The Building Safety Act (the "Act"), granted Royal Assent on 28 April 2022, is lengthy (spanning six parts) and arguably the most significant piece of legislation to affect the UK's built environment industry in decades, yet many question if it actually goes far enough! This update aims to give a snapshot of what you need to know.
Where are we now?
Whilst the Act is now in force, only certain provisions have come into effect , notably in relation to changes to the Defective Premises Act 1972 (the "DPA"), a new construction products cause of action and certain statutory limitation periods (discussed further below). The remainder of the provisions are intended to become law following the introduction of secondary legislation over a period of 12 – 18 months post the Royal Assent. The Act, which aims to make buildings safer and deliver improvements across the entire built environment, also imposes a new, more rigorous regulatory regime for 'higher-risk' buildings (certain aspects of which are noted below). Higher-risk buildings are defined in Part 3 of the Act as buildings which are at least 18 metres in height or have at least seven storeys, and are of a description specified in regulations.
The Government has published a consultation on the proposed changes to building regulations to implement the new reforms under Part 3 of the Act. Views on policy proposals can be made up until 11:45pm on 12 October 2022. Similarly, views can also be given within this timeframe on the safety regime for occupied higher-risk buildings under part 4 of the Act (for example, in relation to residents’ voice and duties on residents). This is a unique opportunity for the construction industry to provide its feedback and help to shape building safety culture for future generations.
What are the key provisions of the Act?
Limitation periods: more time to bring claims
The 28th June 2022 saw perhaps the most significant change brought about by the Act come into force: longer periods of time to bring legal claims for defective work. Previously, such claims had to be brought within 6 years from practical completion, but claims arising out of s.1 of the Defective Premises Act 1972 (the "DPA") and accruing from 28 June 2022 onwards, can now be brought within a 15 year period. Similarly claims for physical damage under section 38 of the Building Act 1984 (the "BA 1984") can be brought within an extended period of 15 years provided that the works were completed post 28 June 2022.
It is worth highlighting here that the Act finally (almost 40 years later!) brings into force s.38 of the BA 1984 thereby allowing claims for compensation to be brought for injury or damage to property as a result of a breach of the Building Regulations.
This applies to all buildings within the scope of the Building Regulations (and not just dwellings or residential properties, which is the case for claims under the DPA and the new construction products cause of action, (discussed further below)).
The Act also deals with historic claims arising under s.1 of the DPA (i.e. claims which accrued before 28 June 2022), which was a key concern for many in the industry, allowing such causes of action to be brought for a period of up to 30 years post completion of a dwelling.
Also of note is the introduction of a new s.2A of the DPA, which extends the reach of claims in respect of dwellings which are unfit for habitation to those which arise as result of refurbishment and rectification works (i.e. in addition to claims relating to the original construction or conversion of a dwelling under s.1). Claims under s.2A can also be brought within the extended 15-year limitation period.
A new cause of action for construction products
Where a product has been mis-sold; is found to be inherently defective; or there has been a breach of existing construction product regulations, the Act provides for a new cause of action against the construction product manufacturer. A claim may be brought if the foregoing contribute to, or cause a dwelling to become ‘unfit for habitation’. The limitation period for such claims is 15 years, but extends to 30 years for retrospective claims relating to cladding products only.
This new cause of action also came into force on 28 June 2022.
Building Liability Orders
Pursuant to the Act, the High Court is now empowered to grant a 'building liability order' to extend the liability of a body corporate in respect of claims relating to a building and made under either the DPA, Section 38 of the BA 1984, or as a result of a building safety risk, to any of its 'associates' (e.g. parent company) to make them jointly and severally liable.
This provision also came into force on 28 June 2022, and, in theory at least, should provide a wider net to catch liable entities.
New Roles and Schemes: who's who and what's what!
The Act introduces a number of new bodies and roles each with a specific function but with the ultimate goal of achieving better (and much needed!) accountability in the industry. In addition, existing dutyholders will have certain new responsibilities.
New Building Safety Regulator
Pursuant to Part 2 of the Act, the Health and Safety Executive ("HSE") shall operate as the new Building Safety Regulator ("BSR"). The BSR will have three main functions: overseeing the safety and standards of all buildings; helping and encouraging the built environment industry and building control professionals to improve their competence; and leading implementation of the new regulatory framework for higher-risk buildings.
