Cavity wall insulation (CWI) has been hailed as a quick, simple and relatively inexpensive adaptation that can not only save the occupier money on heating bills, but, potentially, add value to the property itself.
So much so, in fact, that government targets were set to challenge the major energy suppliers to insulate as many homes as possible in an effort to increase the energy efficiency of homes across the UK. Ofgem, the energy regulator, can even fine an energy supplier for failing to carry out their share of the work.
As such, hundreds of independent CWI installers have sprung into action to meet the energy sector’s demand and provide a nationwide sales pitch for the service – not to mention make a considerable profit.
Although no-one can question the sentiments behind the government’s strategy – increasing energy efficiency is undoubtedly a positive step – the way in which the mass sale of CWI has unfolded should be of considerable concern.
In amongst a genuine concerted drive to increase energy efficiency in existing properties, some have found themselves falling victim to unscrupulous companies, leading to damage to their properties.
Unfortunately, social housing providers and landlords have not been exempt from this, leading to thousands of pounds of damage to properties and claims for compensation from affected tenants.
What is more, although the mass installation of CWI might come as a result of government policy, it is not controlled nor overseen by the government itself.
This means when things go wrong there is often confusion over whom to approach for compensation and repair.
With targets and profit on the agenda it is inevitable that an increasing number of social landlords have been mis-sold CWI for their properties. Installation is simply not appropriate for every property. This is especially the case where the cavity is too small, or, where the house is exposed to driving wind and rain.
The cavity between the inner and outer wall is in place to provide a barrier, preventing wind-driven rainwater or groundwater from crossing the divide into the interior space. When this cavity is filled, as with CWI, it can create a ‘bridge’ allowing the cavity to become saturated. This can lead to damp interior walls, mould growth, an unpleasant damp odour and damage to decoration and interior furnishings. If left unchecked, this can lead to serious structural issues and health problems, particularly in children.
This is not to say that all properties in a normally windy, rainy area of the country will be unsuitable. Some houses in these areas will be extremely sheltered. Others will be completely exposed. Most will be somewhere between the two extremes. This can lead to a huge spectrum in exposure conditions to houses, even in the same street. For example, in steeply sloping streets, lower houses will be sheltered, but upper houses are exposed.
This stark difference, which can be across seemingly identical properties, should be of particular concern for social landlords which might have chosen to have all their properties ‘retro-fitted’ with CWI. Without undertaking a detailed survey of each individual property, there is always a risk of problems.
The dangers to tenants can be serious. Aside from damage to their personal property and the fabric of their home, damp and mouldy conditions can lead to a marked increase in upper respiratory tract infections. If an occupant can prove that this is caused by the damp property then they may have a legitimate claim for damages against their landlord.
Tenants can turn to legal action under a number of circumstances:
- To force repair work to the structure of their home
If the landlord is not seen to have made reasonable steps to repair damage to a tenant’s home that tenant is entitled to take legal action to force the landlord to make repairs.
- To obtain damages for breach of the landlord’s repair obligation.
In extreme cases these damages can exceed £4,000 per annum.
- To obtain monies for items lost or damages by damp and mould
This includes items such as clothing & furniture.
- To recover any costs needed to combat the damage
This includes the cost of additional heating, cleaning and decorating required due to the damp.
- To obtain damages for personal injury for upper respiratory tract infections
These vary according to the seriousness of the condition, but awards of £1000-£3000 are not uncommon.
Structural repairs to a property can be equally expensive, though it depends on the type of CWI installed, and how difficult the material is to remove. Quotes for simply removing the insulation for a single property can range from £1,200 - £5,000.
A house will need extensive drying out after the insulation is removed and this can lead to a long wait before further repair work can take place. Frequently, internal plastering and redecoration is required, leading to greater inconvenience for tenants and increased cost for the landlord. Structural issues will need correcting, and damaged wooden areas, replacing. Tenants may need to be re-homed while this work is ongoing. This will lead to further expense for the landlord and a loss of rentable housing stock while properties are lying empty. If multiple occupants, across many properties, are affected, this could cost several thousands of pounds.
Claims by tenants should be investigated thoroughly and quickly. Tenants are required to follow a ‘pre-action’ protocol, where the social landlord will be given opportunity to inspect and repair.
Landlords should follow best practice keep and review records of alleged disrepair at their premises, where disputes arise. This may assist in defending such claims from tenants.
If it is shown that a tenant is claiming damages arising from badly installed or mis-sold CWI, then a landlord may be able to include these losses in a claim against the party responsible for the installation.
With significant costs to be recouped, landlords will want to make sure they are following best practice and targeting the correct organisation or individual to secure compensation.
In the majority of cases, this process will begin with the contactor responsible for installing the CWI. There will be a contract - either written or verbal - which has been breached if the company did not act with reasonable care and skill. Goods must also be of a satisfactory quality. The landlord may be able to claim for a ’misrepresentation’ that the CWI was appropriate for the property in question.
However, several contractors in this field have been wound up, or may prove to have insufficient assets to recover the costs of the initial service and repairs. Some may still be trading and may hold indemnity insurance (a more recent requirement of the CWI schemes). If so, the prospects of recovering some if not all of the associated costs are more favourable.
The same level of protection applies against a contractor who attempts to repair poorly installed or mis-sold CWI, which proves ineffective. For example, if only a patch of the initial CWI is removed, this can cause further damp & cold problems prevailing in a particular area of the property. The same requirements of reasonable care and skill would apply.
Most CWI schemes are guaranteed by organisations such as CIGA (Cavity Insulation Guarantee Agency). Therefore, if issues present themselves, CIGA should be informed. In doing so, make sure that a full complement of repairs is agreed, rather than simple ‘patch’ repair work as set out above. A complete schedule of repairs should be agreed and documented prior to CIGA undertaking any work. CIGA are likely to deny liability for consequential damage beyond removal and replacement of faulty CWI. This is likely to be the subject of litigation in the near future.
Some contractors retain surveyors, either in house or external, to advise whether properties are suitable for CWI. If a surveyor was negligent in that regard – failing to meet the standard of a reasonably competent surveyor – then they may need to dust off their professional indemnity insurance. This is easier for external surveyors, as the ‘buck’ stops with them. In house surveyors are be harder to pursue, if they are true employees of the contractor, and make no assumption of personal liability.
Some CWI schemes have been organised by a third party, who then sub-contracts the work to a surveyor and also to a contractor. If that organiser had a direct contractual relationship with owner of the properties then the organiser becomes liable for work that was not carried out with reasonable care and skill. There have been successful claims for damages in these contractual situations.
This third party liability does not often apply to any energy providers which funded the work in answer to government targets. If that is their sole involvement, then they are unlikely to be held liable by the courts.
Wherever the costs are recovered, it is important to set out a measured, solid case against the relevant party. Problems arising from CWI installation are on the rise with some commentators making comparisons to the scale of the PPI mis-selling scandal. Therefore, it is likely that providers will already be making contingency plans to deal with an influx of claims from social landlords and individuals.
Although the true extent of the problem is yet to be revealed, social landlords who are concerned their properties may be affected by CWI should carry out an independent survey across their portfolio and have appropriate measures in place to deal with enquiries from concerned tenants.