31 March 2021 update
Approval of funding from the Building Safety Fund has been received for a proportion of the works (replacement of the render system), however, replacement of the remaining wall system has been refused (only parts of the render are EPS render which needs to be replaced). The managing agent has lodged an appeal for the elements not yet approved under the Building Safety Fund.
16 October 2020 update
Hamilton House, Liverpool, comprises 130 flats of which Property Partner investors acquired 6 units on the ground floor on 21 March 2017. Following the Grenfell tragedy in June 2017, the managing agents of the building (LIV Block Management) arranged for surveyors to assess the cladding at the property and leaseholders were provided with confirmation that Hamilton House contained no ACM cladding. The surveyors identified that the facades of the building consisted of polished stone, render, aluminum framing systems and terracotta rainscreen.
In December 2018, the Government issued Advice Note 14 which provides guidance to owners of buildings above 18m to take “general fire precautions” in their buildings and to make sure that external wall systems are “safe”.
The definition of “safe” in the Advice Note is two-fold. First, all materials must be safely installed and maintained. Second, the external wall systems (including cladding and insulation) must contain materials that are of limited combustibility or be a system that has achieved the Building Research Establishment’s BR 135 classification.
Mortgage lenders now require confirmation that buildings are compliant with Advice Note 14 and now request an ESW1 form (this form is intended for recording in a consistent manner, what assessment has been carried out for the external wall construction of residential apartment buildings where the highest floor is 18m or more above ground level or where specific concerns exist). The freeholder of Hamilton House therefore requested that a full survey be undertaken at the end of March this year. We have recently been advised that the survey identified small areas of EPS render (expanded polystyrene render) which is unsafe.
Our managing agents have been chasing LIV for updates as to what action is being taken in relation to the EPS render which has not been forthcoming. In June, our managing agents were advised by a resident that a waking watch (round-the-clock fire marshalls) were at the building but no information from LIV was available. Queries have been raised repeatedly with LIV as to what notifications have been issued by them to any residents or leaseholders regarding the waking watch – the need for it (ie full details of the results of the survey they had undertaken in relation to the EPS render etc) and the cost of it which would fall within the service charges – our managing agents still await a response from LIV in this regard.
It is a requirement for a landlord or its managing agent to issue a Section 20 Notice to leaseholders confirming that they are expecting extraordinary service charge costs to arise, and they would provide as much detail as possible. To date, no Section 20 Notice has been received relating to the EPS Render, waking watch or potential remedial works.
The most recent update obtained from LIV (which is limited in detail) is that they are in the process of making an application to the Government Building Safety Fund, however it is not clear what costs LIV are looking to have covered by the Fund. We have been advised that LIV are in the process of appointing a fire engineer to further investigate and ascertain whether any interim fire measures are required.
Given the lack of clarity regarding potential extraordinary service charges, any remedial works not covered by the Building Safety Fund, and potential impact on the value of the property, we have taken the decision to suspend Resale Market trading for 3 working days for shareholders to consider this announcement.