Yule Blog 2023 – 5th Day – Golden rules for notices

We are revisiting the Building Safety Act 2022 (BSA 2022) and building control-related matters in today’s festive countdown. The BSA 2022 has instigated many changes to the building control regime, including requiring several new notices to be given to the relevant building control authority as building works proceed. In this blog we summarise the key notices that must be issued to ensure compliance when carrying out building work which is subject to the building regulations.

Initial application

Building control applications will, of course, still need to be submitted where the applicant intends to construct a building or carry out works which are subject to the building regulations. If the works involve work to a higher-risk building (HRB) (ie one which is at least 18m/seven storeys in height, containing two or more residential units or a hospital or care home) a “gateway 2” application will need to be made to the Building Safety Regulator (BSR). For non-HRBs (where the BSR is not the building control authority), full plans can be submitted to the local authority, or an initial notice can be submitted by an Approved Inspector/Registered Building Control Approver (RBCA) (see yesterday’s blog).

Intention to start

The new regime requires two notices to be served on the relevant building control authority (ie the local authority or the BSR, as applicable) during the early phases of the project, (i) before starting work, and (ii) when the work has commenced.

A notice of intention to start work needs to be given at least two working days before non-HRB work starts. For HRB works, the notice period is longer at five working days. The Building Regulations 2010 do not define what constitutes “starting” work, however, other government guidance confirms that starting work will involve undertaking any element of the permanent notifiable work (as described in the building control application or the initial notice given by the Approved Inspector/RBCA).

Commencement

A notice then needs to be given to the relevant building control authority when work has commenced as defined in the regulations. This notice must be given no later than five working days after the date when the work is considered commenced (for both HRB and non-HRB work). The threshold for commencement is much more stringent than the requirements under the pre-October 2023 regime, and the definition differs depending on whether the works consist of construction of a complex building, construction of a non-complex building, the horizontal extension of a building, or other works. For example, where a new building meets the definition of “complex” (as set out in the Building Regulations 2010), work is deemed commenced when the foundations supporting the building and the structure of the lowest floor level of that building (but not the other buildings or structures to be supported by those foundations) are completed.

Once work has commenced and the commencement notice is served, the building control approval is preserved. Where work is not commenced within three years, the original approval will automatically lapse. If the building control authority does not agree that the work has commenced, it can issue a rejection notice.

Completion

Not more than five working days after the work has been completed, the person carrying out the building work must submit a notice to the building control authority which confirms that the works are complete. The client (ie the person for whom the work is carried out) must include a statement, signed by the client, confirming that to the best of the client’s knowledge the work complies with all applicable requirements of the building regulations. The principal contractor and the principal designer under Part 2A of the Building Regulations 2010 (see our blog on the new dutyholders), also have to provide a signed statement confirming that they fulfilled their duties under those regulations. This is in line with the government’s aim to increase accountability for building regulations compliance. For HRB work, these statements are included as part of the “gateway 3” completion certificate application made to the BSR once work is complete.

Sufficiently progressed

The above all assumes that the work is subject to the new regime and that the transitional provisions do not apply. However, it is worth noting a further notice that is relevant to HRB works that may be caught by the transitional provisions. HRB works may fall under the transitionary provisions where the plans were deposited with the local authority before 1 October 2023 (and not rejected), or an initial notice was submitted by an Approved Inspector and deemed accepted before 1 October 2023. If the works are “sufficiently progressed” by 6 April 2024, the works will not transfer to the BSR’s jurisdiction (for more detail, see our Spotlight on Building Safety Magazine).

A notice that work has sufficiently progressed should be given to the local authority in relation to HRB works even if the works sufficiently progressed well before the new regime came into effect on 1 October 2023. This was not initially clear from the transitional provisions in the regulations. However, in a recent government circular letter the government stated that “local authorities and approved inspectors (or registered building control approvers) should encourage dutyholders of relevant projects to send in this notice, even where the project they are overseeing has sufficiently progressed before 1 October 2023″.

