On the safe side

The Fire Safety Act 2021 received royal assent on 29 April 2021. Section 1 of the act states that, where a building contains two or more sets of domestic premises, the Regulatory Reform (Fire Safety) Order 2005 (RRO) applies to the common parts, doors between common parts and domestic premises, a building’s structure and external walls. The reference to external walls includes any doors or windows in such walls and anything attached to them (such as balconies). Once section 1 comes into force (on a date to be determined by the secretary of state or Welsh minister (for England and Wales respectively)), the type of properties requiring a fire risk assessment and the nature and extent of those risk assessments will be significantly extended.

The act also introduces the concept of “risk-based guidance” (section 3) and, in doing so, a proportionate approach to complying with the RRO. The approach reflects the broader range of properties now subject to the RRO and recognises that what may be appropriate for a two-storey building containing two flats may not be sufficient for a high-rise residential building containing many more. Like section 1, it will come into effect on a date to be determined by the secretary of state or Welsh minister (for England and Wales respectively).

The related guidance, which has yet to be published but has undergone consultation, will be used to inform the discharge of duties under the RRO. Compliance with the guidance will indicate that the RRO has been complied with, while failure to comply “may be relied on as tending to establish that there has been a contravention of the relevant duties”. While the act suggests that evidence of compliance / non-compliance will be of ‘indicative’ merit only, it is anticipated that, in practice, the evidence will facilitate the enforcement of the statutory regime and support prosecution for non-compliance.

Considerations for property practitioners

While not all aspects of the act are in force, property practitioners should start to consider the following in all matters they are instructed on.

Extending the remit of the RRO

Since 29 June 2021, the secretary of state or Welsh minister can include or exclude building types from the remit of the RRO. Property practitioners should, therefore, keep abreast of any changes to the type of premises to which the RRO applies. This will enable them to ensure the correct diligence and drafting is applied and to demonstrate awareness and understanding – particularly to sophisticated clients who are likely to be aware of the well-publicised legislative changes.

Review of portfolios

Clients should be advised that they may have obligations under the RRO in relation to new types of property and that the act will place additional duties on responsible persons. Clients will not be able to demonstrate compliance to the fire authority without being fully aware of the extended remit of the RRO, which will include the statutory risk-based guidance (once published). Landlord clients should be encouraged to review buildings within their ownership and broader portfolio (if applicable) against their existing obligations under the RRO and the extended measures under the act.

Following this review, to ensure compliance, some clients will likely need to take remedial action such as installing compliant fire doors and frames. Notably, the act does not contain the amendments tabled during its passage through parliament that would have prevented freeholders from passing fire risk remediation costs on to tenants (however, it is the government’s intention to introduce other related measures such as the Gateway 2 Levy, residential developer tax and extension of the period in which claims can be brought under the Defective Premises Act 1972). Ancillary matters which might flow from remedial works will also need to be considered (for example, in the context of quiet enjoyment and nuisance).

Given that failure to comply with the act carries potentially criminal sanctions, practitioners may also need to consider, from a risk perspective, what reporting or other steps may be required when becoming aware of non-compliance. This may also be a consideration as part of a wider due diligence process.

Practitioners should be aware of the sensitivity around fire safety

Access for inspection

Fire risk assessors will need access to premises to conduct the checks required by the amended RRO. While this might be achieved easily in relation to common parts and building structure (which are ordinarily retained parts), any invasive checks for the purpose of assessing balconies and fire doors between domestic and non-domestic parts of the building might necessitate agreement with individual leaseholders or occupants where tenancies do not reserve entry rights for such purposes.

Sections 97 and 120 of the Building Safety Bill (if enacted unamended) will, respectively, provide a method by which an accountable person may request access to premises occupied or controlled by a resident or owner of a residential unit and impose a tenant covenant permitting access to the premises for a relevant building safety purpose.

Due diligence on purchase

This applies not just to the sale and purchase of a residential apartment in a high-rise tower but also to the sale and financing of blocks of student accommodation, retirement living, build-to-rent and other residential facilities, as well as smaller properties including two or more flats.

