Member Article

The Building Safety Act 2022 (BSA) received Royal Assent in April 2022. Its aim is to improve building safety across the built environment, with a focus on the residential sector.

The BSA is being implemented in stages and a number of areas within the living sector fall under its regulatory umbrella. The government recently confirmed its intention for purpose-built student accommodation to be subject to the new regulatory regime.

It is critical that the Living sector understands the BSA’s current and future requirements and is ready to manage its operational and financial implications.

Currently in force

The BSA amends the Defective Premises Act 1972 (DPA), meaning developers, contractors and design consultants are at a greater likelihood of claims for fire safety related problems.

The DPA imposes a duty to carry out work to a dwelling in a workmanlike or professional manner with proper materials so that the dwelling is ‘fit for habitation’. 

One key change in this area is an extension to the period in which a claimant can commence a claim under the DPA. A claimant now has 30 years, from the completion of work carried out before 28 June 2022, to bring a claim that a dwelling was not fit for habitation.

For works completed on or after 28 June 2022, the time period for a claim is now 15 years.

Works to an existing dwelling were not caught by the original DPA. The BSA amends this, so that if any work to an existing dwelling causes it to be unfit for habitation, a claim can be brought. 

Building Liability Orders have also been introduced, allowing a court to make a related company - a company in the same group of companies - liable if it is ‘just and equitable’. These can be made for claims under the DPA or where it relates to a building safety risk.

Under the BSA, interested persons can also apply for a Remediation Order requiring a building owner to remedy specified defects or for a Remediation Contribution Order to require a company to financially contribute to the cost of remediating relevant defects.

New powers contained in the BSA also came into force on 1 September 2022 - enabling the Secretary of State to introduce regulations to establish building industry schemes to secure the safety of people in or about buildings or improve the standards of buildings. 

Membership may be conditional upon remedying or making financial contributions towards remedying defects in buildings. The BSA provides for the introduction of further regulations that would prevent a developer obtaining a planning permission or getting building control approval. 

Evolving legislation

Future provisions may widen the application of the BSA, with many of the remaining provisions likely to be implemented between April 2023 - October 2023.

Secondary legislation is set to introduce a new dutyholder regime applying to all work covered by Building Regulations 2010. This will place duties on those who procure, plan, manage and undertake building work - ensuring it meets the building regulations.

This will be supported by a new ‘gateway’ regime, providing the basis for building safety risks to be considered at each stage of the design and construction of higher-risk buildings. 

The regime will apply to buildings which are at least 18 metres in height or have at least seven storeys, with the definition to be developed in regulations. The government has proposed that the regime would apply to buildings that meet the height requirement and contain at least two residential units, or are care homes or hospitals.

The Building Safety Regulator (BSR), part of the Health and Safety Executive, will become the building control authority for higher-risk buildings. 

Secondary legislation will provide the practical details of Gateway two, before construction begins, and Gateway three, the current completion and final certificate phase. Under current proposals, building work cannot commence until the BSR has given Gateway two approval. 

A building will not be able to be occupied until the BSR then also issues a completion certificate at Gateway three and the building is registered. 

The BSR could have an approval period of 12 weeks for each of Gateways two and three.  

These requirements and the new approval period have the potential to delay the commencement of a development and its occupation once completed. This poses a significant risk for certain living sector developments where delays have a major impact, including for purpose-built student accommodation and the wider build to rent market.
Contracts will need to be drafted to set out which party, the developer or contractor, takes the risk of the delay in getting the BSR approvals at Gateway two and three.

Managing change

The importance of improving building safety cannot be overstated. 

Developers must continue preparing for the impact of the changes under the BSA. That means dealing with the increased likelihood of claims being made for historic defects, but also planning for the introduction of a building safety levy applying to new residential buildings requiring building control approval in England. 

A recent government consultation proposes that the levy will be collected by local authorities as part of the building control process and calculated on a ‘per unit’ or a ‘per sq metre’ basis. It also proposed that different rates could be set based on local authority boundaries, reflecting land value and house prices, and whether a site is brownfield or greenfield. 

It is proposed that the levy will be payable by the ‘Client’ - likely the developer - and certain building types will be excluded including hospitals, care homes and developments under 10 units. 

It is crucial to consider the fees of the BSR during the Gateway process, alongside the costs of joining building industry schemes. Firms may also be subject to higher insurance premiums, as well as overhead costs to comply with the dutyholder and Gateway regimes.

These are all factors that the real estate industry must prepare for as part of the BSA.

Meeting current and future obligations is critical to developers so they can minimise risk, avoid unnecessary costs or legal implications, while keeping project timings on track.

The industry must, however, be provided with the secondary legislation and accompanying guidance. This certainty is key to firms being able to plan effectively, with a clear understanding of the Act’s detail and timetable for when provisions will come into force.

 

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