The Building Safety Act – the biggest change to building safety in 40 years
The Act focusses both on improving building safety and on government plans to make the construction industry (and residential developers in particular) rather than residential leaseholders foot the bill for remedying historic fire safety defects in high rise residential buildings. Those changes relating to the industry footing the bill for historic fire safety defects include:
- restrictions on landlords’ ability to recover certain costs through the service charge in some circumstances;
- the power for the government to restrict developers’ ability to implement planning consents and obtain building control approval;
- making associated organisations potentially liable in the event of developer insolvency; and
- new grounds for claims against product manufacturers, suppliers and distributors.
Much of the drafting associated with the recent changes has been produced at pace and there has been little to no time for detailed scrutiny in either the House of Lords or House of Commons. Unsurprisingly, the drafting in some areas is far from polished (and, in some instances, is rough around the edges). Whilst this has been acknowledged during debates in Parliament the overwhelming desire has been to reach Royal Assent and then try and resolve issues through secondary legislation. Those getting to grips with the Act should bear that in mind.
In this article we provide a broad overview of what the Act covers and set out next steps.
We will be publishing a series of articles over the coming weeks covering some aspects of the Act which we believe will come into force on 28 June 2022 (more on this below).
The Act is mainly aimed at England and Wales with some sections applying to Scotland and Northern Ireland.
Parts of the Act apply to all residential buildings and others to building work as a whole but the focus is on higher-risk residential buildings. The Act covers the entire life cycle of a higher-risk building, from design and construction to occupation, with a view to clarifying responsibility for building safety at each stage and introducing an element of continuity with the creation and updating of a "golden thread" of vital information about the building.
The following provisions to come into force on 28 June 2022:
- changes to the Defective Premises Act (DPA) including a new 30-year retrospective limitation period for claims in relation to the creation of a dwelling;
- changes to leaseholders’ liability for costs associated with remedying historic fire safety defects;
- new grounds for claiming against construction product manufacturers who create a product which is inherently unsafe, those who market or distribute construction products in a misleading way and those who fail to comply with construction product regulations;
- new grounds for claiming against cladding manufacturers with a 30-year retrospective limitation period;
- powers which will allow the Secretary of State to create a new construction products regime; and
- amendments to the way in which the architects’ profession is regulated.
Keep an eye out for our notes looking at the changes to the DPA, claims against product manufacturers and service charge changes if you would like to know more about those.
Other changes envisaged by the Act will only come into force when secondary legislation is finalised and issued.
Dates to be decided by the Secretary of State.
Given the government’s indicative timeline (see below) it looks the entire regime will not be up and running for around another 18 months to two years.
No. Although it runs to circa 250 pages large parts of the Act are a framework which gives the government powers to create secondary legislation which will "flesh out" the detail.
The secondary legislation will be developed over the coming months and the government has published an indicative timeline which provides an overview of how they envisage this will happen. As can be seen from the timeline it is going to be a marathon rather than a sprint!
As mentioned above the Act is a framework which enables the development of secondary legislation which will contain much of the detail. We already have an indication of what some of the regulations might look in the form of drafts published last year. These:
- provide details of the new competence requirements and dutyholder obligations which will apply to all new developments;
- set out the proposed new construction product regime;
- clarify what will amount to a higher-risk building (for the purposes of the new enhanced construction and occupation phase regimes);
- set out the new construction phase regime for higher-risk buildings;
- clarify what the new building safety regulator will be able to charge for and new charging provisions for the Architects Registration Board;
- explain when the proposed new registered building control inspector will need to be consulted by the regulator, local authority building control or registered building control approver (the replacement for approved inspectors);
- set out the prescribed principles the accountable person will have to take into account during the occupation phase.
These will be supplemented by regulations providing more details about, amongst other things, the proposed new homes warranties; how developers’ ability to implement planning permission and obtain building control approval will be restricted in certain circumstances; how the proposed new building industry scheme will work; remediation orders (an order requiring a landlord to remedy a specified defect in a specified time) and building liability orders (an order making an associate of a developer liable for the developer’s losses under the Defective Premise Act or the Building Act).
Clearly those elements of the Act coming into force on 28 June (see above) are the immediate focus. Further issues you will need to get to grips with will vary from organisation to organisation and the type of work it undertakes (see below for some suggestions).
- Those involved with commercial development will be interested in the broader changes which are proposed to the Building Act and which are expected to be implemented through secondary legislation in due course. These include shorter implementation times for building regulation approval, the fact that civil claims for breach of building regulations are going to be possible, changes to the approved inspector regime and increased sanctions for breach of building control requirements. Proposals for the introduction of a new dutyholder regime (similar to CDM dutyholders but in relation to building regulations) and new competency requirements will also be relevant.
- In addition to the above house builders will be interested in the proposed new building safety levy; the introduction of building industry schemes; the proposed prohibition on implementing planning permissions and obtaining building control approvals in certain situations; the introduction of building liability orders; changes to the Defective Premises Act; provisions relating to the New Homes Ombudsman and proposed changes to new homes warranties.
- Those involved with the construction of high-rise residential developments will, in addition to the above, be interested in the proposed new regime which will apply to these developments including the new gateways and the requirements for the creation and maintenance of the "golden thread".
- Those involved with managing high rise residential buildings will need to take note of the dutyholder obligations that arise on occupation of such buildings and ensure that they will be able to comply with those requirements once they take effect.
- Architects will be interested in the changes to disciplinary proceedings, continuing professional development and fees payable to the Architects Registration Board as well as the proposals for the new dutyholder regime and the broader changes to the building control regime and changes related to high-rise residential developments.
