United Kingdom | Publication | May 2022
The Building Safety Act 2022 (BSA) is here. Along with the myriad of statutory instruments (SIs) and accompanying guidance, this new legislation will usher in the biggest swathe of regulatory changes to the UK built environment in almost 40 years (since the Building Act 1984 hit the statute books). Although the BSA was granted Royal Assent at the end of April 2022, the vast majority of its provisions will not come into force for 12-18 months, as secondary legislation is developed.
The Building Safety Bill (Bill) was the government’s main legislative response to the Grenfell tragedy. While the Grenfell Tower Inquiry continues, a draft of the Bill was published in 2020 and, following pre-legislative scrutiny by the DLUHC Committee, the final Bill was published in July 2021 and presented for debate before Parliament. The Bill hit headlines several times this year as a number of controversial amendments and new clauses were introduced across a range of issues.
The BSA will run alongside the Fire Safety Act (FSA) which received Royal Assent in 2021. Last year, the government voted down an amendment to the Fire Safety Bill, seeking to protect leaseholders and tenants from paying to fix cladding on high-rise flats. At the time, the government reiterated its support to protect leaseholders from remediation costs, arguing that the Fire Safety Bill was not the right vehicle to address the issue.
Along its journey from inception to Royal Assent, the new legislation has evolved considerably. Its original ambit centred on enhancing safety measures in the design and construction of new high-rise homes. Its final incarnation extends from the pre-construction procurement stage (the planning process) all the way through to the post-construction, occupation and property management phase. In this way, it focuses on the entire lifecycle of a building, covering a number of issues, including:
Given the historical background and title of the legislation, it would be easy to assume that the new framework solely concerns health and safety. It is crucial that all built environment stakeholders get to grips with the changes to be implemented, and understand which of the new features of the BSA are likely to act as drivers for future industry changes.
This is the first in a new series of briefings on the BSA. Given the wide range of topics the legislation covers, in future alerts our Built Environment team will consider the implications of the evolving regime from various perspectives that include Construction, Health and Safety, Planning, Real Estate, Property-related Disputes (cladding and defective work) and Tax.
The BSA is a challenging piece of legislation: in more than 250 pages, it covers a vast range of matters in great detail and is accompanied by meticulous background guidance. In April 2022, DLUHC updated the government’s published Building Safety Bill factsheets; there are 31 factsheets, each of which briefly summarises a particular issue covered by the framework. The most important issues are listed below under key features. The DLUHC guidance is also supplemented by factsheets, which were published by the Health and Safety Executive (HSE) in October 2021.
The BSA is the cornerstone of the new regime and forms part of a wider tapestry of regulation, which will eventually encompass a number of SIs as well as the accompanying official guidance. In October 2021, the government added to the published draft regulations and presently, the text of 8 SIs is available online: Building Safety Bill: draft regulations - GOV.UK (www.gov.uk). These include the 55-page draft Construction Product Regulations and draft SIs, that provide more detail in relation to the higher-risk buildings covered by the BSA, the new (separate) duties to be imposed on CDM duty-holders and the building control procedures which will apply to the construction of new, higher-risk buildings (including the ‘golden thread’ of key building information) explained below. The BSA provides that key regulations will be laid before Parliament and require its approval before they are passed.
The provisions of the BSA will become law in stages, most likely staggered over an 18-month period following Royal Assent. Of most importance are the changes to the Defective Premises Act and Section 38 Building Act limitation periods (explained below), which take effect two months after Royal Assent, namely 28 June 2022.
One of the most impactful changes which the BSA will effect concerns the time periods within which legal claims can be brought against developers and contractors. This will extend the periods under the Limitation Act 1980 to 15 years, in respect of claims for:
(i) dwellings unfit for habitation under section 1 of the Defective Premises Act 1972 (DPA); and
(ii)breaches of the Buildings Regulations under section 38 of the Building Act 1984
Additionally, the cause of action under the DPA is broadened to include refurbishment works, as well as new-builds.
More alarmingly for developers, contractors and consultants is the inclusion of retrospective claims. The BSA now affords those who can claim under the DPA the ability to introduce claims up to 30 years of after completion of the dwelling. This will unsettle contractors and designers relying on the comfort of a limitation defence in respect of historic projects, who may now find themselves battling claims long after the completion of their developments.
The BSA introduces a new cause of action that will enable claims to be brought against construction product manufacturers and suppliers where a product has been mis-sold; is found to be inherently defective; or there has been a breach of existing construction product regulations. If this contributes to, or causes a dwelling to become ‘unfit for habitation’ under this new cause of action, a civil claim may be brought through the courts. This is subject to a retrospective 30-year limitation period, applicable to cladding products only, and a 15-year prospective period that will apply to all construction products. These changes mirror the changes made to the DPA.
