Written evidence submitted by Anonymous [CPR 014]

I am a leaseholder in a development in Leeds comprising of 4 blocks of flats. Each block is 8 storeys high, primarily brick with B-s1-d0 Kingspan composite cladding around the top floor only. The corner flats have L shaped balconies with timber flooring, comprising of 6 planks on timber. I enclose a picture of our block at the end of this document.

Our flat was put on the market in early September 2019 and we received a near full asking price offer within 24 hours, which we accepted. Following a survey, the lender’s valuer (Halifax) has requested the following:

"We require the Building Owner and/or its agent, as the 'responsible person' under the Regulatory Reform (Fire Safety) Order 2005, to produce a written statement to confirm that the cladding system(s) (both ACM and non-ACM materials) for the subject property meets the requirements of the current guidance from MHCLG. The statement must be prepared by a suitably qualified independent professional advisor who is a member of one of the professional bodies listed by the Ministry of Housing, Communities and Local Government (MHCLG) in Information Note 1 (or any subsequent list). The written statement must be on a single headed page, signed and dated by the advisor, with their full name and qualifications. Fire safety reports, fire test results or product technical data sheets will not be accepted in lieu of a written statement . Please advise the way forward."

Our management company has previously engaged a relevant specialist for a fire safety assessment and provided us with the 4 letters to provide to Halifax’s valuer for their consideration. The letters confirm that in the specialist’s opinion the cladding on the building complies with all MHCLG advice notes. Each letter has been rejected for seemingly increasingly more ridiculous reasons. After 3 months of negotiation around the wording of the letter, we were informed, via our estate agent, that:

“Halifax have informed me that the letter doesn't included the all information that they required in order to sign it off. The letter in essence is acceptable but states the address of the purchase property has been omitted, this needs to be included if you can change?”

The amends requested were subsequently made. Halifax is essentially requiring the management company to procure a written statement for each individual flat, which in a large development is neither practical nor reasonable. Each time they come back with a further amend or request that they have failed to ask for on previous drafts. In early February the draft letter was finally agreed in respect of the cladding but, due to the change of MHCLG advice notes again in late January and the introduction of the EWS1 form which flagged that the timber floored balconies required replacing, the lender outright rejected the mortgage. We provided minutes of the management company AGM as evidence that it was anticipated that the balconies will cost approximately £1,600 per leaseholder to replace and proposed either a retention or price reduction of £2,000 but the lender would not even consider either.

As a consequence, we have lost our onward purchase and around £2,500 in solicitor and surveyor fees. The request from the lender for either a compliance letter or EWS1 is in itself ridiculous as they will not be able to rely on such information as it is given by the fire specialist to the management company, so they would have no legal recourse in any event.

Since then, we were served with the first section 20 notice for the balcony works on 17 February 2020 which now estimates the cost of remediation at £1,600 to £2,500. The management company has said coronavirus has impacted the timeline of works and we have yet to even receive the second section 20 notice citing the costs, despite the management company sending a letter on 17 April 2020 saying that such notice is available on the tenant portal (even though they knew it wasn’t as I spoke to them that same day and they had yet to even receive all the quotes). We are now left in a situation where our building insurance is due to renew in early August and the management company have threatened that unless we pay our section 20 liabilities quickly, the insurance premium will rise significantly. However, the management company have been so slow to act that it is now unlikely that the work will even be underway by the time the insurance renews.

We have been told by estate agents that because the EWS1 flags that remedial works are required, no lenders will consider the property for a mortgage until the remedial works are completed. For context, our property is valued at £185,000 so the estimated remedial works are less than 2% of the value of the property.

We are therefore currently unable to move house indefinitely and facing a £1,600-£2,500 remediation bill to ever be able to sell our property and move on, in addition to the uncertainty of what will happen to the insurance premium in August. The stress of the last 8 months has taken a significant toll on both mine and my husband’s mental and physical health. I was hospitalised in November 2019 with shingles as a result of stress.

Urgent attention needs to be given to MHCLG to address the approach by lenders and insurers to the post Grenfell fire safety issues. Clear legal obligations need to be set out as to who is to pay for fire safety measures, rather than the current approach of releasing new measures, such as requiring sprinklers, but staying silent on financing as this will result in leaseholders being charged via their service charges. Management companies are completely overwhelmed and incompetent in dealing with the current issues to make the properties saleable again.

May 2020