Senior Pensions Consultant
Out-Law News | 15 Sep 2020 | 3:53 pm | 2 min. read
Owners of high-rise residential buildings in England will have to play their part in covering the cost of removing unsafe aluminium composite cladding (ACM) by the end of 2020, the government has said.
Public funding "should not be the only means of remediating high-rise residential buildings with unsafe non-ACM cladding", the government said, in response to calls from the Housing, Communities and Local Government (HCLG) select committee to increase the £1 billion Building Safety Fund for non-ACM cladding remediation works. The government estimates that the total cost of remediating such buildings could be more than three times the value of the Building Safety Fund.
"[B]oth the social and private sector are expected to play a part in ensuring that their buildings are made safe," it said, in its response to the HCLG committee's June 2020 report on the progress of cladding remediation.
Progress with the ambitious reform process which the UK government has embarked upon is being seriously hampered by the difficulty in engaging specialist advisers and contractors.
Building owners should meet these costs from their own resources, without passing the costs of works onto leaseholders; or through applicable warranty schemes or pursuing contractors responsible for the installation of unsafe cladding, the government said.
The government is targeting an end of 2020 deadline for completion of the removal of all unsafe ACM cladding in England, with remedial works completed by the end of 2021.
In its response, the government emphasised that building owners, freeholders, landlords and their managing agents should be passing on information to their leaseholders about fire safety defects in their buildings. It has put steps in place to make engagement with leaseholders a condition of any government funding for remediation works. Leaseholders who remain concerned about any lack of action once they have spoken to the responsible entities should flag this to the Ministry for Housing, Communities and Local Government.
Building safety expert Katherine Metcalfe of Pinsent Masons, the law firm behind Out-Law, said: "Progress with the ambitious reform process which the UK government has embarked upon is being seriously hampered by the difficulty in engaging specialist advisers and contractors".
"Form EWS1, applications to the Building Safety Fund, government information-gathering exercises and preparations for the Fire Safety Bill and Building Safety Bill coming into force are all creating demand for specialist resources which far outstrips supply. Whilst everyone shares the goal of remediating buildings as quickly as possible, the government must set realistic timetables which take into account these constraints," she said.
The government also rejected calls by the committee to relax the requirements on who can undertake external wall fire review (EWS1) surveys of buildings, in response to concerns that a lack of surveyors qualified to carry out this work is slowing down residents' ability to sell or remortgage affected properties. The government is concerned that any such relaxation would reduce standards and would not be in the best interests of leaseholders.
The government said that it was working with the Royal Institution of Chartered Surveyors (RICS) and lenders to address issues around guidance for EWS1 work. It has also sought assurances from lenders that customers will not face barriers to product transfer and remortgage offers within the usual constraints of commercial lending.
It will also continue to engage with the insurance industry to better understand and mitigate issues highlighted by the committee with obtaining buildings insurance for some high rise blocks.
Metcalfe said: "Form EWS1 remains problematic for building owners and residents alike. Where combustible materials are present on buildings, the default position has become that lenders will not fund purchases or remortgages even where the building complies with the building regulations which were in force when the building was constructed. That is inconsistent with the legislation banning combustible materials, which was not intended to be retrospective in effect".
The government will take forward actions to strengthen the construction product testing regime as part of the Building Safety Bill, which is currently before parliament. This will include setting up a new Construction Products Standards Committee to advise the government on regulatory standards and improvements to the testing regime, replacing the European Commission's current role.
21 Jul 2020
23 Mar 2020
Senior Pensions Consultant