Cladding, is it really safe?

After the devastating fire at Grenfell Tower in London, landlords, leaseholders and residents have been left in a quandary concerning cladding on buildings. It is not necessarily that the current advice is unclear but more the case that no party wants to take ultimate responsibility for a building and sign it off as being safe, following the tragedy which occurred that night in June 2017.

What do we know so far from the Grenfell Tower enquiry?

There was a lot of argument and disagreement even amongst experts at the enquiry about the interpretation of the Government’s advice on cladding and other forms of insulation in existence, prior to the Grenfell tragedy. The view taken rather depended on the standpoint of individual parties be the local authorities, construction companies or sub-contractors.

The wording was undoubtedly ambiguous and did not specifically mention cladding, it referred instead to ‘any insulation product’ or ‘filler material’ which status should be of ‘limited combustibility’. There was clearly wriggle room on the merits of installing cladding but the Government strenuously argued the case that this phrasing certainly did include cladding by implication. The wording has now been altered to avoid the possibility of misinterpretations and confusion. Going forward, “any insulation product or filler material…should be of limited combustibility.” The phrase ‘limited combustibility’ is a lawyer’s dream ticket and is totally open to argument. More specific takeaways post-Grenfell include:-

  • A ban on all combustible cladding on buildings over 18 metres high
  • The ban extends to new residential building, hospitals, schools, care homes and student accommodation
  • The only materials approved for external walls will be A1 and A2 class materials, for instance, metal, glass, stone or plasterboard
  • The ban does not cover cladding on existing buildings and the intention does not apply retrospectively to high rise buildings

Why was cladding used in the first place?

Cladding weatherproofs a building and has great insulating properties so it is particularly beneficial for older buildings with poor environmental certification. It also looks aesthetically pleasing and can considerably improve the appearance of older, concrete properties built in the later years of the 20th century.

What are the most dangerous forms of cladding?

The cladding in use at Grenfell Tower was aluminium composite material or ACM and is dangerously combustible. High-pressure laminate or HPL has also proved seriously unsafe and cladding panels made from compressed paper or wood will clearly be combustible. The Government also has concerns about MCM cladding – Metal Composite Materials – which use zinc, copper or steel.

Where does this leave landlords and owners of buildings which have external cladding?

The then Housing Secretary, Sajid Javid, advised developers and landlords to remove and replace any potentially dangerous cladding, but this was not enshrined in law and even if the building is tall, there is still no legal requirement to replace current cladding if it can be deemed to fall within the criteria of limited combustibility. Most landlords feel therefore that they are stuck between a rock and a hard place. Do they tear down and replace cladding and bear the cost themselves or sit tight and hope they don’t have a fire and become the first test case on the interpretation of the phrase, “limited combustibility”?

Tenants and residents are also worried not only for their own safety but also that any costs to replace cladding could be passed on to them. Landlord’s insurers are standing firm on claims for costs based on the premise that the cladding was deemed safe under the former legislation prevailing at the time it was installed.

It is crucial that landlords can clearly demonstrate they have followed the best and most up-to-date advice available and that their building conforms to the highest safety standards; this doesn’t just affect any cladding but will also have a broader impact on fire alarm systems, smoke detectors, fire barriers and fire escapes.

Existing cladding must be subject to a fire safety test with a written fire safety report and if it doesn’t comply with fire safety regulations then it will need to be replaced. Where the cost falls depends on who owns the property. Despite the current climate we are enduring due to the Coronavirus, cladding and fire improvement works have been deemed essential and should continue so far as is possible.

An interesting ingredient in the mix is mortgage lenders acting as a driver for checks on cladding; if the property cannot be deemed to be safe then mortgage companies are reluctant to advance funds to customers to borrow against the security of a property with suspect cladding or insulation. This will have a knock-on effect on buildings insurance cover too. Lenders are looking for satisfactory completion of form ESW1 which is the External Wall Fire Review to satisfy their procedural checks about the safety and integrity of the property. This certification needs to be undertaken by a competent professional such as a Chartered Engineer with the Institute of Fire Engineers and it is essential that this person has Professional Indemnity insurance, no mean feat in the current climate. The pool of available insurers willing to provide both PI and PL cover in the construction sector is sparse, to say the least. Certification from someone without PI cover is not worth the paper it is written on and could leave a yawning gap of exposed liability if it came to the point of an incident or claim.

The onus is on private landlords to ensure both the safety of the building and to uphold their legal responsibility to maintain the exterior of the building as contained in the lease document. However, a landlord can pass on costs to tenants subject to the specific wording of the lease. There is a general principle of ‘reasonableness’ when it comes to the recovery of costs by a landlord and the expense of replacing unsafe cladding would fall within this. Thereafter, case law colours in the details. The axe falls on both parties as landlords will be required to replace unsafe cladding pursuant to their duties to repair and maintain the building. However, tenants may also be obliged to contribute to the costs of this if it can be demonstrated that the replacement is part of the landlord’s obligations to keep the building in good repair. But landlords are not simply the enemy here. The term, ‘landlord’ is wide and includes RMCs – Resident Management Companies – where it is actually the lessees who own the freehold of the property.

To help the financial burden of this replacement, the UK government has just announced in the March budget a £1 billion Building Safety Fund which is to be made available to replace unsafe non-ACM cladding systems. However, this only applies to high rise residential buildings over 18 metres in height in the social and private housing sectors. It is not documented about what will happen to low rise structures with unsafe cladding. So, the money is certainly helpful but only a partial solution to the debate over where the buck stops and who picks up the bill.

The scale of the problem is so great in the UK that a coalition has been formed drawing people and organisations from several different sectors to request a multi-billion pound fund from the UK government to refurbish unsafe buildings. It is thought around half a million people are now living in buildings which were once deemed to be safe but are actually clad in materials which are now known to be manifestly unsafe. This isn’t just about the cost of repair but also the speed – time is of the essence.

HML is a leading professional property services company and is at the forefront of this field with the knowledge and expertise designed to steer property owners through this challenging and fast-moving sector. As members of trade bodies such as ARMA and RICS, we are involved with the changes and developments which characterise this complex and volatile area, working closely with the government to bring both clarity and progress to all landlords and property owners. Keep an eye out for our updates.

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