September 2020
What do you need to know about EWS1?
Many leaseholders have become aware that selling a flat has become very difficult and that they need an EWS certificate to do so. This has been the subject of numerous media reports, including BBC Newsnight on August 27 2020. The archive of cladding articles on LKP is here.
What is an EWS?
An EWS is a External Wall System survey. The Royal Institute of Chartered Surveyors (RICS) and the lenders in co-operation with government officials jointly created the EWS1 system. However, it is not a government-endorsed system. It was launched in December 2019 as a way to assess the external wall safety safety of buildings over 18 meters.
New industry-wide process agreed for valuation of high-rise buildings
RICS and all sponsoring organisations have and will communicate widely to ensure RICS Members and Firms, and supporting organisations and lenders, are aware of the EWS Form. It is important only to use the correct version – downloadable from our website.
These are extensive surveys that will examine and take samples from different parts of the wall system.
Why do we need EWS?
Until the Grenfell tragedy, compliance with building regulations was seen as sufficient evidence that a building was safe. Buildings are signed off by either a local authority buildings inspector or a private inspector under the approved inspectors scheme as compliant with regulations at the time of construction.
Where to get approval
Approved inspectors are companies or individuals authorised under the Building Act 1984 to carry out building control work in England and Wales. The Secretary of State has designated CICAIR Limited (a wholly owned subsidiary of the Construction Industry Council (CIC)) as the body responsible for deciding all applications for approved inspector status in England.
Subsequently, the government created an independent expert panel to advise on building safety and its advice somehow sought to shift responsibility away from approval under building regulations to the “building owner”. A document called Advice Note 14, updated in December 2018, told “building owners” that it was their responsibility retrospectively to check the safety of all buildings of more than 18 meters.
The safety panel issued no guidance on how this safety should be evidenced. The lenders became worried that they now had no means to verify that a building was safe. An ordinary valuer does not have the skills necessary, nor would be in a position to carry out the level of work required, to make this assessment. Therefore, they could not assign a price to the value of a flat for the purposes of a loan without some other form of evidence.
As a result the EWS system had to be created.
What ratings does an EWS survey give?
This survey system provides two main options. Option A is for buildings without flammable cladding, but which may or may not have some flammable materials on the “accessories” such as balconies. Option B is for buildings with flammable cladding, which may or may not need to be remediated.
The outcome of the survey for each block will fall into one of the following five categories, or ratings:
Option A
A1 rating There are no attachments whose construction includes significant quantities of combustible materials (i.e. materials that are not of limited combustibility).
A2 There is an appropriate risk assessment of the attachments confirming that no remedial works are required.
A3 Where neither of the above two options apply, there may be potential costs of remedial works to attachments.
Option B
B1 Surveyors conclude that in their view the fire risk (Note 8) is sufficiently low that no remedial works are required.
B2 Surveyors conclude that an adequate standard of safety is not achieved, and they have identified to the client organisation the remedial and interim measures required (documented separately).
Which buildings need an EWS?
EWS was launched in December 2019 for buildings more than 18 meters high. The same officials who had “observed” the work of RICS and the lenders also “observed” the work of the government safety panel. The safety panel updated all their safety advice in January 2020.
That advice moved away from blocks of above 18 meters high and now said “building owners” must now check their buildings of any height.
So the RICS system designed for the 10,000 or so blocks above 18 meters high suddenly needed to be applied to 100,000 blocks under 18 meters high.
Where are we now?
As a result of extending the application of EWS surveys to blocks under 18 metres there is now no chance, with the engineers available, that all blocks can be surveyed (in the assessment of LKP).
Now nobody knows which buildings need to be checked. Nor do they know how they should be checked if the EWS system is not used. The government has also confirmed it accepts there are less than 300 qualified safety engineers in the country who can carry out the work.
The government has been keen to point out that RICS and the lenders and the government and others are currently in discussions as to what if anything can be changed. In the meantime, the resale market of flats is in chaos.
Do you have the right to demand an EWS from your “building owner”?
