It has been talked about and debated for months, but the Building Safety Act 2022 has now finally received Royal Assent and is already partially in force. Much has been written about what the new Act says, but what does it mean in practical terms for the construction industry? The checklist below seeks to identify steps which should be taken now by those in the industry.

Review standard terms and conditions

Prior to the 2022 Act coming into force, parties generally had six years to commence a claim for defective work under the Defective Premises Act 1972. In light of the extended limitation periods being introduced by the 2022 Act, parties should consider if their current standard terms and conditions are adequate for the increased risk.

Review document retention policy

The extended limitation periods also mean that records may need to be kept for much longer periods than what is standard practice for most. Parties should review document retention policies to ensure that they are still fit for purpose.

Review pricing for risk

When submitting or reviewing prices for works, parties should consider whether an increase is appropriate for risk in light of the extended periods in which claims may be brought.

Increase provision in accounts

In the event that parties make provision in their financial accounts for building claims, thought should be given as to whether such a provision requires to be increased, given the extended period for which claims will be capable of being brought under the revised Defective Premises Act 1972.

Claims review

Parties should review their project portfolios in order to identify any sites where a claim which was previously time barred is now capable of being brought and devise strategies so that potential claims can be investigated and advanced/defended as appropriate.

Insurance

Parties should also review their current and past insurance policies to understand the extent of coverage for any potential claims and identify any gaps.

New legislation

Keep up to date with the 2022 Act as it becomes fully in force and get ready to comply with the new regulatory regime.

It is worth noting that the Building (Scotland) Amendments Regulations 2022 will come into force on 1 June 2022, which provide that (i) combustible material will be banned on high-risk buildings over 11 metres (thereby removing the previous option of using non-combustible materials which had passed fire testing); and (ii) the highest risk metal composite cladding will be banned on all new buildings of any height.

Finally, parties should make sure that their management and site teams are aware of the relevant provisions in the 2022 Act in order to reduce the risk of non-compliance, some of which include:

  • higher-risk buildings (as defined in the 2022 Act) must be registered with the new Building Safety Regulator and, until the buildings are registered, they cannot be lawfully occupied;
  • the Building Safety Regulator will be able to issue compliance and stop notices, whereby action must be taken where it is considered that building regulations have not been or are unlikely to be complied with;
  • notices requiring the removal or alteration of work as a result of failing to comply with building regulations will be capable of being issued up to 10 years after completion (an increase from 12 months previously);
  • the period of cover under new build warranties is being increased to at least 15 years, with financial penalties for failing to comply with the warranty obligations; and
  • building control approval will automatically lapse if construction work is not commenced within three years.