The revised Building Regulations cladding regulations (affecting residential property)
You would be hard pressed to find anyone in the property industry (or outside it) not aware of the ever-present and very topical cladding issue in the UK following the devasting events of the Grenfell Tower fire in June 2017.
In response to the Government’s independent review of the Building Regulations and fire safety in the UK by Dame Judith Hackitt during 2017 and 2018, the Building (Amendment) Regulations 2018 (SI 2018/1230) came into force on 21 December 2018. The effect of the Regulations was not really experienced until 2019 / 2020, once the industry had sufficient time to ascertain the scale and impact of the problem and what needed to change. It became abundantly clear that combustible cladding materials would be prohibited in high rise buildings, which would have a massive impact on (1) new builds and (2) also cause the owners of those properties erected with combustible cladding prior to the regulations to seek to undertake very costly remedial works programmes to ensure the safety of the occupants.
Cue scramble (aka the Review process via Form EWS1)
A review process was initiated to determine whether properties (new and old) would be the subject of the regulations. This was to deal with the reticence of lenders to lend money, unless they were fully aware of the combustibility of the external cladding of the building. As per RICS, “The External Wall Fire Review process will require a fire safety assessment to be conducted by a suitably qualified and competent professional delivering assurance for lenders, valuers, residents, buyers and sellers.”
If combustible cladding is clearly present from desktop analysis then to ensure that the building is compliant with the current Building Regulations and safe for human habitation, remediation works should be scheduled. Alternatively, a visual and even at times intrusive test may be required.
The ramifications of cladding being present
Once combustible cladding is identified, it needs to be remedied / removed. The circumstances and requirements attaching to that remediation work can swing massively from building to building, where some new build designs (pre-completion) can be redesigned and combustible materials substituted with non-combustible ones, whereas some older properties may require more extensive works and therefore longer lead time for remediation works to be completed. The industry has recorded:-
- thousands of new-builds incapable of being signed off as build-ready and pushed back a large volume of completions, pending resolution;
- a disproportionate increase in service charges / major works costs to remove the combustible cladding (where insurers are unwilling to cover the costs of the defect);
- in some cases this has resulted in leaseholders having no choice but to move out of their properties and subsequently losing thousands and thousands of pounds; and
- some management companies are so concerned that they have installed round the clock ongoing fire patrols (known as “waking watches”).
The latest position
The aforementioned draconian effects have led to recent Government intervention to confirm that “Owners of flats in buildings without cladding will no longer need an EWS1 form to sell or re-mortgage their property – thanks to an agreement reached … on 21 November 2020 between the government and the Royal Institution of Chartered Surveyors (RICS), UK Finance and the Building Societies Association (BSA)”.
Cue an audible release of breath from the occupants of those buildings, which are not covered in or affected by combustible cladding.
The Housing Secretary (on 10 February 2021) confirmed to the House of Commons that the government will fully fund (to the tune of £3.5BN+) the cost of replacing unsafe cladding for all leaseholders in residential buildings 18 metres (6 storeys) and over in England.
The Government has now assigned a remediation structure to the problem with financial assistance … but for those buildings which are deemed to fall within the Regulations, remediation works may take many years (and hold up a large volume of sales and assignments). The same will apply for the remediation programmes for buildings that do not fall under Building (Amendment) Regulations 2018, but are but are deemed to contain combustible cladding materials.
If you are affected by the revised Building Regulations (either as a landlord or tenant) please contact our real estate or construction team for advice.