Where HRB works reach the threshold to be sufficiently progressed during the six-month transition period between 1 October 2023 and 6 April 2024, a notice must be given to the local authority to confirm that the works have sufficiently progressed not more than five working days after the date the work was deemed sufficiently progressed (and the local authority must receive that notice by 6 April 2024). Where an Approved Inspector/RBCA is engaged, they should also receive a copy of the notice.

If works have not sufficiently progressed by 6 April 2024, the works will transfer to the BSR’s jurisdiction. Notices then need to be given to the BSR providing details of the works within the relevant timescales specified in the Building (Higher-Risk Buildings Procedures) Regulations 2023.

To conclude

To avoid non-compliance with the new regime, all of these notices should be diarised and sent accordingly.

The above highlights the key notices in the building control process – other notices may be required during the works and/or at completion, depending on the particular scenario. Notices must be given to the BSR where certain emergency works need to be carried out to a HRB. In addition, for HRB projects, further notices also need to be issued to the BSR where particular changes are proposed to the works and when specified dutyholders are replaced. Notices in relation to fire safety information and the technical performance of the completed building should also be given to the relevant building control authority for some works. Close attention therefore needs to be paid to all of the new regulations to ensure compliance.

Previous posts in our 2023 Yule Blog are here:

For further information please contact:

Nicholas Downing
Nicholas Downing
Partner, Construction, London
+44 20 7466 2741
Matthew Bool
Matthew Bool
Partner, Construction, London
+44 20 7466 3528
Becky Johnson
Becky Johnson
Professional Support Lawyer, Construction, London
+44 20 7466 3016

 

Yule Blog 2023 – 6th Day – Laying out the new regime for Approved Inspectors

This year has seen the introduction of many aspects of the new Building Safety Act 2022 (BSA 2022) regime. There are several six-month transition periods that feature in the new regime, but for this blog we are going to look at a key six-month period that applies to Approved Inspectors.

Those in the construction industry will be used to engaging with Approved Inspectors as an alternative to local authority building control, but that is about to change as Approved Inspectors will soon be replaced by Registered Building Control Approvers (RBCAs).

What is changing?

In October 2023, a six-month transition period began. By 6 April 2024, Approved Inspectors need to have registered as a RBCA to continue to operate and issue new building control initial notices. Those who attempt to continue working as an Approved Inspector beyond the deadline, will be committing a criminal offence (subject to certain run-off provisions).

Registration as a RBCA with the Building Safety Regulator (BSR) replaces the registration of an Approved Inspector under the Construction Industry Council Approved Inspectors Register (CICAIR). Registration will last for five years and the register will be publicly available.

There are currently over 80 Approved Inspectors operating in England and Wales. Those companies either need to register with the BSR as RBCAs, or withdraw from the market. There is therefore a lot for the BSR to do (alongside its other new duties). There are also thought to be over 4,500 individual building inspectors that will need to become “registered building inspectors” under the new regime. A six-month transition period also applies to their registration.

Why the change?

Under section 6 of the BSA 2022, the BSR has to provide such assistance and encouragement as it considers appropriate to persons in the built environment industry and registered building inspectors to facilitate and improve competence. One of the ways the BSR intends to do this is by taking over the register of RBCAs. Section 42 of the BSA 2022 updates the Building Act 1984 to introduce RBCAs, registered building inspectors and the register.

What do Approved Inspectors need to do?

Some Approved Inspectors have already indicated that they will be withdrawing from the market (eg, where people are planning to retire), and will not therefore register as a RBCA. For that scenario there are some run-off provisions that apply only to non-higher risk buildings to allow those projects to be completed. The run-off period is six months from 6 April to 30 September 2024 whereby existing initial notices will remain valid, but no new notices can be issued by the Approved Inspector after 6 April 2024.

