Property transactions are now likely to include extra checks on construction methods, writes KATIE CORRIGAN
The risk posed by Reinforced Autoclaved Aerated Concrete (“RAAC”) has been high on the news agenda with many schools in England postponing the start of term or closing. Attention has focused on schools and other public buildings, but RAAC was widely used in construction from the 1950s to the 1990s. RAAC was principally used in flat roofs and the expert opinion is that many offices and warehouses built during this period may also contain it.
So what are the implications for the commercial property sector?
According to the HSE “RAAC is now life-expired” but that does not mean that all buildings with RAAC are liable to immediate collapse. According to a team a Loughborough University, who have been researching the ageing of RAAC, the key risk is contact with water as this makes it 25% weaker.
But the problem is how to assess whether a property contains RAAC and what condition it is in.
For people in the property sector, the parallels with asbestos will be evident and the same approach should be taken: the property needs to be assessed by an expert to determine whether RAAC is present; the condition of the RAAC needs to be analysed and thereafter monitored for signs of deterioration, or removed if required.
But before calling in the experts (who are likely to be in short supply) what can and should a property owner or tenant do?
Firstly, assess the age of the property. Was it built or extended/altered between the 1950s and 1990s? Planning records and title deeds may assist, but unfortunately most planning documents pre-dating 2000 are not available online. Anecdotal evidence may be needed to plug the gap.
Secondly, if the property may be within the relevant age range, are there any areas of flat roof? Or are there other parts of the building which may contain RAAC panels? The Department for Education published an identification guide in 2023 Reinforced autoclaved aerated concrete: identification guidance (publishing.service.gov.uk)
If there are concerns following an inspection then appropriate safety measures would need to be taken and an expert engaged to formally assess whether the material in question is RAAC and what condition it is in.
What if the property is leased? Who is responsible? Based on the terms of most commercial leases, the onus will be on the tenant, but possibly not exclusively, and, therefore, the terms of the lease would need to be considered. As a quick guide, we would expect the position to be as follows:
Inspection – inspection and identification will be a tenant responsibility in terms of health & safety legislation, in ensuring that staff have a safe place to work.
Maintenance/monitoring – if any RAAC materials are identified, it is also likely to be a tenant responsibility to carry out on-going monitoring, and general maintenance, to ensure that risks such as water ingress are minimised.
Replacement – if this is necessary, then the question of who bears the cost will depend on the wording in the lease. Most leases state that the tenant is liable for latent defects and this would be a latent defect.
However, it is also an extraordinary repair and, unless the lease specifically states that the tenant is responsible for extraordinary repairs, the Scottish case law has determined that extraordinary repairs are not a tenant’s responsibility.
The HSE guidance stating that “RAAC is now life-expired” seems to be a pretty clear statement that it would be an extraordinary repair. However, a landlord is likely to argue that it is a tenant responsibility, and this is where the courts may have to determine the position on a case by case basis.
Insurance – repair/replacement may be covered by insurance. But if poor maintenance, e.g. clogged gutters, are a contributing factor in the condition of the RAAC then insurance is likely to be a non-starter. It is also likely that on renewal it will be a specific exclusion. It will therefore be important to check the dates of insurance renewals and act quickly if the date is imminent.
When it comes to buying and selling property from now on, it’s likely that buyers will look for confirmation the property does not contain RAAC and that buildings surveys will need to specifically address this point.
Returning to the parallels with asbestos, RAAC is likely to be dealt with in the same way although in the shorter term we can expect this to attract the same degree of concern as cladding following the Grenfell tragedy.
Unfortunately, this is likely to make transactions slower and more expensive but it is a small price to pay for certainty, and better, safer building stock. As always, it pays to take good advice early.
Katie Corrigan is a senior legal director, and Head of Real Estate at Vialex
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