Unfortunately getting to a point, where every single building which has potentially dangerous cladding on it, or any other potentially flammable external wall system, is made safe has been much more difficult than perhaps any of us would have thought or liked.
Complications around who is responsible for the cladding and who should pay for its removal are numerous across a large number of buildings and I have nothing but sympathy for those leaseholders who feel completely powerless and in limbo because of this situation.
High stress situation
The stress this is causing is obvious, not just in terms of the money required to sort out high-risk buildings but also in terms of the requirements for an External Wall System (EWS1) form.
Who can provide this, lender acceptance, and what this means for mortgage availability, pricing, not to mention service charge rates, are all critical hurdles.
We’re acutely aware of the frustration that advisers and their clients are experiencing when it comes to securing an EWS1 form, getting the freeholder to agree to one being carried out, and lender requirements to have this upfront before any lending decision can be made.
In certain areas we have already secured some common sense amendments to former rules.
For instance, owners of flats or apartments in buildings which don’t have an external wall system and the external wall is brick now don’t need an EWS1 form in order to sell or remortgage.
Given organisational and resource issues around securing an EWS1 form for those who have flats with cladding, it made no sense to require one for those that don’t and was simply another obstacle in the way for those trying to sell or remortgage.
Agreement between the Royal Institution of Chartered Surveyors (RICS), UK Finance and the Building Societies Association (BSA) should, we are led to believe, benefit over 450,000 owners who might have been impacted otherwise.
But we also know that there are hundreds of thousands of others who will not be as fortunate, and their ability to remortgage or sell their existing property is being severely compromised by the current rules and situation.
Shockingly there are only approximately 300 fire safety inspectors qualified to issue an ESW1 and perhaps.
Even more shockingly, the lease administrators can ask them not to publish the EWS1 if it realises that the system requires work, for example not being fire safe.
What the CA has tried to do is provide our member firms with practical guidance on cladding to help steer them and their clients through what they should be looking for in these cases and how they should be advising clients and their lenders.
It is not a simple task, however, and with different lenders having differing rules about what is acceptable to them, there is clearly a role for advisers in helping hold the client’s hand if they are in this unenviable position.
The CA Guidance has now been issued to all our member firms but with a new building safety regulator being set up next year, there will undoubtedly be changes to the rules that will need to be reflected in updated guidance.
We would advise all stakeholders involved in these cases to take extra care – there have been changes and a degree of misinformation which often results in extreme stress and frustration being heaped upon a client who is often already feeling damaged by their situation.
For the home mover?
We would advise before listing the property that anyone thinking of selling should ask their lease administrator whether there is an external wall system and if so ask to see the ESW1 form.
If it is not available ask them to get one done.
For buyers, they will want to ask whether the EWS1 has been prepared and to see it to understand whether remedial works are required and the potential cost to them if they buy the property.
By working together we can help, but we’ll need to set out realistic goals about what might be achievable in the current environment, otherwise we may all end up disappointed.