Section 38 affords a statutory right of action to anyone who suffers damage as a result of a breach of the Building Regulations. To date, Section 38 has never been brought into force. The intent is to bring this into force alongside the changes to the DPA thereby allowing claims for compensation to be brought for physical damage, or injury, caused by a breach of building regulations. Unlike the DPA and the new construction product cause of action, Section 38 is not limited to dwellings, applying to all breaches of the building regulations.
Under the BSA, the High Court may issue a so-called building liability order – in respect of liability that relates to a building and is incurred under the DPA or Section 38 of the Building Act, or as a result of a building safety risk. This provides that any relevant liability of a body corporate is also a liability of an associated body corporate. The Court can also order that any such liability is a joint and several liability of two or more corporate entities.
Part 2 of the BSA is about the creation of a new Building Safety Regulator (BSR) who will be responsible for overseeing and driving improvements in the safety and performance of all buildings, and for enforcing a more stringent regime for higher-risk buildings. The BSR will be housed within the HSE. The HSE will therefore take centre-stage in overseeing skills for inspectors and building control, and higher-risk buildings.
The BSA makes provision for a new Homes Ombudsman scheme, which will provide dispute resolution for, and determine complaints by buyers of new build homes against developers. Once the arrangements for the scheme have been made, developers will be required to become and remain members of the scheme.
Under a new Sl (a draft of which has already been published), CDM duty-holders will gain new responsibilities under a separate regime focused on raising standards, and designed to ensure compliance with Building Regulations requirements. The new regulations will apply to all work to which the Building Regulations apply.
The BSA creates a more stringent regime for higher-risk buildings, including residential buildings over 18m in height, or in excess of six storeys. One of the other SIs published in draft form provides further clarification on the definition.
All occupied higher-risk buildings will be required to have at least one clearly identifiable Accountable Person, who is responsible for ensuring that the fire and structural safety is properly managed for the whole building.
One of the key tenets of the legislation is the obligation of the duty-holders to create and maintain a ‘golden thread’ of building information throughout the lifecycle of the higher-risk building. All duty-holders will be required to keep up-to-date vital safety information about the building design, build and management. This duty will extend to the Accountable Persons. The government has confirmed that this ‘golden thread’ must be captured and maintained digitally for the entire lifecycle of the building.
Designed to bring safety to the heart of the construction procurement process and maintain this through the building’s lifecycle, the BSA introduces three ‘gateways’. These are mandatory hard-stops during;
(i) the planning stage;
(ii) prior to building works commencing; and
(iii) the completion/final certification stage.
The gateway regime applies to both the design and construction of new, higher-risk buildings, in addition to the major refurbishment of existing higher-risk buildings.
‘Gateway one’, also known as the planning gateway, came into force in August 2021 (see our briefing) and was introduced via an amendment to existing planning legislation as the Bill was still to be scrutinised by Parliament as part of the legislative process.
As the Bill passed through Parliament, the focus of the draft legislation turned to addressing how best to protect resident leaseholders. The BSA includes a number of new measures to shield leaseholders from costs related to the remediation of unsafe cladding. It also includes some rather draconian sanctions: companies may be compelled to remediate their building and the government will have power to block non-compliant companies from future building projects in England. You can read our recent update here.
The BSA is set to revolutionise the built environment, but not without cost. Putting the regulatory framework in place, establishing the BSR, the new Home Ombudsman Scheme and the new gateway process will require considerable financial resources. There is also the issue of the HSE now being at the heart of the building control system in England and the skills sets it requires.
The new framework is designed to change behaviours and improve competencies. With time, this will create lasting generational change. In the short term, the BSA will put additional pressure upon the real estate development market and construction industry as developers, contractors, consultants and product manufacturers and suppliers find their potential liabilities widen.
Publication
On 24 October 2024, the Court of Justice of the European Union (CJEU) confirmed that the European Commission’s (the EC) 2009 decision, which imposed a (then record) €1.06 billion fine on Intel, was flawed as far as it found that loyalty rebates granted by Intel had anti-competitive effects.
Publication
The Dutch tax classification system for non-Dutch entities will undergo significant changes as of 1 January 2025.
Publication
In King Crude Carriers SA & Ors v Ridgebury November LLC & Ors [2024] EWCA Civ 719 the Court of Appeal held that the claimant sellers (the Sellers) were entitled to claim the deposits promised under sale contracts as a debt despite the defendant buyers’ (the Buyers) breach of contract, which had resulted in the non-fulfilment of a condition precedent to the payment of the deposits.
Subscribe and stay up to date with the latest legal news, information and events . . .
© Norton Rose Fulbright LLP 2023