Owning Property in a Post Grenfell UK

Since the aftermath of the Grenfell Tower fire in 2017, the issue of unsafe cladding on the external walls of buildings was pushed to the forefront and the Government has put in place new changes to Building Regulations to prevent the use of unsafe cladding.

What is Cladding?

Cladding is an additional layer of material on the exterior of a building. Cladding is installed for several reasons, for example for weathering issues or cosmetic purposes. It can also be used to increase the thermal or energy efficiency of the building. Depending on the materials used in the cladding system, the cladding can be highly flammable. This was the issue with Grenfell Tower.

Changes to Cladding Regulations

Following the Grenfell tragedy, the Government amended Building Regulations in 2018. The changes were to specifically ban cladding designed with combustible materials which is installed on the exterior of a building taller than 18 meters and contains one or more dwellings.

The Building Safety Act 2002, which came into force in June 2022, has also changed the laws around the use of cladding and the remedies for removing cladding from existing buildings. Specifically, it affords qualifying Leaseholders under the Act protection from Landlords who seek to forward the costs for the removal of the cladding systems onto their tenants.

A qualifying Leaseholder is a tenant with a long lease of a single dwelling, is liable to pay service charge, entered into the lease before 14 February 2022 and at the beginning of 14 February 2022 the dwelling was either the tenants only or principal home, they didn’t own any other dwellings or owned no more than 2 dwellings apart from the lease. A qualifying Leaseholder must also have a lease in a self-contained building that contains at least 2 dwellings and is taller than 11 meters or has at least 5 storeys.

At the moment, this protection is only afforded to qualifying Leaseholders and not Leaseholders of commercial properties. Although this is the case, if the Landlord is the developer of the building or is associated with the developer, then they will not be allowed to forward the costs of the removal of the cladding systems onto Leaseholders whether they are qualifying or not.

Landlords are required to remove what are now deemed unsafe cladding systems from their building to be compliant with the new Building Regulations, and in some cases, at their own costs. This can be an onerous obligation on the landlord given historically the property met all the Building Regulation guidelines but now does not. Landlords might seek to sell their interest in these buildings and effectively pass this cost onto a buyer. This might mean that their building is not as profitable as it might have been before the changes were put in place.

Fire Safety Regulations

The Government has also made changes to the fire safety regulations in the wake of Grenfell.

Landlords are required to provide a fire risk assessment when they let a commercial or residential premise. The new changes to fire safety regulations will consider the changes the Government has put in place around unsafe cladding.

If a fire risk assessment highlights issues that need to be addressed, then a more in-depth assessment will need to be conducted. If this assessment recommends any cladding to be removed, these costs cannot be born on qualifying Leaseholders, as mentioned above. This may mean that landlords could struggle to let a building which has a fire risk assessment with these recommendations.  

EPC changes

As stated above, cladding systems can be used to increase the thermal efficiency of the building. This is especially relevant given the proposed changed to the energy performance regulations for lettable properties.

Historically, to let a property, landlords required an Energy Performance Certificate (EPC) rating of E and above. The Government proposes to make changes to the EPC rules which will come into effect in 2025 for any new lettings and 2028 for existing lettings. Landlords with rental properties will need to have EPC ratings of C or above.

This is a large jump from the current regulations and can be especially troublesome for landlords with buildings in a conservation area or listed buildings. Making changes to these buildings to bring them to an EPC rating of C or above may be difficult. This may be particularly troublesome if the building has a cladding system that needs to be removed and replaced to meet the current cladding guidelines and to ensure the thermal efficiency of the building is maintained.

If you would like to discuss the implications of changes to building regulations or would like to find out more about our Commercial Property Services, the specialist team in our Commercial Property Department will be delighted to assist you. If you would like to discuss a matter, please feel free to contact a member of our Commercial Property Department on 01242 574244 and we will be happy to meet you and discuss your transaction.