30 Nov Sell Flat Without EWS1
SELL FLAT WITHOUT EWS1
The outside of a building is called the external wall system (EWS) which is made up of cladding, insulation, fire break systems etc. Following the Grenfell Tower fire in 2017, the safety of the external wall system of other high rise residential buildings became a serious concern. As such, in December 2019, the Royal Institution of Chartered Surveyors (RICS) with the support of UK Finance and the Building Societies Association introduced EWS1 forms.
What is the EWS1 form?
EWS1 forms provide the fire risk rating of residential buildings and are required for all residential buildings which are over 18m in height (which is typically six storeys and above). They have to be obtained by the building owner (the freeholder) and the assessment must be carried out by an expert with the relevant training, without an EWS1 you will struggle to sell the flat.
What is the purpose of an EWS1 assessment?
EWS1 assessments are a standardised process devised to determine whether a residential building is compliant with the government fire safety regulations. They came into effect in order to provide security to mortgage lenders to mortgage/remortgage flats within a residential building. If the block of flats doesn’t comply to fire regulations a buyer won’t be able to obtain a mortgage and therefore you will only be able to sell the flat without an EWS1 to a cash buyer.
Prior to this, if there were concerns regarding the external wall system of a residential building, surveyors would value the building as having zero value. Whilst this does not actually mean the building has no value, this is flagged to the mortgage lenders, which would impact their willingness to lend. This is the reason why a surveyor with the relevant expertise is required to carry out an in-depth assessment.
What does the process involve?
A suitable expert will conduct a comprehensive physical inspection of the external wall system of the building. As well as examining the documents detailing how a building was constructed in terms of both the materials and methods, they will also remove parts of the external wall system and test the fire performance of the materials. They will carry out testing on the cladding, as well as other elements within the whole external wall system, including the insulation between cladding panels and the walls and the fire-stopping measures. They will also assess whether fire-resisting cavity barriers and fire-stopping have both been correctly installed. Once this has taken place, their report must be signed off by a registered fire engineer. The process of obtaining an EWS1 form can take between 6 and 12 months.
What are the different ratings of an EWS1 assessment?
Following the EWS assessment, a building will be given one of five possible ratings. If the fire risk rating is A1, A2 or B1, this indicates that the building is considered safe and therefore a mortgage should be provided. However, if a building is rated B2 or A3, then
the necessary remediation works are required to be conducted on the external wall materials in order to ensure it is compliant with the fire safety standards, as otherwise, banks will be unwilling to lend on the property.
What are the problems with EWS1 forms?/ What does this mean for leaseholders?
There are two primary issues for leaseholders of residential buildings where an EWS1 form is required. The first is that in addition to the service charge they are currently paying, collectively they have to take on the cost of this assessment being carried out. This is typically around £7000, however, this can vary based on the size of the building, the amount of testing required and the company that is instructed to carry out the assessment. In addition to this, if the risk of the cladding is significant, immediate action
may have to be taken before the cladding is replaced, which may include employing a 24 hours a day security guard, otherwise known as a ‘waking watch’. Again, this would be an additional cost that the leaseholders would have to bear.
Secondly, there is a shortage of qualified professionals who are able to carry out the ESW1 assessments. As such, given banks will not lend money on flats in buildings where an EWS1 form is required, people are finding themselves unable to move. Whilst the government has recently provided grants to increase the number of experts who have the required level of training to undertake these assessments, there is a considerable backlog to work through. Nonetheless, given the high demand for obtaining EWS1 forms, some housing associations have stated that it could take several years for all ESW1 assessments to be undertaken and for the remediation works to be carried out following inspection.
Things to note
An EWS1 form is not a life safety certificate as it is only valid for five years, however, it may have to be reassessed if any substantial changes occur to the external wall of a building. It is also important for building owners to understand that EWS1 forms must
never be used to determine a buildings’ overall fire risk as it does not consider other fire safety measures and risks within the building. Moreover, whilst mortgage lenders will insist on EWS1 forms when considering mortgaging and remortgaging flats in high rise residential buildings, they are not a legal requirement.