Cladding and fire safety questions in a block of flats

There is a short answer about cladding and fire safety and a useful one, and they are not the same. What follows is the useful one.

Why this became a transaction problem

Concerns about the external wall construction of multi-occupancy buildings led lenders in several markets to require evidence before advancing on flats. Where that evidence does not exist, a flat can become difficult or impossible to mortgage regardless of its own condition. That produces a market where identical flats in different buildings have completely different liquidity, driven by the paperwork rather than the property.

Buyers therefore need to ask about the building before they fall in love with the flat, because this cannot be resolved by negotiation. The frameworks, forms and requirements differ by country and have changed repeatedly, so the current local position is the one that matters.

What buyers should ask for

Ask the managing agent or freeholder what documentation exists about the external wall construction and whether any assessment has been carried out. Ask whether any remediation is planned, whether funding has been identified and whether leaseholders are expected to contribute.

Ask for the fire risk assessment for the building and when it was last reviewed, since that is a routine document in most managed blocks. Ask about the evacuation strategy, because a building operating a waking watch or a changed strategy is signalling an unresolved issue. Get these answers before instructing a survey, as they are the questions most likely to end a purchase.

Compartmentation and the parts you cannot see

Fire safety in flats depends heavily on compartmentation, meaning each dwelling is designed to contain a fire for a defined period. Breaches occur where services have been run through walls and floors without being properly sealed, which happens routinely during refurbishment.

On an ordinary week, front doors to individual flats are part of that system, and their specification and condition are a common subject of assessment. Communal areas matter too: propped fire doors, stored items in escape routes and failed self-closers all defeat the design. None of this is visible on a normal viewing, which is why the building documentation carries so much weight.

Who pays for remediation

Whether leaseholders can be charged for fire safety remediation depends on the lease, on legislation and on funding schemes that vary by jurisdiction. Several countries have introduced protections, funds or liability rules, and their scope and eligibility conditions are specific and change over time. Service charge demands relating to remediation can be very large, and their treatment in a sale is a matter for the conveyancer.

In practice, ask whether any reserve fund exists, what it holds and whether it is designated for building safety work.

This is an area where general information is genuinely inadequate, and a solicitor familiar with the local regime should advise on any specific building.

Insurance and running costs

Buildings insurance premiums for blocks with unresolved fire safety issues have risen sharply in some markets, and the cost passes through service charges. Ask for several years of service charge accounts so you can see the trend rather than a single year in isolation.

For most people, a waking watch or an interim alarm system is an ongoing cost that appears in the service charge until the underlying issue is resolved. Where costs are rising steeply, model what the charge might be in a few years rather than budgeting on the current figure. Remember that a service charge is a running cost of the same kind as a mortgage payment, and it is not optional.

Making a decision

A building with completed remediation and full documentation is often a better purchase than one where nothing has ever been questioned. A building with an unresolved position is a risk to your ability to sell as much as to your safety, and both matter. Where a discount is offered to reflect uncertainty, remember that the next buyer will apply the same discount when you come to sell.

Ask the lender early what documentation they require, because that answer defines whether the purchase is possible at all. Fire safety regulation is changing in several jurisdictions, so confirm the current requirements rather than relying on what applied a year ago.

The takeaway

Ask about the building before the flat: what documentation exists, what remediation is planned, and who the lease says pays for it.

Pick the one that costs you least, and let the rest wait.