Recently, the housing, communities and local government committee (HCLGC) found that ‘fixing fire safety defects’ in high risk residential buildings could cost up to £15bn, and branded the mortgage industry’s cladding form ‘slow and expensive’, specifically the EWS1 process to help banks ‘make lending decisions on high rise properties with a potential fire risk’.
It asked for the government to step in, as not only was the process ‘not working’ but it should ‘take control’ by putting a ‘faster and fairer’ system in place, as the ‘industry-designed’ process was ‘slow and expensive’ and ‘applied to an unnecessarily wide range of buildings’. It also believed ministers should have ‘issued clearer guidance’ to mortgage lenders before advising on fire risk buildings.
The form, introduced last December, came from collaborations between UK Finance, the Building Societies Association (BSA) and the Royal Institution of Chartered Surveyors (RICS), to ‘create a standardised process that would make it easier for brokers and homeowners to find suitable mortgages’.
A valuer could request it from a building owner or representative, and require a building professional ‘confirm that the actual material on the walls posed a limited risk or was non-combustible’. Should it contain materials that ‘posed a significant fire risk’, a ‘detailed description of what was needed to fix it had to be issued’, but within a month brokers began reporting lenders were rejecting mortgage applications.
This was because of ‘outstanding cladding inspections trapping borrowers with their current providers’, and so applications were being cancelled due to inspection requests – made to management and maintenance companies of high rises affected – being delayed. At the time, this related to ‘those qualified to issue the EWS1 certificate, the number of buildings that need to be inspected and the time needed to complete this review’.
HCLGC said there was a ‘lack of qualified, insured chartered fire engineers to undertake the required surveys’, so a ‘large number of buildings would not be inspected for many years’. The EWS1 surveys have also been expensive, with costs ‘typically passed to residents through their service charges even where no fire safety defects were found’.
As a result of fire safety advice from the Ministry of Housing, Communities and Local Government (MHCLG), ‘a much larger number of buildings’ fell into scope ‘than had been envisaged’, and ‘the process has lacked sufficient input from leaseholder representatives, but also other important stakeholders, including the insurance industry’.
RICS urged the government ‘to take greater ownership of the situation’, whilst also noting that ‘at least’ 860 EWS forms ‘have already been completed’, meaning homeowners in at least 800 blocks ‘have been able to buy, sell and remortgage or plan remediation works. EWS1 was created to find a solution to the problems caused in 18m+ tower blocks by MHCLG advice’.
MHCLG’s consolidated advice note in January 2020 ‘caused further significant confusion when it brought all buildings regardless of height into scope and added to the already known capacity issues with fire experts. RICS continues to call on government to take ownership and properly fund remediation works to all affected buildings. Only with a well thought out, government funded strategy, will leaseholders be able to live in safe buildings’.
More recently, Minister for Fire and Building Safety Lord Greenhalgh held talks with RICS to ‘attempt to resolve confusion’, and then Housing Minister Christopher Pincher stated mortgage lenders are reviewing how the forms are used, though some residents have been told by housing associations that they ‘cannot produce’ the EWS1 form for possibly ‘several years’.
Mr Pincher later admitted that there are ‘fewer than 300’ qualified chartered fire engineers to undertake the surveys. Residents have complained publicly including Wisteria Apartments in London, tenants of One Housing properties in London and Slough and residents of Zenith Close in London.
The Which? investigation discovered leaseholders ‘are being duped into paying thousands of pounds to fraudsters faking’ the forms, with the organisation having evidence ‘that at least one firm has issued fake’ forms to several buildings nationwide, as part of a ‘hijack’ of the process. The forged forms may have been used to ‘contract out’ work worth thousands of pounds ‘based on lies’.
Scammers have forged names and signatures of qualified surveyors ‘to pass and fail buildings’, with some forms seen ‘signed off by surveyors who simply don’t exist’, while so called ‘cladding technicians’ have signed off forms ‘without the necessary qualifications’. Which? believes that forms ‘could be used to tender millions of pounds worth of construction work and fire safety measures to linked companies with vested interests’.
The implications ‘could be huge’, including ‘potentially voiding mortgages and home insurance policies that have been agreed off the back of false documents’, with one anonymous London flat owner reporting he discovered leaseholders in his building had paid £20,000 for surveys and a forged EWS1 form, and that surveys ‘were never carried out’.
In turn, leaseholder Peter from Cardiff said his building had been targeted, having realised that the form supplied ‘was fake just before leaseholders were about to pay more than £100,000’, with a volunteer director ‘luckily’ having discovered the company invoicing them ‘wasn’t insured to do the work’. He added: ‘We looked into it further and realised a lot of things didn’t add up. It’s just incredible that this has happened.’
With the form providing a ‘lack of clarity over who is qualified to carry out a survey and sign off the forms that pass or fail’, and there being ‘no regulation of the system’, this ‘coupled with huge demand for the work and few surveyors who are qualified to do it’ means it ‘hasn’t taken long for criminals to exploit loopholes’.
A spokesperson for RICS, UK Finance and the BSA said: ‘We have been made aware that unqualified people may be signing off EWS1 forms. RICS condemns anyone using the current situation for their own gain, with potentially dangerous consequences for residents. Government advice requires all potentially unsafe cladding systems to be checked, and the EWS form was developed with this in mind.
‘Any building where the makeup of the walls is uncertain must be checked by a qualified professional. Banks and building societies have measures in place to protect people against fraud, which would pick up any EWS form that is suspicious, but we encourage everyone to check the signatory on a form with the profession’s institution. If an RICS member is completing your EWS1 form, you can check their membership on our website.
‘We would urge that any further information related to this is made available to trading standards and RICS if appropriate.’
Which? also added that the ‘unregulated industry’ for waking watches sees costs ‘passed on to the leaseholders’, even though ‘any work or fire watches brought in as a result of a fake report could be invalid’, and a ‘real survey by qualified surveyors will need to be carried out’.
Any mortgages agreed based on fake forms ‘could be worthless’, and ‘the same could be said for insurance’, with Which? recommending that ‘checking the credentials of whoever has signed off on the work should give you an idea about whether a form is genuine’, and that information can be found online about ‘whether they have the right experience and qualifications’.
Leaseholders who discover forms are fake should tell the police, Action Fraud and Trading Standards, and if money had been paid ‘it should be reported to the bank from where the account was held’.