The Building Safety Act 2022 came into force on 28 June 2022. The purpose of the Act is to make provisions for the safety of people in or about buildings and the standard of buildings.
The new Act brings higher responsibility to building owners to fund essential repairs on buildings above 11 metres tall or over 5 storeys high. It also gives powers to the Secretary of State to restrict irresponsible developers’ ability to build new homes and owners’ rights to prosecute developers.
Some key features of the Act:
Leaseholder protection from remedial costs
- To be a qualifying leaseholder the property must be their main home, is over 5 storeys high or 11 metres tall and are owners of no more than 3 UK residential properties.
- Protections do not apply to leaseholder of buildings less than 11 metres high.
- A qualifying leaseholder will pay nothing to remove dangerous cladding, and contributions asked of leaseholders for non-cladding defects are capped.
- Before seeking contributions Landlords must provide a formal legal certificate or demonstrate that the costs do not relate to works covered by the Act. Any costs that are not recoverable from leaseholders will need to be met by building owners and landlords.
- Freeholders or Landlords may still be able to apply to the Building Safety Fund if the building is over 18 metres tall or at least 7 storeys for the ‘Higher Risk Buildings’ or through the Building Safety Levy for buildings over 11 metres tall. More information is set to become available through the gov.uk website.
- The cap will only apply to non-cladding related work for property valued at more than £325,000 (London) and £175,000 outside London (owners of properties below this ceiling will pay nothing).
- Leaseholders of shared ownership properties will have a cap which reflects their share of ownership in the property.
- New build home buyers will be able to hold the developer responsible for safety and quality issues through the New Homes Ombudsman.
- The government are implementing a series of schemes to protect non-qualifying leaseholders from substantial costs if it is found that repairs are necessary. Although, there are also new obligations on long leasehold tenants (“tenants”) set out in the Act. These include:
- Tenant must not act in a way which creates a significant risk of a building safety risk materialising;
- Tenant must not interfere with safety equipment;
- Tenant should comply with the requests of the Accountable Person (see below for definition) in relation to the duty to assess safety risks in the building; and
- Tenant must limit the risk of serious harm. The Accountable Person can apply for a court order against a resident in certain situations.
Extension of limitation periods
- Previously parties wishing to make a claim under the Defective Premises Act 1972 (DPA) would have only had 6 years in which to make a claim. The Building Safety Act 2022 amends the DPA so that it covers refurbishment and other works in addition to new dwellings extending the time period for compensation claims for retrospective work from 6 years to 30 years.
- Claims under section 1 and 2A of the DPA are extended from 6 years to 15 years where claims accrued after 28 June 2022; but
- Claims under section 1 of the DPA that occurred prior to 28 June 2022 may have an ability to make a claim for up to 30 years but only where the works were completed before 28 June 2022.
- The consequences therefore have the potential to be catastrophic and will cause great concern to developers and freeholders.
- Where claims are being made retrospectively this extension will not apply to claims already settled or that have received final determination by the courts.
New cause of Action against Product Manufacturers and Suppliers
- Extends the ability of leaseholders and freeholders to bring statutory claims against manufacturers, suppliers and contractors in respect of the defective work; or for mis-sold products, if it is found to be contributing to dwellings being ‘unfit for habitation’.
Accountable Person for Occupied High Risk Buildings
- It will be required that at least one clearly identifiable Accountable Person is appointed, who is responsible for ensuring that the fire and structural safety is properly managed for the whole building.
- The Accountable Person must register with the Building Safety Regulator and must obtain adequate insurance.
- The Accountable Person could be an individual, a partnership or corporate body and could be more than one person. Where there is more than one person there must be a principal Accountable Person appointed.
- They will be responsible for assessing safety including fire safety risks and to ensure appropriate repairs of the building; as well as being responsible for appointing a Building Safety Manager who will be responsible for day-to-day fire and structural safety.
- Leaseholders will be responsible through service charges for the costs of all the safety duties carried out by the Building Safety Manager as a Building Safety Charge.
- This could have implications for accountability through the Corporate Manslaughter and Corporate Homicide Act 2007. Having an identifiable person accountable would allow more prosecutions against larger companies, where it has previously been difficult to identify the accountable person and there have been deaths caused as a result of negligent practice.
- There is to be a new building safety regulator and a national regulator for construction products as part of the Office for Product Safety and Standards (OPSS).
- In addition, the Secretary of State will be able to confer powers on relevant authorities, such as the National Regulator for Construction Products and local Trading Standards, to investigate, enforce against and impose sanctions on those who break the rules.
Generally, the Act is promoting higher responsibility for the safety of buildings which have higher risk for occupants. Landlords and building owners have a longer limitation period to claim compensation against suppliers for mis-sold products and tenants have some legal obligations to prevent impact against the safety of the building.
This is a welcome change for many leaseholders but undoubtedly has caused developers and freeholders significant concern. The Building Safety Act 2022 certain paves the way for more significant changes to future developments and how standards and compliance is to be handled.
Published 04 July 2022