Building Safety Act 2022: An overview

30th May 2022

Walker Morris Construction & Engineering experts Tom Peel, Paul Hargreaves, Sue Harris, Deborah Walls and Inam Hasan provide an overview of the key elements of the Building Safety Act 2022, of which all parties concerned with any aspect of building safety should be aware.

In September 2021 we gave an update on the Building Safety Bill introduced to Parliament in July 2021. Numerous changes were made as the Bill progressed through the legislative process. It finally became law on 28 April 2022, heralding a fundamental overhaul of the building and fire safety regime post-Grenfell, with more to come.

Further upcoming briefings will focus and expand on those aspects of the new law of particular relevance to developers and leaseholders. In the meantime, please do not hesitate to contact one of the team for advice or assistance.

Key elements

‘Higher-risk buildings’, the dutyholder and gateway regimes

• New regulations (to be consulted on) will place duties on those who procure, plan, manage and undertake building work and will apply to all work to which the Building Regulations 2010 apply. Duties of cooperation, coordination, communication and competence will apply for building work associated with ‘higher-risk buildings’. During the occupation phase these are defined as at least 18 metres in height or having at least 7 storeys and containing at least two residential units. The definition of higher-risk buildings during design and construction is similar but awaiting clarification – previously published draft regulations included care homes and hospitals meeting the same height threshold.

• A gateway regime for higher-risk buildings from planning to occupation, including a building safety levy on developers when they apply for building control approval and mandatory occurrence reporting. The new Building Safety Regulator – established within the Health and Safety Executive and with toughened existing and new powers – will be the building control body for higher-risk buildings.

• As part of the more stringent regulatory regime applying to higher-risk buildings throughout their lifecycle, a ‘golden thread’ of documents and information to be provided to the ‘accountable person’ – the landlord/freeholder in charge of repairing the building – once construction is complete. Note the original proposed requirement to appoint a ‘building safety manager’ was scrapped.

Redress

• Extending the limitation period for claims brought under section 1 of the Defective Premises Act 1972 (DPA) from 6 to 30 years (for work already completed) and from 6 to 15 years (for work completed in the future). Claims could be made against anyone involved in the work, including landlords, developers, contractors, architects and surveyors.

• Expanding the DPA to include refurbishment and other work to an existing dwelling (limitation period 15 years).

• Bringing section 38 of the Building Act 1984 (BA) into force, allowing claims for compensation to be brought for physical damage (injury or damage to property) caused by a breach of building regulations (limitation period 15 years).

• Building liability orders allowing the courts to extend a company’s liabilities, incurred under the DPA or section 38 of the BA or as a result of a building safety risk, to any other ‘associated’ companies (used here the term means sister or parent companies).

• A new cause of action that enables claims to be brought where there has been a failure to comply with a construction product requirement in regulations, the marketer/supplier of a construction product makes a misleading statement in relation to it, or a product is manufactured that is inherently defective (a 30-year limitation period applies to past defaults in relation to cladding products; otherwise it is 15 years). There are powers to introduce new construction products regulations.

Other leaseholder protections

• Powers to compel companies to remediate the buildings for which they are responsible, including the ability to block non-compliant companies from the market.

• Provisions (yet to be fully set out) requiring landlords to explore alternative funding sources before passing on the cost of certain remediation works to leaseholders.

• ‘Qualifying leaseholders’ – broadly leaseholders in buildings at least 11 metres high or having at least five storeys – will be protected from cladding remediation service charges.

• For remediation of historical non-cladding defects, “waterfall” protections with developers paying first, followed by landlords. Where landlords do not have the means to pay, costs to be shared with qualifying leaseholders but capped at £10,000 (£15,000 in London) and spread over ten years. No costs to be passed on where the landlord or their ‘associate’ is responsible for the defect or where the landlord and any person ‘associated’ with them have a combined net worth over £2 million (‘associate’ and ‘associated’ in this context includes sister or parent companies but also extends to partners in a partnership and directors).

• A requirement that developers must provide new build home warranties to purchasers of new homes.

• A new homes ombudsman scheme will provide dispute resolution for, and determine complaints by, buyers of new build homes against developers. Powers to require developers to become scheme members.

When will the Act take effect?

We can expect a lot of the detail to be set out in regulations to be consulted on as the Act starts to be implemented in stages over the course of the next 18 months. The government’s transition plan published in July 2021 gives an indication of the likely timescales.

The next big date is 28 June 2022, when a number of key provisions come into force. These include: the leaseholder “waterfall” protections; the expansion of the DPA; the extension of the various limitation periods for bringing claims under the DPA and BA; and the new cause of action in relation to construction products.

Developers in particular should review both their potential exposure to such claims (including retaining potentially relevant documents) and any ability to claim against third parties. They should review/update third party contractual arrangements/protections and professional indemnity cover accordingly, and ensure that document retention and other relevant policies/processes are amended to reflect the longer time periods.

How we can help

The new Act is a long and complex piece of legislation, with more to come. At Walker Morris we have a knowledgeable and expert team who advise and assist a range of clients with properties and historic construction projects facing claims connected to building and fire safety and other external wall construction-related issues. If you have any queries about the Act and how it may affect you, or require assistance with training and/or updating policies and procedures, please get in touch with one of the team:

For leaseholders and tenants: Paul Hargreaves and Sue Harris

For developers: Tom Peel, Deborah Walls and Inam Hasan

For lenders and landlords: Karl Anders