NO. Recently Housing Minister Pincher wrote:
“EWS1 form is not a Government document, and there is no agreement between Government and RICS stating that a building owner must produce an EWS1 form.”
Although the government “supports” EWS, it has given it no statutory backing. There is no automatic obligation on a landlord to carry out an EWS and no obligation on the landlord to provide a copy to the leaseholders even if they do carry out a survey. (Some freeholders which have carried out the survey are either insisting that leaseholders pay for the survey or pay for a copy of the survey when they come to sell.)
The provision of an EWS is entirely discretionary. It is only likely to happen if the landlord can find an engineer and is able to pass the costs on to the leaseholders.
More and more leaseholders are discovering that without an EWS it is impossible to sell their flat at the moment, or change their mortgage lender.
Do you want an EWS?
Most leaseholders want an EWS because they want to be confident that they live in a safe building, or also because they plan to sell their flat or change their mortgage provider (ie to remortgage). The reality is that of the 860 plus EWS surveys that have been carried out so far, most show the building in need of some form of remediation that then means the flats cannot be sold until the remediation is completed.
The most common rating provided is B2. This can very quickly result in high-cost interim measures such as waking watch and interim fire alarms – costs that are almost inevitably passed on to the leaseholders.
If you plan to sell, or need to change mortgage provider, you have no option but to ask for an EWS if your lender or buyer demand it. There is no longer any specific building type that needs these surveys. Many lenders will demand an EWS on blocks of under 18 meters: some will demand an EWS on new buildings constructed after Grenfell.
Can you refuse to pay for an EWS?
If your landlord plans to charge you for an EWS via the service charge he may tell you that the Property Tribunals have decided that these costs can be passed to you. As far as we are aware, there have been no cases that set precedent in the Upper Tribunal.
However, if you think that you want to resist paying for an EWS then you face the problem that your property cannot be valued. You may not be able to sell or re-mortgage, and your buildings insurance may well go up as well. The insurers have become increasingly cautious of risk on blocks of flats where there may be cladding concerns.
Can you organise your own EWS?
NO. Only the “building owner”, the landlord, or the RMC or the RTM can organise an EWS survey. An EWS survey is an invasive and expensive process where samples of materials from the external wall system of the building are extracted. You, as a leaseholder, have no right to carry out such a survey, and you have no right to instruct a surveyor to do it for you.
How long will an EWS take to obtain?
The government accepts that there are less than 300 people in the country qualified to carry out these surveys.
Some social landlords have said it may take as long as 10 years to check all of their buildings for building safety risks. At best, if your landlord agrees to an EWS, assume it may take three to six months and that the results may lead to remediation costs.
Potential EWS frauds
There has been a recent suggestion by ‘Which?’ that some EWS fraud is emerging. As far as we know, this is not a widespread issue. You should be protected because the landlord is responsible for ensuring he employs a properly accredited firm to carry out the EWS survey. The lender is also likely to check with the firm producing the EWS that the certificate is valid. However, if a dubious company says it can provide an EWS certificate just for your flat then that is a fraud. The certificate is not the important part: the detailed survey is.
LKP Advice to leaseholders affected by EWS or cladding
To help understand what costs you may be liable for with EWS or cladding remediation we suggest you consider the following:
- Ask your landlord which section of the lease allows him to pass on costs. The bad news is that if the landlord is not able to pass the costs to you, or the government does not help pay for the work, it may not be carried out. You probably have limited powers to resist paying towards an EWS if the landlord feels he needs to undertake one.
- You have limited legal rights to force the landlord to carry out cladding remediation and no right to require him to carry out an EWS survey. (For anyone wanting a detailed read on “building owner’s” obligations see Professor Susan Bright’s blog: https://www.law.ox.ac.uk/housing-after-grenfell/blog/2019/02/part-1-building-owners-and-cladding-problem
- If the building is less than six years old, and your building has cladding or building defects, you may be able to take an action under the Defective Premises Act. Ask your landlord whether this has been considered. If your landlord is the developer ask him why he thinks you should not be able to take an action. Then get commercial legal advice. You will normally need to start an action before the six year limit.