New Home Ombudsman
The BSA makes provision for a new Homes Ombudsman scheme, which will allow new-build homeowners to escalate complaints to a New Home Ombudsman. Secondary legislation yet to be introduced will require developers to become and remain members of the scheme and it will set out an enforcement framework and sanctions for breaching requirements. The Ombudsman will also have powers to issue a developers' code of practice setting out the standards of conduct and quality of work expected of members of the scheme.
Part 4 of the Act identifies new dutyholders known as 'Accountable Persons', and all occupied higher-risk buildings must have at least one clearly identifiable Accountable Person who is responsible for assessing and managing building safety risks and taking all reasonable steps to prevent / limit the impact of such risks materialising.
Existing Duty Holders but with new responsibilities
Existing dutyholders under the Construction (Design and Management) Regulations 2015 (the "CDM Regulations") will have new duties under a separate regime to help to ensure that building work (including design) complies with the Building Regulations. Dutyholders must be competent and the Part 3 consultation discusses how such competence can be established, demonstrated and maintained. On 27 July 2022, The British Standards Institute published three new standards, sponsored by the Department for Levelling Up, Housing & Communities, which set out competence requirements for building safety management including Principal Designers and Principal Contractors. Standards 1 and 2 provide frameworks for the competence of individual Principal Designers and Principal Contractors (including additional competencies for working on higher-risk buildings) and Standard 3 specifies competence requirements for managing safety in residential buildings and other developments incorporating residential accommodation.
Additional provisions will also apply for higher-risk buildings with an overall aim of improving standards and ensuring that those who commission building work, and those who have key roles in the design and construction process, are responsible for ensuring that the building is designed and built to be safe and compliant with building regulations.
A digital ‘Golden Thread’
Maintaining a 'golden thread' of vital information relating to and throughout the lifecycle of every 'higher risk' building is a key focus of the Act, and this obligation falls on both dutyholders and the Accountable Person. The obligation includes a requirement to maintain (in a digital format) up-to-date information about the building design, build and management and should be accessible to residents of the higher risk building. The Government is due to issue regulations to provide further clarification around the duties and responsibilities for maintaining the 'golden thread.'
Gateways to Building Safety
With an aim of ensuring that building safety remains at the forefront of minds at every stage of the higher risk building project, the Act prescribes three mandatory gateways: (i) the planning stage, (ii) before building work beings, and (iii) completion. Building safety risks must be considered at each gateway. The requirements under Gateway 1 have already come into force via amendment to existing planning legislation, but further regulations are awaited in respect of Gateways 2 and 3. The Part 3 consultation discusses the proposed regime and suggests that before building work can commence (Gateway 2) an application for building control approval will need to be submitted to the BSR (who must determine the application within 12 weeks). However, the Government does not want the new gateway regime to "slow down build plans", and industry feedback to the consultation may influence the current proposals. At completion of the works (Gateway 3), an application for a completion certificate must be made to the BSR. Occupation of a higher-risk building without a completion certificate (and the registration of the building) will be a criminal offence. The Government has also sought the industry's views as to when completion should be deemed to have taken place for the purposes of applying for a completion certificate – i.e. should it be "after all notifiable work is completed or when all work including snagging is completed." Food for thought…
Clearly, there is a lot of change and there will be much more to come! The Act is without doubt a step in the right direction but the devil is in the detail and it is of critical importance that the industry responds to the Government's consultations in order to help shape the secondary legislation to follow.
Real questions remain as to whether the Act goes for enough: for example: what about a retrospective golden thread for pre-existing buildings?; will there be funding to improve education on Building Regulations and provide regular training?; and what about guidance on insurance requirements in the industry in light of the changes being brought about by the Act? These are all questions which require further consideration and there are many more!
Similarly, the contentious issue of funding for remediation costs, particularly for historic defects, remains a hot topic. Whilst the Act does include some leaseholder protections for remediation costs (qualifying leaseholders in England can no longer be charged to remove unsafe cladding systems, and there are legal protections in place for non-cladding costs) some leaseholders will still have to pay certain capped costs for historic non-cladding historic building safety defects. Details of the new Building Safety Levy to address the cost of remediating historical building safety defects are still awaited, as is secondary legislation dealing with requirements for new home warranty cover for buyers. As at 9 August 2022, 49 developers have signed a pledge committing to remediate life critical fire safety works in buildings over 11 metres that they have played a role in developing or refurbishing over the last 30 years in England.
As you can see, the pieces of the puzzle are moving but once the consultations close on 12 October 2022, further detail and regulations should swiftly follow.
Watch this space!
DWF's Building Safety Regime report explores the far-reaching impact of the Building Safety Bill and reveals the challenges and opportunities for the construction industry.