In the March 2020 budget, the Government announced that it would provide £1 billion in 2020 to 2021 to support the remediation of unsafe non-ACM cladding systems on residential buildings 18 metres and over in both the private and social housing sectors. The deadline for applications was originally 31 December 2020, but (as an early Christmas gift to many) this has now been extended to 30 June 2021, which will allow applicants greater time to fully consider and complete their applications.
The Ministry of Housing, Communities and Local Government (MHCLG) has also announced a new £30 million fund for building owners to install fire alarms in high-rise buildings awaiting remediation. This may reduce building owners’ need for a ‘waking watch’, and as such reduce overall costs for leaseholders who are paying an estimated average of £137 per month for such services.
The following are the immediate points to consider following these announcements.
Eligibility - Applicants for the Building Safety Fund should be aware that the intention of the fund is to meet costs of remediating cladding systems that do not adequately resist the spread of fire. We understand that some building owners have submitted buildings to the fund following advice from their own professional teams that the materials can be left safely in situ. Such applications will likely fail.
Process – Notwithstanding ongoing applications, applicants are required to demonstrate that they have taken all reasonable steps to recover the costs of replacing the unsafe non-ACM cladding through insurance claims, warranties, and legal action. Applicants should therefore use this extension to ensure they comply with such pre-requisite requirements of the fund if necessary.
EWS1 Form – Standard correspondence sent by the MHCLG to those registered with the Building Safety Fund on the date of the announcement (17 December 2020) provides helpful confirmation that “an EWS1 form is not a replacement for a fire risk assessment, carried out by a competent professional” and that it is the “professional reports that sit behind the EWS1 form…which the department would rely on to make any judgements around eligibility”. There was previously concern that buildings that had achieved a ‘B1’ rating may be rejected for funding. This confirmation will also help building owners to explain to leaseholders why further investigation is required despite the EWS1 rating a building has achieved in the past.
Importantly, 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). This is a welcome announcement for thousands of owners and sellers who were being asked to provide the same for all buildings.
Applications – It is expected that further guidance and detail on this fund will be provided in the coming weeks.
The extension of the deadlines for the Building Safety Fund and the announcement of the Waking Watch Relief Fund are welcome announcements for all stakeholders and interested parties, particularly given the application processing delays and severe capacity constraints in the sector at present. The clarification that EWS1 forms are not required for all homes is also welcome news for many buyers and sellers.
However, with estimated costs to remedy the known firestopping defects in high rise residential buildings alone estimated to be over £14 billion (and rising) across the sector, the two funds obviously are not going to address the significant funding gap and costs involved with making high rise buildings safe again. As such, it is important to understand your liabilities in this regard, continue to explore your rights of recovery against relevant responsible parties and project team members (and from the fund) and to consider to what extent such costs can (or should) be, if not recoverable, passed onto leaseholders.
To see more on how we are addressing such issues and helping our clients in this and related issues, visit our fire safety website pages or contact Peter Massey or any member of the fire safety team for more information.