Can we talk the lender round? [cladding]

Bubbles99

Hi all, 
We're currently in the process of selling our flat - its a 2 bed shared ownership flat in a block below 18 meters, with no cladding or balconies. 
Our buyers have had a mortgage offer granted, however, now we're at the stage where we're ready to exchange and complete we have just found out that our buyer's solicitor has told the buyer's lender that the building has cladding issues, as a result, they're now asking for the EWS1 before they'll release the funds.

We don't really know why the solicitor said this, the only thing we can think of is because the managing agent confirmed that they are currently in the process of obtaining the EWS1 (there are other blocks in our development that have cladding/balconies etc), and the solicitor thought this must mean that we all have cladding issues... As I understand it, the EWS1 is per building, not for the whole development. 

Furthermore, are we crazy for thinking that if the mortgage company sent a valuer round and gave a mortgage offer, that they had satisfied themselves with the external wall situation? Other flats in the block have had mortgage offers this year as well, so it's not like we just got lucky. Is it possible to talk this lender round and try explaining the situation, or should we suggest the buyers find a new lender? 
Thanks! 

MattMattMattUK

You should consult your solicitor, but if there is no cladding then an EWS1 can not be issued, it is only able to be issued for buildings with cladding that have been certified safe. Your solicitor will be able to refer them to the survey, which should state the construction of the building (eg. brick wall on steel frame) which will show that there is no cladding. 

https://www.rics.org/uk/news-insight/latest-news/fire-safety/cladding-qa/

Bubbles99

Thanks Matt, we've spoken with our solicitor again who has confirmed that the buyer's solicitor hasn't actually told the lender anything yet, but will be legally required to do so when we go to exchange.

Is there much point in trying to push for exchange and completion at this stage without the EWS1 (we aren't going to have one anytime soon)? Will the lender immediately pull the mortgage offer once they see the comments made by the Managing Agent about the building needing an EWS1? Even though they were happy with it up until then? 

archiepea

Hi MattMattMattUk
I am wondering if a brick wall on a steel frame definitely can be regarded as having no cladding.
Builing in question for us has an outer brick wall (proper brick) with a steel frame to which the insulation boards are attached for the inner leaf.
Obviously, from the outside, there is no apparent cladding; but some threads/posts seem to regard the inner bits as part of the External Wall System...
Thanks

fizzgog

Im also waiting for this to pop up in my sale .... no balconies or cladding, but MA's are jumping on the bandwagon of getting surveys done and charging us leaseholders extortionate prices for them, its like being held to ransom. All new builds have insulation panels in these days (kingspan) but reports are giving a negative effect on all flats etc.
Hope you get it sorted.

annetheman

MattMattMattUK said:

You should consult your solicitor, but if there is no cladding then an EWS1 can not be issued, it is only able to be issued for buildings with cladding that have been certified safe. Your solicitor will be able to refer them to the survey, which should state the construction of the building (eg. brick wall on steel frame) which will show that there is no cladding. 

https://www.rics.org/uk/news-insight/latest-news/fire-safety/cladding-qa/

This isn't quite right. Some SO lenders have their own policies about EWS1, which can be found on their intermediaries sites e.g. Leeds. Have a look at this thread for the link: https://forums.moneysavingexpert.com/discussion/comment/77823350

Virtually all modern (1995-2020) buildings have some form of cladding. "No cladding" or "without cladding", for a modern building would mean non-combustible cladding, typically brick, concrete, stone or glass.

EWS1 are and have been issued for buildings with non-combustible (i.e. "no") and combustible cladding, in many cases uncovering other fire safety issues within the external wall system. These are most commonly no/incorrectly installed cavity barriers, lack of compartmentation, combustible insulation and combustible materials i.e. timber or wood composite floorboards on balconies.

EWS1 was never intended for use in buildings without cladding, nor was it intended for use in buildings under 18m. But the government's Jan 2020 consolidated advice for building owners brought all buildings of all heights into scope. 

So lenders have been applying it virtually across the board for modern flat buildings since then, with some exceptions (see thread posted above) where they are accepting alternative fire risk evidence.

In short, it's a national mess, but it's not hopeless if the buyer can get an offer from another lender or your EWS1 can be sped up (and is A1/A2/B1) - I'd be more concerned if I were the buyer because buying a flat without EWS1 right now is ridiculously risky. Good luck!