The key objective of the Building Safety Act 2022 is to improve building safety across the built environment, with a particular focus on the residential sector.

The BSA received Royal Assent in April 2022 and will be implemented in stages. There have been a number of government consultations seeking views on the regulations that will provide the detail of many of the Act’s provisions, with the government also revealing its intention for other parts of the living sector, including student accommodation, to be subject to the new regulatory regime.

In force now

The BSA means developers, contractors and design consultants are at a greater likelihood of claims for fire safety related problems. 

The BSA does this by amending the Defective Premises Act 1972 (DPA). 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”.  

The BSA extends the period in which a claimant can commence a claim under the DPA. Previously, a claimant only had six years from the completion of the work to bring a claim that a dwelling was not fit for habitation. This period is now extended to a maximum of 30 years for work completed as of 28 June 2022. For works completed on or after 28 June 2022, the time period for bringing a claim is now 15 years.

The BSA also extends the scope of the work for which claims can be made under the DPA.

Previously, claims could only be made where the work related to the “provision” of a dwelling - the work was a new-build or conversion of an existing office building to create residential homes.

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. These changes expose developers and contractors to additional liabilities at a time where there are other challenges being faced by the sector – including rises in construction costs and interest rates.  

The Act also introduces Building Liability Orders, allowing a court to make a related company - a company in the same group of companies - liable if it is “just and equitable” to do so. These orders can be made for claims under the DPA or where the claim relates to a building safety risk. 

Historical fire safety defects

The Department for Levelling Up, Housing and Communities (DLUHC) has confirmed that as of August, 49 developers have signed a pledge committing to remediating fire safety issues in buildings over 11 metres that they played a role in developing or refurbishing over the last 30 years in England. 

These developers have also agreed to reimburse any funding received from the government remediation programmes in relation to these buildings. 

Under the BSA, interested persons can 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. 

In September 2022, the then Secretary of State for the DLUHC, Simon Clarke, stated: “Any housebuilders that fail to act responsibly may be blocked from commencing developments and from being granted building control sign-off for their buildings. This month we have taken steps to set up a scheme in law to show which housebuilders are doing the right thing, and which are failing to do so.”

These powers are contained in provisions in the BSA that came into force on 1 September 2022. They enable 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. 

Therefore, the BSA potentially gives the government powers to “encourage” housebuilders to act. It remains to be seen whether these regulations will be introduced, but the signs are that this is likely.

Future changes

The provisions in force now mainly focus on the remediation of fire safety defects, but future provisions may widen the application of the BSA. Although a firm timetable is yet to be confirmed, many of the remaining provisions will be implemented between April 2023 - October 2023. 

Secondary legislation will also introduce a new dutyholder regime applying to all work to which the Building Regulations 2010 apply. 

The regime will place duties on those who procure, plan, manage and undertake building work with the aim of ensuring the work undertaken meets the building regulations. Demonstrating that dutyholders are competent will be key. 

A recent government consultation suggests: “As a minimum, those carrying out work will be expected to meet the standards set by their sector, for example, relevant training and qualifications recognised by accredited institutions, membership of an established trade or professional body, or relevant experience of the type of work they will undertake.”

Gateways two and three 

The BSA provides for a new ‘gateway’ regime to ensure building safety risks are considered at each stage of the design and construction of higher-risk buildings. 

This will apply to buildings which are at least 18 metres in height or have at least seven storeys. This definition will be further developed in regulations, which were also the subject of a consultation.  

In this consultation, the government proposed that the new regime would apply to buildings that meet the height requirement and contain at least two residential units, or are care homes or hospitals. 

There had been some uncertainty about whether the purpose-built student accommodation sector would fall within the scope of the gateway regime, but the consultation states that a residential unit includes a dwelling or unit of living accommodation. It gives the example of rooms in a university hall of residence where amenities are shared. The Explanatory Notes regarding the occupation stage also confirm that ‘residential units’ will include student accommodation.

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

Secondary legislation is required to 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 will not be able to commence until the BSR has given Gateway two approval. 

A building cannot be occupied until the BSR has issued a completion certificate at Gateway three and the building is registered. The government has proposed that the BSR will have an approval period of 12 weeks for each of Gateways two and three.  

This has the potential to significantly delay the commencement of a development and its occupation once completed. 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.

Impact

Improving building safety across the built environment is critical. Developers must, however, recognise the significant financial and operational impact that the changes under the BSA could have.

As well as the cost of having to deal with the increased likelihood of claims being made for historic building defects, the BSA also allows the government in the future to introduce a building safety levy applying to new residential buildings that require building control approval in England. 

The government has recently published a consultation seeking views on the design and implementation of this levy. It is proposed that the levy will be collected by local authorities as part of the building control process and calculated on either a ‘per unit’ or a ‘per square metre’ basis. 

The consultation also proposes that different rates will be set based on local authority boundaries, reflecting land value and house prices, and whether a site is brownfield or greenfield. 

It also proposes that the levy will be payable by the ‘Client’ - usually the developer - and that certain building types will be excluded including hospitals, care homes and developments under 10 units. While rates are yet to be set out, the levy is expected to raise £3bn over 10 years.

There are other potential costs that the industry must prepare for, including the fees of the BSR during the Gateway process, fees that may be payable to join building industry schemes and potentially higher insurance premiums to reflect increased liability. Businesses may also be subject to increased overhead costs to ensure compliance with the new dutyholder and Gateway regimes.

Prioritising building safety

The real estate industry must prepare for the fundamental changes contained in the BSA. 

By continuing to take steps to meet current and future obligations, developers can minimise risk, avoid unnecessary costs or legal implications, while keeping project timings on track. 

The need for secondary legislation and guidance is clear, however. The ability to plan effectively hinges on understanding the detail and timetable for when further provisions will come into force.

This article was first published in EG.