It is now standard practice for valuation surveyors to alert their client (their client being the flat owner), to the existence of material on their block, which may have an element of combustibility, including:
This new standard, which has been introduced by The Building Societies Association (BSA), and UK Finance (the bodies who represent mortgage lenders), and the Royal Institute of Chartered Surveyors (RICS); is summarised by Form EWS1. The form is designed to inform any potential mortgage lender, of the risks associated with combustible material on the walls of the property.
This new lending standard has been introduced following the Grenfell Tower tragedy in 2017.
Fundamentally, two issues associated with Form EWS1 may affect you if you are selling.
These are the facts as we currently understand them, however it is important that we stress that Newton are not experts, we are merely interpreting the information we have to hand, to the best of our ability. If you are in any doubt over any of the following, you should seek independent professional and legal guidance. If you are in the process of selling, your solicitor should be able to offer you the most up to date advice.
The valuation surveyor who has been commissioned to carry out the Home Report, may state that the owner needs to obtain Form EWS1 for the potential purchaser’s mortgage purposes.
Following advice notes issued by The Ministry of Housing, Communities & Local Government (MHCLG), UK Finance, BSA, and The Royal Institute of Chartered Surveyors (RICS), a standardised document called Form EWS1 has been produced to inform potential mortgage lenders of how the building has been constructed, and how the external walls could perform in the event of a fire.
Originally envisaged to concern only flatted premises over 18 metres tall with any kind of external wall cladding or wall insulation, most recent combined advice notes from the MHCLG, recommend that the owners of all flatted premises of any height, assure themselves of the materials used in the construction of the premises, and their combustibility in the event of a fire. This now means that in many cases, although your building or block may be lower than 18 metres, and despite reference to buildings over 18 metres tall on Form EWS1 (version 1 – December 2019), your building may be flagged by your valuation surveyor as requiring to have Form EWS1 for mortgage purposes.
Whilst guidelines arising from English departmental government advice isn’t necessarily applicable in Scotland, UK Finance and BSA, have insisted that properties in Scotland should also be surveyed in line with the guidance issued in England, and as such Form EWS1 is required to be completed by an appropriately qualified person.
This recommendation is regardless of whether your property currently meets Scottish building standards. In all likelihood, your property will have met Scottish building standards at the time of construction, and will continue to meet these standards. New building standards, are generally not applied retrospectively.
Form EWS1 can only be signed off by a suitably qualified fire safety expert, who must be a member of a professional body, recognised by MHCLG. In signing off the form, he is certifying whether or not, in his opinion, the wall system on a building has limited combustibility.
Due to issues with the professional indemnity (PI) insurance carried by the specialist surveyors who would complete these forms, the surveyor will likely only sign the form in respect of the “owner” of the flat or building involved. This is because the amount of insurance cover available to the surveyor or fire engineer, is limited and it cannot cover multiple owners in the form of a block Form EWS1.
While this new process may sound relatively straightforward, it is made more complicated by the way properties (such as flats), are owned in Scotland compared with what happens in England and Wales.
In England, the system of leasehold allows an individual or organisation to be identified as the overall “owner” of a building containing many flats. In Scotland, individual flats are owned outright by the individual owners. There is therefore no single “owner” of a block of flats who can instruct the completion of Form EWS1 on behalf of ALL flats in the building.
Therefore, in terms of the practicalities of instructing Form EWS1, and in part due to the limitations of the surveyor’s PI insurance, in Scotland an owner wishing to sell or re-mortgage their property must personally appoint their own specialist fire safety expert to commission Form EWS1.
If it can be shown on Form EWS1 that the property is suitable for security purposes, it may lead to a lender deciding to lend on the property, however, it is worth mentioning that it is up to each lender to decide their lending criteria.
Form EWS1 is not a pass or fail style document, it is an advisory note by which the lender will form an opinion, and decide ultimately whether they will lend or not.
If the surveyor or fire engineer tasked with producing Form EWS1 raises concerns over materials used on the block, they may require to establish what these materials are.
Building construction manuals, and even local authority records can hold inaccurate information regarding the building, therefore the surveyor or fire engineer may recommend a survey to establish the materials used in the construction, which may include independent specialist testing of materials in a laboratory.
This type of investigative survey can be referred to by various terms, however one frequently used is a Construction Identification Survey (CIS), which will yield information on the type of materials used .
This information will be obtained through a combination of building and council records, and physical down-takings of sample materials. There may also be a requirement to access a minimum number of the flats in the block internally, as many as 10% of the flats may be required to grant access to the surveyor.
This initial survey is at cost to the owners of the block concerned. Newton can help co-ordinate this survey by way of seeking consent from the owners.
If the results of the survey prove positive, the surveyor or fire engineer, so long as they hold PI insurance, can then issue to any owner of the block Form EWS1 certificate for mortgage purposes.
This certificate will be at cost to the individual owner, as per the sum determined by the surveyor or fire engineer.
Please note, Newton can not, in any way, recommend or endorse, a surveyor or fire engineer in respect of Form EWS1 as we are not qualified to do so. In addition, it should be noted that any owner is free at any time to make their own enquiries on this matter, or to seek an alternative supplier for Form EWS1.
It should also be understood that the surveyor or fire engineer may in fact come back with recommended remedial works, these works will need to be costed and then considered by all owners before being taken forward.
In the meantime, owners of modern, multi-storey buildings can rest assured there will be comprehensive fire safety measures in place, which could include smoke extraction systems, which will be regularly inspected and certified in line with good practice.
This is a developing situation, which potentially affects many thousands of flats in the country, if you are affected by this issue, your development is in no way unique.
There is a variety of literature available on this subject, including minutes from the Local Government & Communities Committee at the Scottish Parliament.
Please note, where Form EWS1 records the name of the ‘Client Organisation’, in England this refers to the management company who has permission to act for the singular landlord.