The role of managing agents in the remediation of non-ACM buildings

In March 2020, the government announced the launch of an additional £1 billion fund in the Budget to remove unsafe non-ACM cladding from buildings. Registration opened at the start of June, and leaseholders have been understandably keen to get access to the fund.

There is debate and controversy over the government’s handling of the crisis, the treatment of leaseholders, the actions of building owners and quantity of the fund. In particular, the debate over who should pay has been prolonged. There is no doubt that this dialogue and the fund itself will continue to be a subject of debate for years to come.

For leaseholders, life cannot stand still, especially when they need to remortgage or sell. Here is what managing agent should be doing to assist:

Firstly, the EWS1: External Wall Fire Review form. EWS1 is designed to assist in the assessment and valuation of flats in high-rise blocks. It informs lenders whether an external wall construction carries a potential fire risk.

When leaseholders come to remortgage or sell, there is every likelihood that they will be asked for this form. It is required for buildings taller than 18m and some lenders are insisting on the form before lending in any event.

At Alexander Faulkner Partnership, we are finding that the process of completing EWS1 is typically expensive with long waiting times. Some freeholders are picking up the cost through the service charge, and some aren’t. EWS1 is under ongoing scrutiny from the government and our trade bodies. While the debate goes on, you can assist leaseholders in navigating EWS1 and keeping on top of any legislative changes which may affect them.

Secondly, managing agents should be helping clients to make applications to the Building Safety Fund. This should be done quickly. Not only are delays frustrating for leaseholders, they prolong remediation of buildings, potentially impacting on the service charge and costs for unnecessary works.

Currently, the government are releasing regular updates almost about non-ACM buildings and the Building Safety Fund. We are digesting this and passing on key information to clients, along with dialogue where action is needed. Through the IRPM and ARMA, we can hold the government accountable on EWS1, the Building Safety fund and further legislation on behalf of the industry and our clients.

Of course cladding remediation is just one of the current legislative discussion points around fire safety in blocks of flats following the tragic events at Grenfell three years ago. The fire safety bill is proposing checking all fire doors possibly as frequently as every three months. Managing agents should be discussing such implications with their clients as future service charge budgets will need to reflect substantially greater sums on health and safety to accommodate these checks.

At Alexander Faulkner Partnership, we will continue to support our clients on this matter, and keep a close eye on updates from the government, ARMA and the IRPM.