The final text of the Building Safety Act 2022 was published this week, following the giving of royal assent on 28 April 2022. We provide a brief overview of the Act in this Law-Now together with a summary of its commencement provisions. Further Law-Nows will follow in the coming weeks covering specific areas of the legislation in more detail.
The Building Safety Act (the “Act”) received royal assent on 28 April 2022. The long-awaited Act is a hugely significant piece of legislation and overhauls the way residential buildings are constructed and maintained in the UK following the Grenfell Tower disaster in 2017, while protecting the rights of leaseholders. The Act will impact all levels of the industry imposing wide-ranging new duties designed to increase the accountability, transparency and oversight of industry participants and the construction and development of higher-risk buildings. Whilst the provisions of the Act apply to dutyholders in England, there are also provisions that apply to Wales, Scotland and Northern Ireland.
Health & Safety
The Act makes crucial changes to the way fire safety is regulated. It provides for a new regulator, the Building Safety Regulator, which is established under the Health and Safety Executive. Under section 3(1) of the Act, the Building Safety Regulator is required to exercise its functions with a view to:
“(a) securing the safety of people in or about buildings in relation to risks arising from buildings; and
(b) improving the standard of buildings.”
The Act also introduces new duties for “higher-risk buildings” during the occupation phase of a building. These duties are set out in Part 4 of the Act, and they must be fulfilled by either the principal accountable person, accountable person, or residents. The provisions of Part 4 the Act are currently not all in force. The provisions concerning the meaning of "building safety risk" and "higher-risk building" are in force. However, the provisions which relate to the meaning of "accountable person" and other key definitions, registration and certificates, duties relating to building safety risks, duties relating to information and documents, engagement with residents, resident duties, enforcement, special measures, and appeals are due to come into force on such day as the Secretary of State may by regulations appoint. The Government has also committed to introducing secondary legislation to clarify various aspects of the Act.
A key point to keep in mind is that all occupied “higher-risk buildings” must be registered with the Building Safety Regulator by October 2023 It is a criminal offence if a building is occupied but not registered after this date. Clients should therefore start to prepare their buildings and organisations to ensure they are in a position to comply with the provisions of the Act when they come into force.
The Act makes it clear that no costs relating to the removal and replacement of external cladding will be recoverable from leaseholders and therefore building owners will need to look to developers/manufacturers in the first instance, then whether government funding is available. If these sources of recovery are not available, the bill for the works will rest with the building owner and there will be an obligation to refund any costs leaseholders may have overpaid in the last five years as part of their service charge. It may be possible to recover the costs of remedying other non-cladding related fire-safety defects from leaseholders but this is subject to a statutory cap and will only be possible if the landlord’s group does not meet the net worth threshold (currently £2million for each building in scope). The group includes any person associated with that landlord which (in relation to a body corporate) may capture directors, companies with common directors, subsidiary companies and companies with a controlling interest.
These provisions will come into force two months after the passing of the Act (i.e. on 28 June 2022).
The Act also provides the framework for an additional approvals process in relation to “higher-risk buildings”. Two additional “Gateways” are to apply to such buildings in addition to approvals currently required at the planning application stage (referred to as “Gateway One”). Gateway Two will apply prior to commencement of building work and requires the Building Safety Regulator to be satisfied that designs and construction proposals satisfy the requirements of the Building Regulations and the Act. Variations instructed during the course of construction work may also need to be submitted for Gateway Two approval, albeit with a quicker turnaround time (4 weeks instead of 12 for an initial Gateway Two application).
Gateway Three will apply when building work is complete and requires the Building Safety Regulator to be satisfied that the works as built comply with the Building Regulations and that the finished building is safe to occupy. Once Gateway Three has been passed, the Building Safety Regulator will issue a completion certificate. The Act makes it a criminal offence for a building to be occupied prior to this certificate being issued.
Draft regulations setting out the detail of the new Gateway procedures were published by the Government late last year. It is presently unclear when the Government intends to issue these in final form.
The Act significantly changes the liability landscape in relation to the construction of new buildings, both domestic and commercial. Existing rights under the Defective Premises Act 1972(“DPA”) have been expanded and a general right of action for breach of the Building Regulations is to be brought in force. Direct rights of action have also been introduced against construction product manufacturers in relation to domestic properties which are unfit for habitation.
A 30-year retrospective limitation period for claims against construction product manufacturers and also for claims under the DPA has been introduced. A lengthy 15-year limitation period for all of these causes of action will apply going forward.
The Act also allows liability under the DPA, for breach of the Building Regulations, or for other building safety matters to be imputed to related companies by orders obtained from the High Court referred to as “Building Liability Orders”.
The Act’s provisions in relation to the DPA and claims against construction product manufacturers come into force two months after the passing of the Act (i.e. on 28 June 2022). The general right of action for breach of the Building Regulations and the Act’s provisions in relation to Building Liability Orders are due to come into force on such day as the Secretary of State may by regulations appoint.
Conclusions and implications
It goes without saying that the Building Safety Act 2022 will have huge ramifications for the real estate and construction industries in the UK, particularly for residential construction. It will be some time yet before the full significance of the Act will be able to be assessed and we will continue to track developments in relation to the Act over the coming months.