Calling for clarity as industry implements the Building Safety Act 2022

Since receiving Royal Assent on 28 April 2022, the Building Safety Act 2022 (BSA) has continued to lumber along - coming into effect in phases and throwing up legal complications as it goes.

The government has therefore been required to create secondary legislation – regulations - to seek to clarify and untangle various provisions in the BSA.

The Act is reliant on regulations to provide the detail of many of its provisions. These clarifying regulations do, however, make understanding the obligations increasingly challenging for businesses.

More than 15 sets of additional regulations have come into force so far - not including the commencement regulations. These tweak various parts of the Act, including the rules in relation to approval of individuals as ‘approved inspectors’, or confirming how notices should be served under the Architects Act 1997.

Various other regulations are in circulation in draft, awaiting consultation and approval.

Leaseholder protection

One area of the BSA that has attracted scrutiny is leaseholder provisions for the ‘in occupation’ stage of a relevant building’s life.

Under the BSA’s leaseholder protections - as originally drafted - every time landlords and building owners were required to provide a landlord’s certificate to each leaseholder, for example if remediation service charge was demanded or a flat was sold, the landlord would also be required to provide extensive information about its corporate structure. This included the names of all directors of each company in the group, plus various financial details and accounts.

Regulations making changes to these obligations came into force on 5 August 2023 - The Building Safety (Leaseholder Protections etc.) England (Amendment) Regulations 2023 (the “new regulations”).

These amendments confirm that where a landlord admits that it is responsible for a relevant defect, and has a net worth that means it does not meet the contribution condition, it will not have to provide any company information as part of its landlord’s certificate – a common sense approach considering the volume and cost of providing potentially commercially sensitive information.

Further reform

There is often little consistency across the BSA when it comes to defined terms in different contexts or regulations. Indeed, the new regulations have already been criticised for contradictions between the wording of the legislation and its Explanatory Notes.

Reports of defective drafting have also been lodged in relation to a different amendment and failure to provide for consequences where notice is not served by a current landlord on a ‘responsible landlord’ - the party obliged to pay remediation costs.

While fuelling the discussion around further reforms, it is likely that parties looking to understand this new legislation may seek judicial guidance on how the provisions of the BSA should be interpreted. 

The Court of Appeal has already considered the provisions of the Defective Premises Act 1972 as amended by the BSA – confirming that developers may be owed a duty under the DPA by consultants and contractors.

Next milepost

1 October 2023 will see critical changes brought in under the BSA – impacting the real estate industry.

From this date, existing higher-risk buildings (HRBs) will need to have registered with the Building Safety Regulator (BSR). The Health and Safety Executive also suggests that from 1 October, the registration obligation will expand to include new HRBs. It will also be an offence to allow residents to occupy a building that has not been registered. 

Gateways 2 and 3 are anticipated to come into force from then, meaning that building work cannot start until the BSR approves a building control approval application at gateway 2. Residential units cannot be occupied until the BSR has issued a completion certificate at gateway 3 and the building has been registered, with the ‘golden thread’ of information also given to the accountable person.

The government has now published its long-awaited response to the consultation on implementing the new building control regime for higher-risk buildings and wider changes to the building regulations for all buildings.

The provisions will be implemented through secondary legislation (The Building (Higher-Risk Buildings Procedures) (England) Regulations 2023 and The Building Regulations etc. (Amendment) (England) Regulations 2023)) that will come into force on 1 October 2023.

As expected, the response confirms that much of the detail remains unchanged from the government’s original consultation proposals, with the necessary levels of detail added.

The response provides the industry with greater certainty as to the detail of the new gateway regime for higher-risk buildings and dutyholder regime. The consultation received 160 responses and there are some positive areas where the government has listened to the industry’s comments and adjusted its position.

Fire safety defects

Regulations setting out the terms of the Responsible Actors Scheme came into force 4 July 2023.

The scheme is aimed at major housebuilders and other large developers. Members are required to sign Self Remediation Terms - agreeing to identify and remediate, or pay to remediate, life-critical fire safety defects in residential buildings over 11m that they have developed or refurbished.

It is expected that this Scheme will be expanded over time to cover other developers.

A looming issue for the real estate industry is how long it will take implement the remainder of the BSA, and how much notice those operating in the industry will be given.

Further detail is awaited including the new homes warranty and government response to the second consultation into the proposed building safety levy that will be payable on all new residential building developments in England.

Those operating in the real estate industry understand how important the BSA is. Businesses have taken robust steps to ensure they are meeting obligations and preparing for future changes. The successful implementation of the Act and its further phases does, however, hinge on the government providing the real estate industry with the time, certainty and legal guidance it needs to deliver it.

Richard Symonds is a real estate partner and litigation specialist at Shoosmiths