Sean Hooker: Letting agents and landlords will need to disclose more information to tenants on building safety

The fall out from the Grenfell tragedy is proving to have many unforeseen consequences and whilst everybody accepts that everything humanly possible to prevent this happening again should be undertaken, the impact of what needs to be done will have wide ranging effects, not least on letting agents. External wall safety inspections (EWS1) will be required for certain buildings, but a raft of other measures will need to be put in place, putting greater responsibility on property managers as well as the checks an agent will need to carry out before marketing a property. It will go beyond just looking up to see if the property has cladding or not.

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, however, I can comment on the material information a letting agent or landlord should disclose to a tenant about building safety if the new EWS1 form cannot be produced due to the backlog in inspections. 

The dilemma arises for letting agents and landlords who are looking to rent out a property where an inspection or requisite documentation is pending. Consumer protection regulations require material information disclosure and this clearly should include building safety. In the past, for the sale of properties in a leasehold block, an estate agent would have obtained this   information from the property management company of the freeholder; this did not seem to be a priority when a leasehold landlord was renting out the property. 

The fact that a property has not had an inspection or has a certificate does not mean it is unsafe, but it could be unsafe. Prospective tenants (or tenants currently in occupation) should be told that the status of the building is unknown. 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 replace cladding or make other safety changes, they might think twice about signing on the dotted line. 

I sat on a working group that has been looking at this and the challenges it presents. The Group set up by The Letting Industry Council included the redress schemes, ARMA, IRPM, National Trading Standards, ARLA Propertymark, RICS, and other experts who have been trying to devise guidance, a questionnaire, and a declaration an agent can sign to reassure a tenant that the appropriate enquiries were made. This would be a voluntary process at first, but it remains to be seen whether the government or Trading Standards come up with anything more formal.  Agents will have to be on top of this, even if they are not experts - hence the need for some form of disclaimer. 

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, the trade bodies UKALA and ARLA Propertymark, 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. 

There has been a survey of agents on what they currently provide and collate and what they feel is necessary. From this a list of basic information that would be required to be included is currently being drawn up. 

The government is keen to make an announcement in June 2021 that portals will be displaying the information required, so, subject to the technical changes the portals need to put in place, this could all happen fairly quickly. The challenges will be to ensure the collating of the information does not delay the marketing of the property and what is provided is accurate and comprehensive. It will also need rigorous enforcement to ensure that those who are doing the right thing are not disadvantaged by those agents who seek to bypass the requirements or ignore them completely.  

The aim of this work is to protect the consumer and the agent and, yes, there will be protective disclaimers, as well as an onus on landlords to provide accurate information 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.

For some agents, this may appear to be another example of the over-burdensome red tape they're increasingly faced with, however they should ask themselves, what is the impact of failure?  We at the Property Redress Scheme, have seen tenants progressing down a letting, only for it to fall flat or they move in and find that what they thought they were renting is not what they got. People commit both mentally and transactionally when it comes to where they live and are then emotionally disappointed as well as out of pocket. The blame inevitably falls on the agent and why they misled the prospective tenant. If the work I have been involved in helps mitigate your risk of falling into this trap then it will be a job well done.