The legislative and regulatory detail introduced to support the Building Safety Act is ever evolving. Phil Parkinson and Aisling McWilliams provide a summary of the key changes
Over a year has passed since the Building Safety Act 2022 (BSA) ushered in a new era of building safety rules and regulations in England. Since then, a series of regulatory changes have meant that the responsibility for building safety has evolved – placing the ‘responsible person’ (RP) at the forefront of these crucial reforms. As the building safety framework continues to take shape, it’s essential to understand the considerations and obligations that now rest on the shoulders of the responsible person.
In addition to this, from leaseholder protections to the implementation of the cladding safety scheme and the recently closed building registration process, the past year has witnessed several pivotal developments that impact the way buildings must be managed and maintained. Understanding parties’ responsibilities under the new regulations is paramount as we navigate the evolving landscape of building safety. Below, some key issues are considered which have been at the heart of debate in recent months, together with a summary of key judicial involvement to date.
A matter of height
The Higher-Risk Buildings (Key Building Information etc) (England) Regulations 2023 came into effect on 6 April 2023. These regulations apply to buildings with at least two residential units that are either a minimum of 18 metres in height or have at least seven storeys.
The regulations mandate that the principal accountable person (PAP), responsible for the repair and maintenance of the building’s structure and exterior, is to provide key building information to the Building Safety Regulator. Key building information includes details about the building’s use, materials, structure, energy considerations and emergency planning. The PAP is also required to promptly notify the regulator of any changes to this information and comply with any regulatory directives.
Additionally, the regulations outline the process for determining the specific responsibilities of other accountable persons, individuals or entities responsible for the day-to-day management of the building. These responsibilities are determined based on factors such as the number of accountable persons and their legal or contractual rights over the building or its components, with particular reference, it is anticipated, to the repairing obligations of a building.
Cladding safety scheme
The cladding safety scheme (CSS) previously known as the mid-rise scheme, is an initiative with the aim of enhancing building safety, particularly in cases where cladding issues pose a risk. The CSS encompasses various aspects, and some key points are set out below.
- A Fire Risk Appraisal of External Walls is a mandatory requirement when applying for the CSS. The survey must adhere to the standards specified in PAS 9980 to identify potential fire hazards associated with external building walls. (PAS 9980:2022 provides guidance and recommendations for evaluating the fire risk associated with wall construction and cladding in multi-storey residential buildings that house multiple occupants.)
- A key element is the ‘responsible entity’. Only individuals or organisations legally responsible for a building’s external repair and maintenance can receive funding through the CSS via a grant funding agreement. A responsible entity can include the building’s freeholder, a head leaseholder, registered social housing providers, management companies, or right-to-manage companies with primary repair responsibilities.
- In cases where multiple buildings are physically connected or linked, only those exceeding 11 metres in height are eligible for funding under the CSS. The application process also involves verifying the presence of at least one lease for a single residential dwelling within the building. This lease should meet specific criteria, including being granted on market terms, requiring exclusive residential occupation, and having an original term of not less than 21 years. While shared ownership leases may qualify, leases of units owned by social housing providers with week-to-week or month-to-month tenancies are unlikely to be eligible.
Much comment has been made concerning the various amendments to leaseholder protections implemented on and effective from 5 August 2023. Landlords are now required to use a simplified landlord certificate form, which informs leaseholders in relevant buildings about their liability for remediation costs. This certificate must be provided to all leaseholders, regardless of their lease status. Previously issued certificates do not need to be reissued.
The amendments reduce the evidence-sharing requirement when landlords accept liability for a relevant defect, streamlining information sharing to essential details for determining liability for remediation costs. Additionally, they expand the entities authorised to recover remediation amounts from landlords or developers via a remediation contribution order. Furthermore, Homes England can also apply as an ‘interested person’.
The regulations set specific timelines for landlords to provide certificates. Failure to comply within these timelines can result in costs not being passed on to leaseholders. The regulations also allow for an extension to the appeal time limit with the permission of the First-tier Tribunal. It will be vital to address the points highlighted in the amendments promptly to ensure compliance. Failure to do so could hinder the ability to recover service charge costs from tenants – including both qualifying and non-qualifying leaseholders – for dealing with defects in the building.
Responsible actors scheme
The responsible actors scheme (RAS) was introduced in July 2023. The scheme recognises responsible developers who have taken actions to identify and remediate, or fund the remediation of, life-critical fire safety defects in residential buildings over 11 metres in height that have been developed or refurbished in England over the 30 years ending on 4 April 2022.
Developers who are eligible for the scheme but choose not to join, or fail to comply with the membership conditions, may be added to the RAS prohibitions list. Being on this list may restrict them from undertaking major development projects and securing building control approval, with limited exceptions – although the full implications are not yet clear.
These initiatives and amendments are seen to be essential steps in enhancing the safety of buildings and protecting the interests of leaseholders and the public. They aim to address fire safety concerns related to cladding and ensure that responsible entities take appropriate actions to rectify defects.
Accountable persons / principal accountable persons
As set out previously, all high-risk buildings (HRB) under the BSA 2022 will have a PAP, and possibly, depending on the nature of the building and its ownership structure, one or more other accountable persons (AP).
In any property transaction involving a HRB, it will be important to establish who the PAP and other APs (if any) are and whether they have complied with their obligations under the BSA 2022. To be an AP, an individual or entity must be under a relevant repairing obligation in relation to any part of the common parts of an HRB. The common parts are:
- the structure and exterior of the building, except so far as included in a demise of a single dwelling or of premises to be occupied for the purposes of a business, or
- any part of the building provided for the use, benefit and enjoyment of the residents of more than one residential unit (whether alone or with other persons).
