The Building Safety Act 2022 – A Necessary Change (Applicable to England Only)
Following the terrible disaster of the fire that destroyed Grenfell Tower in 2017, much consideration has been given by Parliament in relation to what can be done to improve fire and building safety. The tragedy, which killed 72 people, prompted Dame Judith Hackitt to commission an independent review focusing on issues relating to high-rise residential buildings. In May 2018, Building a Safer Future, Independent Review of Building Regulations and Fire Safety: Final Report was published, which set out over 50 recommendations for Government consideration as to how to implement a more vigorous regulatory system. The recommendations made by Hackitt were intended to apply to both new and existing high-rise buildings. As a result, the Building Safety Bill was introduced to Parliament in July 2020, making its way through Parliament briskly, and gaining Royal Assent on 28 April 2022.
A Brief Overlook of the Act
The Building Safety Act 2022 is primary legislation establishing a legal framework for building safety. The Act covers building design, construction and those currently in occupation. The central principal of The Building Safety Act 2022 is the responsibility on building designers, contractors, and clients to ensure compliance with building regulations and the Act. As well as ensuring compliance with regulations and legislation, the Act addresses how remediation costs are to be borne by leaseholders and has introduced certain protections for long leaseholders who are wanting to sell their property.
New Regulatory Bodies
The Building Safety Act 2022 has created three new bodies who are responsible for providing effective oversight of the Act:
- The National Regulator of Construction Products (NRCP): the role of the NRCP is to ensure more effective construction product regulations as well as coordinating market surveillance and enforcement action across the UK. This new regulatory regime, however, will not come into force until Parliament has considered and approved the necessary secondary legislation.
- The Building Safety Regulator (BSR): it is the responsibility of the BSR to monitor building performance and safety of all buildings, with a specific focus on high-rise buildings.
- The New Homes Ombudsman: again, following secondary legislation, developers of new-build homes will be required to become and remain a member of the New Homes Ombudsman Scheme. The secondary legislation will set out the framework for enforcement action.
Qualifying Leaseholder Protections
The Act protects ‘Qualifying Leaseholders’ in buildings over 11 metres or 5 storeys in height from both remedial costs associated with unsafe cladding and works associated with non-cladding ‘relevant defects’. Freeholders are forbidden by the Act to pass on the cost of historical remedial works or the cost of replacement cladding on to any leaseholder, including Non-Qualifying Leaseholders who are linked to the building developer if, on February 14 2022, the landlord group had a net worth in excess of £2 million multiplied by the number of ‘relevant buildings’ of which the landlord was, on that date, a landlord under a lease of that relevant building or any part of it. If called upon to contribute towards historical building safety defects, the amount Qualifying Leaseholders could be required to contribute will be capped at £15,000.00 in Greater London and £10,000.00 outside of Greater London. Qualifying Leaseholders may also spread the cost over a 10 year period. The cap may, depending on the value of the property on 14 February 2022, be higher or zero. It is important to note that these protections automatically pass on to any future buyers.
Under the Act there are a number of definitions which must be carefully considered which we outline as follows:
- ‘Qualifying Leaseholder’: a leaseholder with a long lease of a property in a relevant building and, on 14 February 2022, the property was their main home or they owned no more than three properties in the UK.
- ‘Relevant building’: this is a self-contained building, or part of a building, in England that is either 11 metres high or at least five storeys.
- ‘Relevant landlord’: the landlord under the lease on 14 February 2022 or any superior landlord at that time.
- ‘Relevant defect’: a defect arising out of works carried out in the last 30 years which “causes a building safety risk”. This is not limited to cladding, but also incorporates a risk to the safety of people in or about the building arising from: (a) the spread of fire; or (b) the collapse of the building or any part of it.
Conclusions and Implications
It goes without saying that The Building Safety Act 2022 will have huge implications on the property and construction industries. Numerous construction bodies have supported the passage of the Act and have recognised the need for a reform of the building safety system. However, while it is a welcomed change, it will be some time before the full significance of the Act comes into force.
How We Can Help
If you think you might be affected by the above whether as a freeholder or leaseholder, we are here to help and advise. Contact our experienced residential conveyancing team on 01543 420000 or email firstname.lastname@example.org.