Help to Buy Agency - Cladding

ccdorset

Hello,

My 5 year fixed rate of 2.69% with Halifax comes to an end on 31st Jan 2023 and I’m remortgaging with the aim of paying off my Help to Buy Loan.

I have got a RICS valuation and submitted it to Target HCA, with my redemption application form and £200 fee. Remortgage application is booked at Lloyds for Friday.

I live in a flat and part of the building has external cladding, though the surveyor said that as the building is only 3 storeys and well under 11m, it wouldn’t be subject to the EWS1 form.

When I sent the details to Target, I saw on the website that you must declare any external cladding. I did this, but explained the above about being exempt from any EWS1 form.

However Target have replied today and said:

“If your building is a flat/apartment: We require a letter from your building management/property freeholder confirming that your building does not have cladding and therefore an EWS1 form is not required. This must be on letter headed paper, signed and dated."

Obviously, they haven’t read my email properly as I have explained it does have external cladding but is under the 11m. I’ve replied to them repeating the same, but have stupidly done some googling and found a load of horror stories relating to Help to Buy and the whole cladding issue.

Other apartments have sold in the development and I’m pretty sure some of them were bought under HTB.

Has anyone had any experience of this?

Thanks :-)

ccdorset

So I've found the following guidance on when an EWS1 is required:

For buildings of four storeys or fewer, an EWS1 form should be required where:  

• there are ACM, MCM or HPL panels on the building

Apparently according to the surveyor that carried out my RICS valuation, the cladding is not of this combustible type.

I contacted Target HCA and they have advised that they need a letter from my property managment agent stating that an EWS1 form is not required due to the property being under 11m and the cladding is not of the combustible type.

I phoned the property management company and they said they could do that, but would need my surveyor to write to them to confirm this so they could reference it.

I contacted the surveyor and he has said he cannot do that, the Managing Agent/Freeholder will need to employ a Surveyor/Inspector who is suitably qualified and insured to either provide an EWS1 Form or confirm that one is not required.

Having a good research on the internet this evening, it looks like the surveyor is correct and it is the responsibility of the managing agent to confirm that the cladding is safe and the building would therefore be exempt from needing an EWS1 form.

Looks like I'm going to be going round in circles for a while.   

K_S

@ccdorset This is a common problem where declarations are required regarding cladding safety or work done. Other than a formal EWS1 certificate, the players involved are reluctant to put anything down in writing which could land them in trouble later on.

However, I'm struggling to understand why Target needs this assurance, given that you've got a RICS valuation, and when your remortgage completes, the HTB equity loan will be fully paid off and they'll no longer have any stake in your flat. @kingstreet , any thoughts on this?

ccdorset

K_S said:

@ccdorset This is a common problem where declarations are required regarding cladding safety or work done. Other than a formal EWS1 certificate, the players involved are reluctant to put anything down in writing which could land them in trouble later on.

However, I'm struggling to understand why Target needs this assurance, given that you've got a RICS valuation, and when your remortgage completes, the HTB equity loan will be fully paid off and they'll no longer have any stake in your flat. @kingstreet , any thoughts on this?

This is what I'm struggling to understand too, I have a RICS valuation which shows the property has gone up in value, therefore  Target HCA will get their money back and more. I'm not sure why the status of the cladding would be of any interest to them at this point.

The property management company didn't get back to me today, so looks like I might have to get my solicitor involved if it carries on for much longer. :-(

K_S

ccdorset said:

K_S said:

@ccdorset This is a common problem where declarations are required regarding cladding safety or work done. Other than a formal EWS1 certificate, the players involved are reluctant to put anything down in writing which could land them in trouble later on.

However, I'm struggling to understand why Target needs this assurance, given that you've got a RICS valuation, and when your remortgage completes, the HTB equity loan will be fully paid off and they'll no longer have any stake in your flat. @kingstreet , any thoughts on this?

This is what I'm struggling to understand too, I have a RICS valuation which shows the property has gone up in value, therefore  Target HCA will get their money back and more. I'm not sure why the status of the cladding would be of any interest to them at this point.

The property management company didn't get back to me today, so looks like I might have to get my solicitor involved if it carries on for much longer. :-(

@ccdorset I hope this gets sorted out for you. Please do update the thread with any progress/updates as it could help other forumites who come across a similar issue when redeeming their HTB mortgage on a flat.

ccdorset

@K_S thank you.

I am hoping I might be having some luck today! This morning I received an email with a letter attached from the property management company. They confirm that when their services were instructed they were advised that the cladding was non-combustible and so they do not believe an EWS1 is required.

It was a very nice surprise! I have forwarded it to Target, so fingers crossed they will accept it and things can get moving.

I'll keep the thread updated.

Thanks again.

kingstreet

Not something I've come across yet, sorry.

ccdorset

Sorry I forgot to update this thread. Target accepted the letter from the property management company re the cladding and issued the redemption letter a few days after.

On a seperate note I am now facing an issue with the Ground Rent. It's currently £150 per year and increases by £50 every 25 years. There appears to be an issue if the Ground Rent exceeds £250 (which it won't do in my case for a very long time!) as the lease could be treated as an Assured Shorthold Tenancy. So my solicitor is now seeing if we can get the freeholder to agree to a deed of variation capping the max Ground Rent at £250, or an indemnity policy and hope the mortgage lender accepts it.

I'm very much looking forward to the day that I can afford a freehold house and can say goodbye to Leasehold! 

K_S

@ccdorset Glad to hear that the Target issue got sorted out.

I can't imagine a GR of £150 which will not exceed £250 during the mortgage term being too much of issue.

ccdorset said:

Sorry I forgot to update this thread. Target accepted the letter from the property management company re the cladding and issued the redemption letter a few days after.

On a seperate note I am now facing an issue with the Ground Rent. It's currently £150 per year and increases by £50 every 25 years. There appears to be an issue if the Ground Rent exceeds £250 (which it won't do in my case for a very long time!) as the lease could be treated as an Assured Shorthold Tenancy. So my solicitor is now seeing if we can get the freeholder to agree to a deed of variation capping the max Ground Rent at £250, or an indemnity policy and hope the mortgage lender accepts it.

I'm very much looking forward to the day that I can afford a freehold house and can say goodbye to Leasehold!