- If the building is less than 10 years old you may be able to claim against your building warranty scheme if you have cladding or other building defects. Again, you are likely to need expert advice if a claim is started.
- You can contact the government agency LEASE to understand what costs you might be liable for under the terms of your lease. Readers will know we do not hold LEASE in high regard, but it gets a lot of government money to provide free initial information on leasehold law. So use it to read your lease and identify which clauses make you liable to pay for cladding works.
Always contact LEASE in writing, not by phone: https://clients.lease-advice.org/EnquiryForm/EnquiryForm - A HEALTH WARNING. If you contact LEASE be cautious of any advice it offers about the limitation on your costs. LEASE will tell you that the landlord is only able to pass on “reasonable costs” and that you have the right to challenge costs at the Tribunal.
Yes, the costs must be reasonable and yes, the landlord is only allowed to pass on costs defined in your lease. However, 99%+ of leases will allow these costs to be passed on and if you want to dispute the costs it means you have to spend your money to prove the costs were not allowed or not reasonable.
In the last three years, almost every case at the Tribunal has allowed cladding related costs to be passed on and deemed them to be reasonable. In most cases, the Tribunal has also allowed the landlord to pass on his legal costs relating to the leaseholders’ challenge. Also, remember, that if the leaseholder somehow wins he will have no right to claim his costs and then things go back to point 1 and the difficulty of you making anyone else pay. (Yes, leasehold is an awful system!) - Check whether your building has applied for the government funds, and if so where the project sits in the application process.
- Support yourselves. There have been a huge number of mental health issues on cladding sites and sharing your concerns and working together to represent your interests is vital. Seek professional help if the stress becomes too much or you think any of your neighbours need help.
- Join one of the self-help cladding groups around the country such as the national UK Cladding Action Group group or regional groups. Contact details are as follows:
UKCAG ukcladdingactiongroup@gmail.com
BrumLAG wearebrumlag@gmail.com
Leeds Cladding Scandal leedscladdingscandal@hotmail.com
Liverpool Cladiatiors liverpoolcladiators@gmail.com
Manchester Cladiators manchester.cladiators@gmail.com
SouthamptonCAG sotoncladding@outlook.com
Also, think of joining facebook groups such as the National Leasehold Campaign or the Welsh Leasehold Campaign which look at wider leasehold issues.
nationalleaseholdcampaign@gmail.com
mark@welshleaseholdcampaign.org
Please remember, none of these groups get any support from the government, so you should be willing to offer them your help rather than just expecting them to help you.
- Talk to us at LKP. We also have limited resources, but have been helping leasehold sites for a decade and cladding sites since 2017. We have helped many leaseholders to find a solution to their problems and have sometimes been able to direct them to specialist lawyers, surveyors, engineers and accountants.
- Contact your MP and ask for help, especially if you are unable to obtain an EWS. Some MPs have managed to persuade some developers to fund remediation, even on blocks that are more than 10 years old. Some MPs have also put pressure on the government to do more. They can only do that if they know the problems that you face.
Lending information for existing borrowers
If you need to re mortgage with your existing lender because you have reached the end of a discount period, your lender should be able to offer you a new discounted product without requiring an EWS. This is explained in a blog from UKFinance which is the lenders’ main representative body.
Fire safety and cladding: Building Safety Bill will help but more and faster assessments needed
The publication of the draft Building Safety Bill is a good time to reflect on the impact fire safety concerns have had on mortgages. The risks associated with combustible cladding are becoming ever clearer and will result in many blocks of flats needing work to make them safe.
How do I pay for the remediation?
Unfortunately, you are in a Catch-22 situation if you need to raise money for remediation works.
Until the works have been done the value of your flat is affected, and so the lender is very unlikely to be able to lend you the additional funds. The lenders also have to meet their own lending rules and lending more money on an asset with a reduced value goes against those rules.
Without additional funds you may be unable to afford to pay for remediation, especially after you have had to pay for interim safety costs.
This isn’t fair and it isn’t your fault. It is the fault of either the developer or the government.
