Some things about the Building Safety Act 2022 you want to know but were too afraid to ask
By Olivia Davies, Cornerstone Barristers
The use of the word “want” in the above title may be stretching things. While the Building Safety Act 2022 does not make for light bedtime reading, it is important. To make the task of acquainting yourself with its many, many provisions slightly less painful, below is a summary of some of the things you really need to know.
A new prohibition/limitation on levying service charges where the landlord has remedied certain defects
- Sections 116 – 125 and schedule 8 of the Act introduce new provisions requiring landlords to undertake remediation for “relevant defects” in “relevant buildings”. These provisions also either prevent or limit the service charges that can be levied from leaseholders for these remediation works, depending on the circumstances.
- A “relevant building” is one 11 meters tall/5 storeys high. The definition of “relevant defect” is in s 120 of the Act. In essence it is a defect arising after 28 June 1992 from remediation works and which causes a “building safety risk”.
- In relation to some remediation works, such as cladding remediation, schedule 8 imposes an absolute prohibition on service charges being payable. For remediation works to which the absolute prohibition does not apply, there is a cap on the maximum that be recovered by way of service charges. For leases with a value of less than £1 million, the cap over a 5-year period is £15,000. The annual limit is 1/10 of that.
New duties for landlords in respect of occupied buildings that are 18 metres/7 storeys high
- Part 4 of the Act imposes new duties in relation to management of building safety risks in occupied higher risk buildings. A “higher risk” building is one that is at least 18 metres/7 storeys and contains at least 2 residential units.
- “Building safety risk” is defined in section 62 of the Act and relates to a risk to safety of people in/about the building from fire, structural failure or any other prescribed matter. No such matters have yet been prescribed.
- The duties fall on the “Accountable Person” (a person who holds a legal estate in possession in a common part or a person who is under a relevant repairing obligation in relation to a common part).
- You may be relieved to know that the duties are too numerous to mention here, but include:
- A continuing duty to assess building safety risks (section 83)
- A duty to take relevant steps to manage building safety risks (section 84)
- A duty to produce a residents’ engagement strategy to promote participation in making building safety decisions (section 91).
Can you recover the costs of compliance with these new duties?
- 9. Yes and no.
- 10. A new 30D in the Landlord and Tenant Act 1985 provides for recovery of certain of the costs of compliance with the Building Safety Act as if they were service charge costs.
- Each lease will have effect as if the matters for which a service charge is payable under the lease includes taking “building safety measures”. The relevant “building safety measures” are defined in s 30D. The list does not include all the new Part 4 functions. In particular, the cost of steps taken to manage building safety risks under section 84 of the Building Safety Act is not included.
- Other costs are expressly excluded from giving rise to a service charge by a new section 20F in the Landlord and Tenant Act 1985. These include any costs incurred by reason of negligence, breach of contract or unlawful act on the part of the Accountable Person or someone acting on their behalf.
- Finally, s 133 of the Building Safety Act 2022 imposes a new statutory obligation on landlords to seek alternative costs recovery for remediation works before passing the costs onto lessees. Landlords must take reasonable steps to obtain grant funding if available and ascertain whether money can be obtained from a third party or through a claim against a developer. If the landlord does not do so, lessees can apply for an order disallowing service charges relating to remediation costs.
The Building Safety Fund re-opened in July 2022. A separate fund for medium height buildings is slated to open soon. Landlords are advised to keep an eye out for further developments.