For those companies that do wish to become RBCAs, they need to apply to the BSR who will assess the application and invite the Approved Inspector to an interview. The BSR will charge an hourly rate for the assessment. Full details can be found in government guidance: Register your business as a building control approver. The BSR will ask applicants to confirm that they will comply with the professional conduct rules and operational standards rules (these are currently labelled “draft”, but are not expected to change).

If a RBCA contravenes the operational standards rules, the BSR can serve notices of improvement and serious contravention. If the RBCA continues to contravene the rules, the BSR can cancel its registration. If a RBCA contravenes the professional conduct rules, the BSR can issue sanctions.

It is also possible for entities to register as RBCAs even if they are not currently Approved Inspectors, or where there is a corporate restructure which means that a new entity must be registered. Such entity would still need to apply to the BSR and meet the BSR’s requirements to successfully register and start work.

What about existing projects?

For higher-risk buildings (ie those over 18m/seven storeys tall that include at least two residential units) the BSR itself will be the building control body for those buildings that fall under the new regime. RBCAs will only be able to supervise higher-risk buildings that fall under the transitional provisions where the works have sufficiently progressed by 6 April 2024 (see our article on transitioning to the new building control regime in our Spotlight on Building Safety magazine).

If a higher-risk building has not met the threshold to be classed as sufficiently progressed by 6 April 2024, the project will transfer to the BSR’s jurisdiction, even where the initial notice was submitted before 1 October 2023. Therefore, on 6 April 2024, the appointment of the Approved Inspector/RBCA as the sole supervisor for building control will need to be concluded.

Deeming provisions mean that initial notices previously issued by an Approved Inspector for non-higher-risk buildings remain valid once an Approved Inspector successfully becomes a RBCA (provided that it is the same legal entity). Where the Approved Inspector has not registered as a RBCA their appointment will need to conclude at the end of the transitionary period.  RBCAs will be able to act in relation to new applications for non-higher risk buildings.

Practical points

The BSR has stressed that Approved Inspectors should make an application to become a RBCA as soon as possible. If an application is complex, there may not be enough time by April 2024 for the BSR to complete its assessment. An Approved Inspector will not want to find itself in a position whereby it cannot issue any new initial notices after April 2024 because there is a delay in assessing its application.

The transitional arrangements for existing initial notices only apply where the RBCA is the same legal entity as the Approved Inspector. Therefore, where an Approved Inspector is planning to restructure or merge with another company, that will need to be considered and this should be discussed with the BSR as soon as possible.

If you have engaged an Approved Inspector for an existing project, if you have not already done so, you should confirm with your Approved Inspector what its plans are for registration. The Approved Inspector should confirm that it is intending to make an application to become a RBCA as soon as possible, otherwise alternative arrangements will need to be put in place.

Previous posts in our 2023 Yule Blog are here:

For further information please contact:

Nicholas Downing
Nicholas Downing
Partner, Construction, London
+44 20 7466 2741
Matthew Bool
Matthew Bool
Partner, Construction, London
+44 20 7466 3528
Becky Johnson
Becky Johnson
Professional Support Lawyer, Construction, London
+44 20 7466 3016

 

Yule Blog 2023 – 8th Day – The property cases standing out from the herd

It’s been another busy year for the courts and tribunals in England and Wales. In this blog, we summarise the cases in eight key areas of focus. The milking maids themselves would even say these are the cream of the crop…

1. Building Safety Act 2022

The one that makes the history books

Waite & Others v Kedai Limited (2023, FTT(PC) LON/00AY/HYI/2022/0005 & 0016)

A group of 30 flat owners successfully obtained the very first remediation order under the Building Safety Act with little legal representation and without submitting their own expert evidence. On 9 August 2023, the First-tier Tribunal (FTT) granted the remediation order against Kedai Limited to remediate building safety defects in mixed-use buildings. The buildings were in Streatham and included former offices converted to flats with a commercial unit on the ground floor and a new seven storey block of flats. The tenants had concerns over the construction of their buildings since completion in 2015/16, and focus turned to building safety after the Grenfell Tower fire in 2017. The judgment provides useful guidance for parties considering/facing an application for remediation orders, of which we expect to see many more in 2024.