Enhanced diligence may now be required as a result of the renewed focus on fire safety. Practitioners will need to take a proportionate approach depending on the property and information available. Solicitors representing purchasers may consider raising additional enquiries where the relevant information is not available from the buyer’s inspection or searches of public registers (it is expected that there will be a register of fire assessments). It is possible that form CPSE1 will be updated to include standard form enquiries in this regard.

In the future, sellers might be required to provide information regarding past breaches, how non-compliance has been remedied and whether payment of any associated fines / penalties has been made in full. If requested, the information provided should be reviewed by their client and/or their technical advisers and compared with the requirements under the act and the RRO as appropriate.

If it becomes apparent that a fire risk assessment has not been updated, the buyer may require the provision of an up-to-date and satisfactory assessment as a precondition to exchange /completion. This is not likely to be an insurable position in the same way as an outstanding search might be, given the associated enforcement regime and reputational ramifications.

It is incumbent on practitioners to ensure that copies of fire risk assessments and fire safety information are provided to the client, and if appropriate their technical team or managing agents, as soon as such details are received. Practitioners should check that the information has been received and advise that it is reviewed by the appropriate individual within the client’s business or a member of their technical / advisory team.

On a related matter, enquiries might also be raised (as appropriate) in respect of EWS1 forms. Enquiries should be proportionate and appropriate bearing in mind the guidance issued by RICS in March 2021 and which became effective on 5 April, and the requirements of specific lenders.

Title review

Practitioners should report to clients on access and escape routes to and from the premises and any limitations of the same. Disability Discrimination Act requirements and personal emergency evacuation plan (PEEP) provision must also be considered. Where the client and/or their technical team queries whether compliance has been achieved, identifies ‘gaps’ in information or insufficiencies in rights, the practitioner should request additional documentation and report on its availability. The absence of sufficient rights, deficiencies in easements, or problems with the physical structure or escape routes carry with them not only compliance and safety issues but also a cost for upgrading or resolving any issues – so price points and hassle factors are worth flagging to a client.

Lenders, investors and financing

Practitioners should be aware of the greater sensitivity around fire safety – not only for purchasers but also lenders and investors who cannot, reputationally, be seen to be funding the purchase or redevelopment of non-compliant premises and who may not want to invest in or lend against such asset.

Certain confirmatory statements and disclosures are required to be made in preparing a certificate of title. Whether it be a residential conveyance of an apartment or a portfolio sale of multi-occupied residential buildings, the certificate will require various confirmations as to good title, encumbrances and statutory compliance. It is possible that such certificates might be updated in the future to refer specifically to fire and building safety.

Other fire safety issues

Amendments to the RRO

The government has committed to making further amendments to the RRO. Clause 134 of the Building Safety Bill 2021-22 amends the RRO to require the responsible person to appoint a competent person to undertake / review the fire risk assessment, and to include obligations on the responsible person to keep records of completed assessments and details of the assessor. While these requirements are not yet in force (and may not be for some time), future purchasers might expect these details to form part of a sales pack. The process by which a seller might evidence competence of the assessor is unclear, however, it will be for the seller to provide the necessary reassurance to the purchaser.

The government has also committed, in its response to last summer’s fire safety consultation, to require a responsible person to take reasonable steps to share relevant fire safety information with an incoming responsible person (for example, on a sale). In the meantime, practitioners should require the information to be provided, since lost information could hinder future sales or financing.

Consultation on PEEPs

The government is currently consulting on proposals to implement the Grenfell Tower Inquiry Phase 1 Report recommendations on PEEPs. It is anticipated that following the outcome of this, legislation will be forthcoming that will place further obligations on owners and managers of multi-occupied high-rise residential buildings. Practitioners will need to track the progress of this reform to ensure that they can advise their clients on the relevant legal requirements in due course.

Fire safety is firmly on the government’s agenda and further developments in this area are expected. Practitioners should familiarise themselves with the existing changes in the Financial Services Act 2021 and review their due diligence and reporting processes to ensure that the new obligations are taken into account.