Blake Morgan looks at The Building Safety Act – A Law of Unintended Consequences?
Richard Wade, Head of Construction at Blake Morgan look at the legal changes for the sector.
For anyone involved in the property and construction sectors, the newly enacted Building Safety Act 2022 ('BSA') is a seismic change in the legal landscape.
And yet, surprisingly sparing coverage has been given to this key piece of legislation, brought about by the tragedy of the Grenfell disaster, the subsequent review led by Dame Judith Hackitt and some frenetic parliamentary activity. The last of which might have been drowned by other Westminster news recently.
The BSA is now in force (partially, at least) from 28 June this year and it introduces a regime overseen by a new Building Safety Regulator, with particular emphasis on 'higher-risk buildings'. Its reach is almost overwhelmingly broad but to say that it has its critics would be an understatement.
Amongst others, it will impact on landlords, developers, tenants, management companies and leaseholders, as well as contractors and construction professionals, especially those involved in residential or multi-occupancy buildings. It opens the door to claims against the manufacturers of products, and brings a raft of duties for building owners, many of which are yet to be enacted.
Two particular aspects of the BSA are worth focusing on. Although, it certainly doesn't substitute a much deeper dive into what the BSA is likely to mean for everyone!
- Landlords or management companies are now restricted from recovering the cost of rectifying safety defects via service charges
Arguably the most significant (and controversial) provision. Although this change will only apply to certain leases, this effectively shifts the responsibility for correcting major safety defects from leaseholders to freeholders/landlords in one of the largest retrospective legislative changes ever seen.
This is particularly significant for buildings where urgent work is still required to remediate unsafe cladding. Over the last few years, there has been huge activity in this respect much of which has been paid for via the Building Safety Fund ('BSF'). This was used to speed up the process of remediation works, particularly in the wake of Grenfell, and has been extremely effective.
However, the BSA follows the (Government-led) drive to ensure that the cost for such work does not fall on the shoulders of either (1) home-owners or (2) the taxpayer but, instead, that developers and landlords foot the bill. Whilst understandable, in principle, this has created substantial uncertainty over how ongoing and future remediate schemes might be implemented and paid for, meaning that many projects are now being delayed.
- The limitation period for (existing) claims that fall under the Defective Premises Act (for defects that cause a risk to people by fire spread or building collapse) has been extended to 30 years
This 'headline-grabber' is a particularly significant change, considering (a) the breadth of types of defects covered and (b) the extent of development activity since the early 1990s.
How wide will the 'litigation floodgates' be opened because of this? Despite the uncertainties, it is clear that the BSA will have a profound impact on the sector. How will it impact future projects? How widely will it be felt in retrospect?
Little is known, yet, but if there is consensus, there is significant concern about how the effects from this new legislation, which is already in law, remain extremely difficult to predict.
For further information about the Building Safety Act 2022 or any other construction or property queries contact Richard Wade, Head of Construction, at Blake Morgan, at [email protected]
blakemorgan.co.uk
Blake Morgan LLP is a UK law firm with offices in: Cardiff | London | Oxford | Reading | Southampton
