qualified professionals finding it difficult to secure appropriate professional indemnity insurance.
Camden Council has declined leaseholders’ requests for an EWS1 form where the building is less than 18 metres. Camden published a statement giving its reasoning, principally that lenders should not require an EWS1 form for those buildings (based on RICS guidance – now obsolete) and that it cannot justify spending £12,000 to obtain one. It is expected that Camden will now wish to review this position.
In January 2020 the Government published consolidated advice for owners which extended fire risk concerns to buildings of any height. More lenders started requiring form EWS1 to be used for all multi-storey buildings further blocking flats sales.
In November 2020 the RICS, Government and lenders’ representative bodies (UK Finance and the Building Societies Association) announced an agreement that an EWS1 form should no longer be needed for sales or re-mortgages on flats in blocks which have no cladding. After further
consultation the RICS has prepared new guidance.
New RICS Guidance
The RICS has issued a new guide for valuers, titled ‘Valuation of Properties in Multi-storey, Multi-occupancy Residential Buildings with Cladding’. This comes into effect on 5 April 2021. It provides criteria to help identify which buildings, depending on the number of storeys and type of EWS, should require an EWS1 form. The guidance reflects the fire safety concerns of the Government’s Expert Panel, particularly with regard to cladding comprising of aluminium composite material (ACM) and other metal composite material (MCM) cladding, as well as those involving high pressure laminate (HPL) panels.
The RICS guide recognises three categories: buildings up to four storeys, buildings with five or six storeys and buildings over six storeys. The guide includes helpful case studies and a decision tree.
With regard to buildings of up to four-storeys, the new RICS guidance is that an EWS1 form should only be required where there is ACM, MCM or HPL cladding present. Therefore, lenders should not require an EWS1 form for buildings which do not have this type of cladding – good news for leaseholders who are wishing to sell or re-mortgage properties in such buildings. However, the RICS guidance is not statutory and its adoption will rely upon the risk attitude of each mortgage lender.
Chalcots Cladding Replacement
The Council has recently applied for planning permission (2021/0191/P –PlanningSearch) to re-clad the five towers on the Chalcots Estate.
The original ACM cladding has been removed from all towers and the employment of the contractor, Wates, has been terminated.
It is reported that the contract for the 4,000m2 recladding of the 19-storey Blashford Tower, originally estimated to be worth £22 million, will be re-tendered in April 2021 under a 2-stage design and build procurement. Construction is expected to start in August 2021 and may take 80 weeks.
The other four towers (Bray, Dorney, Taplow and Burnham) are expected to be re-tendered in May 2021 with construction commencing in November 2021.
At the end of 2018 Camden secured £80 million funding from the Government and has undertaken to make up any shortfall from Council funds. Leaseholders will not be charged for replacing this cladding.
The Camden website has a dedicated Chalcots residents’ support page here.
Cromer Street Cladding Replacement
The Council has also applied for planning permission (2020/5866/P – PlanningSearch) to re-clad the towers on the Cromer Street Estate in King’s Cross. Comments may be submitted until 23 March.
The Council intends to replace the non-ACM combustible external wall insulation system and rain screen cladding on the eleven tower blocks, namely Bedefield, Bramber, Chadswell, Gatesden, Glyne Reach, Greencroft, Hollisfield, Mulletsfield, Northiam, Peperfield and Sandfield. All of the towers are over 18 metres height.
This project follows and implements an application for a grant from the Government’s Building Safety Fund to cover the costs of the works for leaseholders, an application with which the Forum has been involved.
Fire Risk Assessments
As landlord, Camden Council, has a legal duty to carry out fire risk assessments on any of its buildings which have shared communal areas. The fire risk assessment looks at how safe a building is, what the fire risks are, and gives recommendations on how to improve fire safety. The recommendations must be acted upon to ensure the highest standard of fire safety. Leader of the Council Georgia Gould has committed to publishing fire risk assessments (FRAs) for all purpose built blocks in the interests of resident safety and transparency. FRAs published so far are available here on the Camden website.
In response to Freedom of Information requests for information about fire safety, Camden published an FOI statement which opens with “London Borough of Camden has received a very large number of FOI requests about tower blocks, fire safety and related issues. Due to the volume of requests and their overlapping nature, we have provided a composite response to all questions asked. If we consider your response is covered by the information within this document we will refer you to it.” The statement includes a list of buildings of 6 floors and over, giving the date of the last FRA.