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This June marks the fourth anniversary of the Grenfell tragedy, and our hearts go out to the survivors and relatives of the victims at this time. This disaster should never have happened, and the aftermath of the failings and shortcomings are having huge consequences.
Many experts, engineers and fire safety experts have poured over the conclusions of the enquiry and have advised the Government on the measures needed to ensure buildings can receive the remedial work required and to reassure residents that their homes have a clean bill of health. Of course, these requirements are not without their criticisms, not least when it comes to who pays and what the consequences will be on the sale value and rentability of their properties. For at least the foreseeable future the fallout of all this will impact both the sales and rental sector.
External wall safety inspections (EWS1) will be required but also a raft of other measures will be needed, putting greater responsibility on property managers but also on agents who sell and rent properties in so far as what they need to find out before marketing the property. It will go beyond just looking up to see if the property has cladding or not.
Back in March I was on a focus group as part of the Housing Health and Safety Rating System Review, Stakeholder Consultation and it is amazing how much regulation exists to ensure property safety. This area is so complex and it is doubtful whether landlords or their agents, let alone tenants are up to speed on what is required. This is why a survey of owners, landlords, tenants and safety assessors was undertaken as part of a major overhaul of the HHSRS, and why changes to make it more simple and easier to understand are in progress. They can start with changing the name to something less of mouthful and more meaningful to those who have to follow it!
(For more information for landlords and agents, Hamilton Fraser have put together a series of guides on how to reduce the risk of fire in your property, ensuring your property is safe, including the importance of fire doors and other measures.)
As I have said, I am no expert on the technical details of what caused the fire or what is now needed to be done to prevent a similar catastrophe from happening, However, I can comment on the disclosure of material information in terms of what an agent or indeed a landlord should tell a tenant about building safety if the new EWS1 form cannot be produced due to the backlog in inspections.
The dilemma arises for landlords and letting agents who are looking to rent out a property where an inspection or the requisite documentation is pending. Consumer protection regulations require material information disclosure, and this clearly should include building safety. In the past, when it came to the sale of properties in a leasehold block, an estate agent of the property seller would have been obtaining this sort of information from the property management company of the freeholder, but this did not seem to be a priority for when a leasehold landlord was renting out the property.
This has now changed following Grenfell and it looks very likely that there will be a legal requirement for all occupants and indeed potential occupants of a property to be provided with information on the current safety status of a property. The fact that a property has not had an inspection or has acertificate, does not mean it is unsafe, but it could be unsafe. The fact the status of the building is unknown, at least should be provided to prospective tenants and indeed to tenants currently in occupation. I also think that prospective tenants and those in occupation should also be aware that remedial works may be necessary to the property at some juncture in the future. The tenant may be happy to take the risk of living in a property which has not been signed off, however if informed that they may face months of disruptive work to, say, replace cladding or make other safety changes, they may think twice about signing on the dotted line.
I sit on a working group that has been looking at this and the challenges this presents. The Group set up by The Letting Industry Council includes the redress schemes, ARMA, IRPM, Trading Standards, Propertymark, RICS and other experts who are trying devise guidance, a questionnaire and declaration an agent can sign to reassure a tenant that the appropriate enquiries were made. This would be a voluntary process to start with, but it remains to be seen if the Government or Trading Standards come up with anything more formal.
To misquote Donald Rumsfeld, former US politician, it is all about the “known unknowns and the unknown unknowns.” Agents will have to be on top of this even if they are not experts in the field.
I am also on the steering group of the Improving Material Information in Property Listings Project set up by Trading Standards (NTSELAT) and involving the major property portals, trade bodies and civil servants, to help produce guidance for what is advertised and displayed for properties online in terms of material information and this will include building safety. (See the case for change here.)
The Government is keen to make an announcement this month that portals will be displaying required and consistent information allowing buyers and renters to make informed decisions on whether to proceed with a transaction.
There has just been a survey of agents on what they currently provide and collate and what they feel is necessary. The steering group is drawing up a list of this basic information from the survey results, and the portals have committed to asking for this when properties are uploaded to their sites. Guidance from NTSELAT will follow and subject to the tech the requirements could be live by the end of the year.
For some agents this may appear to be another example of the over burdensome red tape that they are increasingly faced with - however they should ask themselves, what is the impact of failure when you commit to a property as consumer? We at the PRS, have seen people progressing down a transactional path, especially on sales, and then as expenses start to occur, the conveyancing causes the process to fall flat. People are committing mentally and transactionally and are then finding themselves disappointed and out of pocket. The blame inevitably falls on the agent and why they misled the buyer.
Both these projects are there to protect the consumer and the agent equally and yes, there will be protective disclaimers and an onus on buyers and renters to be circumspect and undertake their own due diligence in addition to the duty of care by the agent. The new practices will encourage better documentation and record keeping, something I advocate at every juncture when talking about avoiding and dealing with complaints.
Remember if it is not written down, it did not happen!
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Property Redress Scheme is approved by Government under the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015