- Approved inspectors (and those who use them) will need to get to grips with the changes to the approved inspector regime and the introduction of the new role of building inspector.
- The extended limitation periods under the Defective Premises Act and the proposed new dutyholder regime will be of interest to professional indemnity insurers whilst latent defects insurers will be interested in changes
In short, there is something for everyone involved with the planning, design and construction of the built environment as well as the management of the high rise residential buildings in the Act and, to a greater or lesser degree, we are all going to have to get to grips with it.
- A key plank of the proposed changes to try and improve building safety is the creation of a new regulator within the Health and Safety Executive; the Building Safety Regulator. Set up in "shadow" form already it will be responsible for overseeing the safety and performance of all buildings and for enforcing a more stringent regime for higher risk buildings.
- There will be a new national Construction Products Regulator and a new Construction Products Standard Committee. The latter will advise the government on whether voluntary standards for construction products should become regulatory standards and about product test standards.
- There will be new sector specific and industry wide competence frameworks for those involved with the design and construction of new buildings.
- A New Homes Ombudsman will be created.
- There are plans for a new regulatory structure for building control (both local authority and approved inspectors) and the introduction of a new role, a registered building inspector, who will be able to advise local authority building control or approved inspectors who oversee building work.
- The time limits for prosecution for breach of building regulations will be extended and the Building Safety Regulator will have new enforcement powers for breaches by all dutyholders (whether during the construction or occupation phases).
- Dutyholders under CDM 2015 will have new responsibilities to comply with building regulations requirements and will be responsible for showing compliance with the new regulatory regime.
- Those involved in the construction phase will be required to collate and maintain what is described as the "golden thread" of information and to hand it over to the Accountable Person when the building is complete. The golden thread will cover the original design intent and any subsequent changes to this and is to be used to support the safe management of the building through its lifecycle and to assist with safety improvements.
- There will be three new gateways (before planning permission is granted (which has been in place since 1 August 2021), before construction begins and before occupation) and the new duty holders will be expected to show compliance with the new regime before a project can pass to the next stage.
- There will be a new requirement to report structural and fire safety issues which could cause significant risk to life to the Building Safety Regulator.
- Higher-risk buildings will need to be registered with the Building Safety Regulator and to have a completion certificate before occupation. A building assessment certificate will also be required for an occupied higher-risk building where the Building Safety Regulator directs it and such certificate must be displayed. Failure to comply with such obligations will be an offence.
- There will be new dutyholders during the occupation phase – the Principal Accountable Person and the Accountable Person(s). Where a higher-risk building has one Accountable Person that person will also have the role of Principal Accountable Person. Where there is more than one Accountable Person in relation to a higher-risk building then the Principal Accountable Person will been the person who holds a legal estate in the relevant parts of the structure/exterior of the building or has the repairing obligation in respect of those parts. The Act contains detailed provisions setting out what those dutyholders will be required to do (including on-going assessment and reporting of building safety risks) and how they will be expected to interact with the Building Safety Regulator and residents.
- The Accountable Person will be responsible for keeping the golden thread of information up to date and sharing it with the Building Safety Regulator and residents.
- Residents will be encouraged to participate in decisions about the safety risks in their building through a Residents’ Engagement Strategy prepared by the Principal Accountable Person. The strategy should set out what residents will be consulted on, the information to be provided to them and how their views will be taken into account.
- A complaints procedure is to be created and operated by the Principal Accountable Person through which residents can raise concerns regarding the safety of their building or the Accountable Person’s compliance with statutory obligations under the Act.
- Residents will be required not to act in a way that creates a significant risk of a building safety risk arising – for example taking care not to damage relevant safety items (e.g. disabling an automatic closer on a fire safety door). They will also be required to comply with an Accountable Person’s reasonable request for information to allow the Accountable Person to carry out their role. Residents failing to comply with these requirements may be subject to a court order.
- New terms relating to building safety will be implied into leases of dwellings in higher-risk buildings. Broadly speaking these permit access by the landlord for building safety purposes and oblige the landlord to comply with building safety duties. It will not be possible to exclude these terms.
- Leases of premises including or consisting of a dwelling in a higher-risk building which is granted for a term of seven years or more under which the tenant is liable to pay a service charge (excluding certain social housing tenancies) will be construed as though the service charge also covers the cost of specified building safety measures taken by an accountable person. It will not be possible to exclude these provisions.
Qualifying leaseholders will receive certain financial protection (by the imposition of a costs contribution cap) from the costs associated with defects causing safety risks (fire spread/structural collapse) in buildings exceeding 11m in height. The Act also imposes liabilities on certain landlords for remediation of such defects. No service charge will be payable by qualifying leaseholders in respect of cladding remediation.
Leaseholders in buildings above 18 metres are offered protection by the Government’s £5.1 billion Building Safety Fund for the removal of unsafe cladding which exists separately to the protections under the Act.
A Building Safety Pledge has also been signed by 45 developers (as of 12 May 2022) in which they have committed to fix life-critical fire safety issues on residential buildings exceeding 11 metres in height which have been developed or refurbished by them since 5 April 1992 (other than those in relation to which they acted solely as contractor). The pledge equates to a contribution from developers of a minimum £2 billion. The signatories will not draw upon the Building Safety Fund or the ACM Fund in respect of these remediation works and will refund money already received from the taxpayer to fix their buildings.
The Act represents a sea change for the construction sector and those involved with high rise residential buildings in particular. It will be interesting to see how the detail develops over the coming months and years.