Legal development

Building Safety Bill 2021-22 Published

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    A year after the draft Bill was published, the government has introduced its long-awaited Building Safety Bill to Parliament.

    The government itself has described the Bill as 'large and complex'. It is expected that the Bill's passage through Parliament will take no less than 9 months. Thereafter, changes will come into force incrementally.

    Key provisions

    The Bill's provisions largely reflect those of the draft. The key tenets are:

    • establishing a new Building Safety Regulator in England to oversee a new, more stringent regime for higher-risk buildings and drive improvements in building safety and performance standards in all buildings;
    • ensuring residents have a stronger voice in the system, and establishing additional protections for leaseholders in relation to financing remediation works;
    • increasing access to redress;
    • driving industry culture change and incentivising compliance;
    • strengthening the Fire Safety Order; and
    • providing a stronger and clearer framework for national oversight of construction products.

    These were the foundations of the draft Bill, and remain the cornerstones of the published Bill. However, there are some key differences.

    Main differences

    The three most significant areas of difference are:

    • Extended limitation period: residents with claims against builders will have 15 years (instead of 6) to bring their claim. Both the Defective Premises Act 1972 and the Limitation Act 1980 will be amended to reflect this extension. The provisions will apply retrospectively (clauses 125-126).
    • Levy on Developers: as signposted by the government in February, a new levy will apply to developers seeking permission to develop high-rise buildings in England ("Gateway 2 levy") (clause 57).
    • Cost of Remediation Work: additional safeguards have been introduced to protect tenants from the landlord's general right to recoup the cost of remedial works by way of service charge (clause 124). However, the issue that made the passing of the Fire Safety Act 2021 so controversial, i.e., who will pay for remedial work, remains unclear.

    Committee recommendations

    Last Autumn, a Housing, Communities and Local Government (MHCLG) Select Committee scrutinised the draft Bill and published an extensive commentary on it in November 2020. The government has responded in detail to 43 of the Committee's recommendations. Its full response can be found here - and is important reading for those who want to further understand the rationale of aspects of the Bill.

    Timetable for implementation

    One of the comments of the MHCLG Select Committee was that the government needed to publish a clear timetable for commencement. They have attempted to do this by way of an 'indicative plan' of what to expect within the next 18 months.

    However, the plan is only indicative and a Transition Board, chaired by Dame Judith Hackitt, will work in conjunction with the HSE to develop it. The government has stated that they 'will continue to refine and provide further information on transition during the passage of the Bill'. Such information will be disseminated through the HSE.

    Notable targets in the indicative plan include:

    • By Spring 2022, the British Standards Institution will publish standards covering the competence requirements for the Principal Designer and Principal Contractor to help dutyholders build the necessary skills, knowledge, experience and behaviours ahead of the Bill becoming law.
    • The Building Safety Regulator is expected to be operating at scale within 12 to 18 months of the Bill receiving Royal Assent.
    • The new regime for high rise residential buildings and other in scope buildings is intended to come into force within 12 to 18 months after Royal Assent.

    It is clear that there is an ambitious amount of work to do over the next two years if the indicative dates are to be met. 

    Areas of concern

    The Bill is likely to remain contentious as it makes its way through Parliament. While interested parties will need some time to scrutinise the lengthy provisions (the Bill extends to 218 pages), obvious areas of concern include:

    Remediation Costs: the Bill does not rule out the possibility that leaseholders will be liable to pay remediation costs. It only requires landlords to demonstrate they have explored alternative ways of meeting remediation costs before passing them on to leaseholders.

    Costs to the Residential Development sector: Impact assessments have indicated that the reforms could cost the industry more than £1bn in their first three years. This is in addition to the Gateway 2 levy referred to above and the new tax for the sector due to be introduced in 2022 (the latter is expected to raise £2bn but the government has not said how much it expects to raise from the Gateway 2 levy). Clearly, these costs will be very onerous to an industry already hit by increased costs, particularly at a time when investment in innovation and sustainability is so important to the sector's future success. The introduction of the levies may also have an impact on new housing supply.

    15 year Limitation Period: this will not protect leaseholders where the developer or contractor responsible for a defective building has become insolvent, or where the building is more than 15 years old. There are also concerns that litigation (e.g. class actions) will not be an effective remedy in circumstances where there has been a whole systems failure, including a regulatory regime which was not fit for purpose.

    Fire safety legislation

    The Bill also introduces further amendments to the Regulatory Reform (Fire Safety) Order 2005 (FSO) (clause 132) which applies to non-domestic premises in England and Wales.  

    The amendments build on amendments to the FSO (which are not yet in force) introduced by the Fire Safety Act 2021 which clarify that the FSO applies to the structure, external walls and entrance doors in buildings containing two or more sets of domestic premises.

    The changes introduced by the Bill impose new requirements on responsible persons in relation to fire risk assessments, the provision of fire safety information to residents and other responsible persons, and co-operation with accountable persons in relation to higher risk buildings.

    As with the clarification introduced by the Fire Safety Act, compliance or non-compliance with guidance issued under Article 50 of the FSO may be relied upon by the Court as supporting compliance with or breach of the FSO.  Statutory guidance is being developed which will coincide with the amendments coming into force.  

    Closing comments

    What can be expected is much more debate and development as the Bill works its way through Parliament, particularly in relation to remediation costs and the levies on developers. 

    In the meantime, those in the sector need to continue to prepare for the new regime by familiarising themselves with the provisions, many of which will remain in substantively the same form as currently but with further detail being provided over the coming months.

    The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
    Readers should take legal advice before applying it to specific issues or transactions.


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