A relevant repairing obligation is an obligation to repair arising under a lease or by virtue of an enactment. Depending on how the ownership of the HRB and responsibility for the common parts has been structured, the accountable person could be, for example, the freeholder, an intermediate landlord, a management company or a right-to-manage company.
There are specific provisions for HRBs which are commonhold and which are not considered here due to their rare occurrence.
If no one is under a relevant repairing obligation, the APs will be the person(s) with a legal estate in possession of any part of the common parts. Possession does not include the receipt of rents and profits or the right to receive the same. If there is only one AP for the building, they are the PAP.
If there is more than one AP, the PAP is the person who:
- holds a legal estate in possession in the relevant parts of the structure and exterior of the building, or
- does not hold a legal estate in any part of the building but is under a relevant repairing obligation in relation to the relevant parts of the structure and exterior of the building.
The relevant parts of the structure and exterior are the structure and exterior of the building, except so far as included in a demise of a single dwelling or of premises to be occupied for the purposes of a business.
Golden thread of information
A feature of the regime created by the BSA 2022 is the ‘golden thread of information’, which is the information needed to understand a building and the steps needed to keep that building and the people in it safe. Golden thread information is statutorily required to be kept up to date and, at different points throughout the lifecycle of the building, must be transferred to the relevant duty holder.
The completion certificate issued by the Building Safety Regulator forms part of the golden thread, together with all the information which accompanied the application for the completion certificate.
It is a statutory requirement that the golden thread information is held electronically; in the context of property due diligence, it may be most practical to require a seller to make this available to a buyer directly.
A significant element of the golden thread concept is the ‘resident engagement strategy’, which will become a mandatory requirement for high-rise residential buildings under the BSA. This strategy will focus on open and transparent communication with residents, emphasising their safety responsibilities and management. The Building Safety Regulator will review, approve, and sign off on resident engagement strategies when issuing building safety certificates, but at the time of writing the full detail remains unclear as we await further secondary legislation and guidance.
Emerging case law
Alongside the new regulations, there has been significant, if somewhat limited, case law in 2023 regarding the obligations under the BSA. Below we provide summaries of the most notable matters and emerging legal precedents regarding leaseholder protections, remediation and remediation contribution orders and landlord certificates.
Waterside Apartments was an application to the First-tier Tribunal (Property Chamber) (the FTT) in which the leaseholders submitted that the service charge in respect of the costs incurred by the landlord for the installation of a fire detection / alarm system and remedial works to the automatic and manual opening vents, as well as costs of fire marshals, were unpayable. The argument dealt with schedule 8 of the BSA and whether it applied retrospectively. The FTT disagreed and confirmed that the leaseholder protections within schedule 8 of the BSA don’t apply retrospectively to charges incurred and demanded prior to the commencement of the BSA 2022.
Radcliffe v Meeson
In Radcliffe v Meeson the Upper Tribunal assessed whether a landlord could recover the costs of fire safety measures from leaseholders through service charges. In this case, involving a nine-storey residential building, the FTT had ruled against the recovery of a significant portion of ‘waking watch’ costs. The measures were implemented following fire safety concerns identified by a fire officer about damage to the fire alarm panel. The waking watch continued even after the panel was fixed but was eventually reduced. Leaseholders argued that earlier risk assessment could have identified defects, making the waking watch unnecessary. The Upper Tribunal upheld the FTT’s decision, emphasising the need for timely fire risk assessments and highlighting that landlords can recover waking watch costs but may face reductions if they neglect their obligations. It also underscores the importance of early assessment of construction materials for potential fire risks.
Leaseholders at 2-4 Leigham Court Road v Kedai Limited
In Kedai, the FTT dealt with section 123 of the BSA 2022, which introduced remediation orders for which applications may be made to the FTT in respect of ‘relevant defects’ in a ‘relevant building’. Following concerns regarding the aluminium composite material cladding, a collective of leaseholders brought an application to the FTT for a remediation order, which was granted. The decision focused on the purpose of the BSA 2022, which was to protect leaseholders from potential harm caused by unsafe buildings and to stop them from facing significant service charge costs in respect of remedial costs, setting aside more minor procedural or technical issues which deviated from this key purpose.
Will v G&O Properties
Regarding the provision of landlord certificates, in Will v G&O Properties the FTT held that the Building Safety (Leaseholder Protections) (England) Regulations 2022 made no provision for leaseholders to seek an order from the tribunal requiring a freeholder to provide a landlord’s certificate, despite this power being expressly envisioned in the BSA 2022 – namely, schedule 8(5)b.
However, it is arguable the need for such a power is limited. Where a landlord fails to provide a landlord’s certificate within four weeks of a leaseholder’s request, the landlord is deemed to be responsible for the relevant defect or is deemed to have met the contribution condition. In such circumstances, the landlord is unable to recover service charge in respect of relevant defects.
St John Street Property Services Limited v Riverside Group Limited
In the case of St John Street Property Services Limited v Riverside Group Limited one of the issues was whether the potential for a successful claim under the BSA for a remediation contribution order (RCO) should affect the payability of the service charge for remediation works.
Following detailed submissions, the FTT concluded that the prospect of an RCO being made was too remote from the proceedings for it to say that the amount of service charges payable were not reasonable or should be reduced in amount.
As we are sure readers appreciate, concluding any comment on the BSA at this point in time requires a necessary use of caution. The case law is minimal and the gaps within the legislation are both significant and concerning for practitioners. Much remains to be clarified. As we look to 2024, there will also be attention on the mechanics and processes for building safety case reports that will need to be completed for high-rise residential buildings, and on the actions of the Building Safety Regulator in calling in buildings for assessment for the issuing building assessment certificates.
The coming year will see the introduction of further guidance, more secondary legislation and, undoubtedly, the senior courts will opine on various contentious points, giving the industry much needed guidance.