The Building Safety Act received royal assent on 28 April 2022, though, not all the provisions will come into force immediately.
The Government published a transition plan that sets out when each part of the Act intends to come into force:
The Act will impact all levels of the construction industry as it imposes new duties designed to increase accountability and responsibility for overseeing the construction and development of “Higher-Risk Buildings”.
What is a Higher-Risk Building?
For the purposes of this article, we have focused on the definition in Part 3 of the Act which defines a ‘Higher-Risk Building’ during design and construction as: “a building in England that is at least 18 metres in height or has at least 7 storeys and is of a description specified in the regulations made by the Secretary of State”. This drafting intends to give the Secretary of State discretion to update or amend the building types listed over time.
1) Extension of liability under the Defective Premises Act (‘DPA’)
- Homeowners may, under the DPA, bring claims against developers, contractors and professional consultants if their dwelling is ‘not fit for habitation’. The previous limitation period of 6 years has been extended to 15 years for any work carried out on or after 28 June 2022. Any work carried out prior to the 28 June will have a retrospective 30-year limitation period.
2) Enforcement of building safety measures (remediation orders and BLOs)
- Remediation orders can be issued against landlords and their associated companies, requiring them to remedy relevant defects that cause a building safety risk.
- Building Liability Orders (BLOs) can be granted by the high court to extend the specific liabilities of one body corporate to any of its associates and make them jointly and severally liable.
3) New Homes Warranty
- New homes warranties have been introduced requiring developers of new build homes to provide buyers with a warranty lasting 15 years.
4) Golden Thread and competency requirements for “Higher-Risk” Buildings
- The idea of a ‘golden thread’ has been introduced to ensure building information is always maintained throughout the life cycle of Higher-Risk Buildings.
- It is the duty holder’s responsibility to maintain the golden thread and the Act introduces a requirement for the duty holder to be ‘competent’ i.e. have the necessary skills, knowledge and experience for their role.
5) Cap on leaseholder contributions
- The cost of replacing defective cladding cannot be recovered from tenants. Landlords and developers will be responsible for those costs.
- Landlords may pass on the costs of remedying building safety defects to tenants through the service charge payable under their leases. The Act contains controls on what can be included in the service charge and a statutory cap on the amount that can be charged.
6) Role of an Accountable Person
- The Act defines an ‘Accountable Person’ as someone who holds a legal estate in possession of the common parts or, alternatively, someone who has a relevant repairing obligation in respect of the common parts.
- The Accountable Person will be responsible for carrying out various tasks, for example: carrying out a risk assessment; preparing safety case reports; notifying the regulator; mandatory reporting requirements requiring prescribed information about building safety risks is provided to the regulator. The Government have published a factsheet as guidance on the role of the Accountable Person: Accountable Persons: factsheet – GOV.UK (www.gov.uk)
It is important to assess the impact it will have on your business. Construction businesses should assess internal reporting procedures to make sure they are able to comply with the Act when it comes into force over the next 12-18 months.
As liability is extended under the DPA, developers should consider stepping down any liability in their construction contracts.
For more information or guidance on the implications of the Act on your business, please do get in touch with Construction Partner Bal Manak.