The metal cladding used on the block of flats at Grenfell Tower was found to have played a significant role in the spread of the fire in which 72 people died.
Since the disaster at Grenfell, there has been much controversy over the issue of cladding, in particular with respect to who is responsible for paying for remediation work on buildings with similar cladding in place.
Some freehold owners of multi-let residential buildings are seeking payment from their leaseholders for cladding remediation work, leaving many tenants unable to meet the additional cost in service charges.
Meanwhile the owners of individual flats in multi-occupied buildings find themselves unable to pay for the works or sell their properties – the values of which have, invariably, fallen as a result.
What constitutes cladding?
Cladding is a ‘method of enclosing a building externally by the attachment of finishing materials spanning between given points of support on the face of the building.’ The material types together with their fixings which can be considered as cladding include:
- Aluminium composite material (ACM)
- Brick slips
- High pressure laminate (HPL)
- Metal composite material (MCM)
- Metal sheet panels
- Rendered external wall insulation system
- Tiling systems; and
What action has been taken to address the issue?
Four years on from the disaster, the Government announced funding to support the replacement Aluminium Composite Material (ACM) cladding, subject to certain conditions.
But many building owners have been waiting for further guidance to be issued by government, before taking remedial action.
Since Grenfell, much of the government’s Building Safety Programme has focused on short term remedial measures for existing high-rise residential buildings with Aluminium Composite Material (ACM) cladding.
This has included advice on the measures building owners should take to review ACM and other cladding systems, to assess and assure their fire safety, and the potential risks to residents of external fire spread.
However, in a report published in January bringing together the advice of the Ministry of Housing, Communities and Local Government’s (MHCLG) Independent Expert Advisory Panel on building safety, the government has now urged building owners to take action as soon as possible, where there is a risk to the health and safety of residents.
Meanwhile, amendments to the Fire Safety Bill have also come into force, making owners of all multi-storey, multi-occupied buildings in England to be required to undertake fire risk appraisals and assessments of their buildings, including external wall systems.
Further to this, following consultation with the fire safety industry, insurers and lenders, the Royal Institution of Chartered Surveyors (RICS) has issued new guidance to valuers in relation to the valuation of properties in multi-storey, multi-occupancy residential buildings with cladding, with effect from 5 April 2021.
The guidance provides criteria to be used during a valuation inspection, to identify buildings where an External Wall Fire Review form, or EWS1 form, is required.
An EWS1 form is a means by which building owners can confirm that an external wall system has been assessed for safety by a suitable expert, in line with government guidance.
When is an EWS1 form required?
For buildings over six storeys, where:
There is cladding or curtain wall glazing on the building.
There are balconies which stack vertically above each other and either both the balustrades and decking are constructed with combustible materials (e.g. timber) or the decking is constructed with combustible materials and the balconies are directly linked by combustible material.
For buildings of five or six storeys, where:
There is a significant amount of cladding on the building (for the purpose of this guidance, approximately one quarter of the whole elevation estimated from what is visible standing at ground level is a significant amount).
There are ACM, MCM or HPL panels on the building.
There are balconies which stack vertically above each other and either both the balustrades and decking are constructed with combustible (e.g. timber), or the decking is constructed with combustible materials and the balconies are directly linked by combustible materials.
For buildings of four storeys or fewer, where:
There are ACM, MCM or HPL panels on the building.
When deciding on whether an EWS1 form should be commissioned, valuers should take and maintain a record of the site notes, risk assessment criteria and photographs made at the time of any inspection specific to this decision.
Valuers might not make a decision during the inspection itself, in favour of giving the issue appropriate consideration based on the detailed notes taken, which will be documented.
If remediation is required, this must take place in line with government guidance and will likely affect the value of the property.
It should be noted that an EWS1 form is not a safety certificate. If a form is not required, it does not mean that a particular building does not require some form of remediation in the future.
Helping lenders to make informed investment decisions
We understand the importance of providing independent objective advice to lenders on all factors which could affect the value of a particular asset they are lending against.
When valuing a building for secured lending purposes, we have to carefully consider whether the presence of cladding or balconies on a multi-storey, multi-occupancy residential building represents an obvious potential hazard which could materially affect the value of the property and its saleability.
When deciding on whether an EWS1 form should be commissioned, our RICS-Registered Valuers will follow the RICS Guidance and will take and maintain a record of the site notes, risk assessment criteria and photographs made at the time of inspection, choosing to reflect on the inspection accordingly.
If cladding is identified as a potential risk factor, we will recommend an EWS1 from a competent expert on the composition of the cladding and the likelihood that the building would require remedial work.
We could then work with our building surveying team to establish the costs of such work and having established who is responsible for these works, provide a valuation which truly reflects the impact of the cladding and protects the banks security.
For more information about our property valuation service, don’t hesitate to get in touch.