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Help with mortgage lenders and building safety (EWS1)

EWS1

1. Changing advice on building and fire safety and mortgages for homeowners

This guide explains the effect that the Scottish Government’s building safety advice is having on homeowners, and how FirstPort Property Services Scotland– as the property factor– is responding to these.

Changing Government advice about building safety is impacting thousands of properties across the UK, making it difficult for a large number of homeowners to secure mortgages as many lenders are now requesting what is known as an EWS1 form, or ‘certificate of compliance’. This certificate needs to be signed by an independent qualified professional advisor recognised by Government.

2. Background

Over the last few years, we have seen new Government advice introduced for residential buildings both in terms of fire and building safety. At FirstPort we work hard to ensure the safety of our residents and we have been supportive of these steps.

However, we recognise that this changing advice is having significant consequences for homeowners– including impacting their ability to secure mortgages and exposing them to high costs required for surveys and remediation.

3. Advice for multi-storey, multi-occupied residential buildings

Since late 2018 the Ministry for Housing, Communities and Local Government (MHCLG) has published a series of advisory notes relating to building safety.

In January 2020 this was consolidated into a single document: Advice for Building Owners of Multi-storey, Multi-occupied Residential Buildings. This advice asks that building owners review the design, installation and composition of the structure of external wall systems. It covers the materials used and how facades were put together, as well as certification of the methods taken and procedures followed during construction.

Initially, this requirement was applied to all properties over 18 metres (roughly 5 or 6 storeys). However, the more recent consolidated advice has extended this to all residential buildings where external wall systems are in place.

4. Keeping residents safe

The residential buildings currently managed by FirstPort were designed and signed off by the appropriate building control authority in line with building regulations at the time of their construction. Since then, regular fire risk assessments have been undertaken to understand and manage safety risks.

What has changed now is that this new advice from Government proposes that buildings should be assessed in line with new standards.

In cases where there are concerns over the structure of a building, we will look to put steps in place to mitigate risks while these concerns are investigated further.

5. Impact on mortgage lending - the EWS1 form

Many mortgage lenders now request confirmation that the entire external wall system complies with new Government advice. This is usually requested as an EWS1 form which is a standardised process developed by the Royal Institute of Chartered Surveyors (RICS) to address the issue. The term ‘certificate of compliance’ is also often used.

This EWS1 form needs to be signed by an independent qualified professional advisor who belongs to one of 21 professional bodies recognised by MHCLG. It cannot be provided by either the building owner or the property manager, meaning that the capacity of suitably qualified fire engineers nationally is limited.

In the simplest cases, an EWS1 form can be completed based on researching the plans for the building provided by the original developer.

However, often the information available is insufficient in which case an invasive test (an ‘intrusive survey’) is required – enabling samples to be taken of external wall materials and an assessment of the construction of the entire wall system (typically comprising a combination of construction supports, insulation and external-facing materials).

In some cases, the building can be certified as compliant, but in many cases further testing may be required. Once intrusive survey works are completed, this does not guarantee that an EWS1 form can be provided. The complex nature of building structures means that in many cases further investigative work can be required, or remediation may be needed to retrospectively ensure the building meets the requirements of the new Government advice.

The increase in mortgage lender requests for EWS1 forms, and the forms to be signed off by a specific group of qualified advisors has created a backlog of work across the country. This situation has been made more challenging following further changes to guidance in January 2020 to also cover buildings below 18 metres.

The expertise needed to produce a report also requires a high level of professional indemnity insurance, which has further narrowed the pool of advisors available to do this work.

As a consequence of this situation, a large number of homeowners nationwide have found it difficult to mortgage, re-mortgage or sell their properties until an EWS1 form has been obtained.

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6. The impact of Scottish property law

Due to issues with the professional indemnity (PI) insurance carried by the specialist surveyors who would complete these forms, it is likely that the surveyor will 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 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 to 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.

As a result of these practicalities of commissioning an EWS1 form and the limitations of the specialists’ own PI insurance, any homeowner in Scotland wishing to sell or re-

mortgage their property must personally appoint their own specialist fire safety expert to commission the EWS1 form.

Unfortunately, we are not able to carry out this work on behalf of residents. Having investigated this thoroughly, this is the approach that homeowners in Scotland must take to obtain an EWS1 form for their property. This position has also been confirmed by the Law Society of Scotland: https://www.lawscot.org.uk/news-and-events/law-society-news/externalwallsystems/

7. How homeowners can obtain an EWS1

For a homeowner to commission an EWS1 form they must therefore follow these steps:

  1. Identify a suitably qualified and experienced surveyor or fire safety expert who is a member of a professional body recognised by the Ministry of Housing, Local Communities & Government (MHCLG). You can find out more information about this here: https://www.rics.org/uk/news-insight/latest-news/fire-safety/new-industry-wide-process-agreed-for-valuation-of-high-rise-buildings/

Commission them to carry out the inspection and issue an EWS1 form. Your solicitor or Home Report surveyor may be able to assist.

The cost of this will fall to the property owner instructing the inspection.

  1. If the surveyor or fire safety expert tasked with producing the EWS1 raises concerns over materials used on the block, they may need to first establish what these materials are before they can provide an EWS1 rating.

This means that the surveyor or fire safety expert may recommend a survey is carried out in order to confirm the materials used in the building’s external wall systems, and this may include independent specialist testing of materials in a laboratory.

The cost of this survey may be shared by the owners of the block concerned. FirstPort can help to co-ordinate this survey by seeking consent from the co-owners and presenting funding options.

  1. In some cases, the survey might identify remediation works which are required to the building before an acceptable EWS1 rating can be achieved.

These works are a cost to the owners of the block concerned. FirstPort can help to co-ordinate these works by seeking consent from the co-owners, presenting funding options and appointing a suitably qualified surveyor to manage the project.

 If you need our help in seeking consent for this survey, please let us know by emailing Buildingsafety@firstport.co.uk