The one that confirms the retrospective nature of the Act

Adriatic Land 5 Limited v The Long Leaseholders at Hippersley Point [2023] UKUT 271 (LC)

In this case, the Upper Tribunal had to consider whether the service charge restrictions in Schedule 8 of the Act concerning costs of remediation works took effect from 28 June 2022 for all service charge costs, including those which had been incurred before the provisions came into force (assuming they remained unpaid). The Upper Tribunal endorsed the approach of the FTT in Waite v Kedai that the Act is a self-contained code and emphasised the importance of the overall purpose of the Act. Accordingly, the service charge costs were not recoverable under the Act. This benefits tenants who have not paid service charges demanded/payable before 28 June 2022 where they relate to remediation works to address fire/safety defects in buildings at least 11 meters high.

2. Planning (varying planning permissions)

In last year’s Yule Blog (8 Jolly Judgments) we considered the impact of Hillside Parks Ltd v Snowdonia National Park Authority [2022] UKSC 30, a significant Supreme Court decision on overlapping permissions which had profound consequences for the use of “drop-in” applications in multi-phase developments. This year saw two judgments on the related issue of varying planning permissions granted under section 73 of the 1990 Act – both High Court decisions but important nonetheless.

The one that provided clarity …

Armstrong v Secretary of State for Levelling Up, Housing and Communities [2023] EWHC 176 (Admin)

This case seemed to clarify the scope of section 73, confirming that section 73 applications were not limited to minor material amendments as the related Planning Practice Guidance might suggest and that, moreover, there is nothing in the statute which provides that section 73 applications cannot be used to approve substantial or fundamental changes to development – the development just needs to be consistent with the description of development in the original permission. In consequence, the government amended the relevant guidance.

… and the one that made it blurry

 R (on the application of Fiske) v Test Valley Borough Council [2023] EWHC 2221 (Admin)

However, this later decision introduced confusion. Here, the court considered that two tests should be applied – first, whether the section 73 application resulted in a conflict between the wording of the description of development and the conditions as amended (this is consistent with Armstrong), and, secondly, whether it brought about a fundamental change to the development as a whole (even if there is no inconsistency with the description of development – this conflicts with Armstrong). The Fiske decision is under appeal – so hopefully there will soon be some clarity on these conflicting decisions.

Where does this leave us? The new route for “material” variations to planning permissions introduced by the Levelling Up and Regeneration Act 2023 (on which we blogged here) may prove helpful – the new section 73B of the Town and Country Planning Act 1990 will enable developers to vary an original permission provided that the development as varied will not be substantially different from that of the original permission. However, section 73B is not yet in force (and we’re not sure when it will be) and it does not provide a complete solution to the problem. Lawyers and developer alike therefore keenly await the Court of Appeal’s decision in Fiske.

3. Injunctions (trespass)

The one that created newcomer injunctions

Wolverhampton City Council and others v London Gypsies and Travellers and others [2023] UKSC 47

The Supreme Court has created a new type of injunction which can bind persons unknown and unidentified at the point the injunction is granted, even if the prohibited action is not ongoing or threatened at the time the application is made. This case involved various local authorities who had secured such injunctions against the gypsy/traveller community to prevent trespass and unauthorised encampments. Newcomer injunctions can be made to protect civil rights or enforce public law where that aim is not adequately met by other remedies. They must include safeguards, such as presenting to the court any points which a newcomer might raise when making the application and an obligation to draw the application/order to the attention of those likely to be affected by it. They should also be strictly limited, geographically and temporarily. Whilst the case concerned travellers, the court accepted that newcomer injunctions may be relevant to prevent unlawful protestor action, although each case will turn on its own facts.

4. Landlord and Tenant

The one decided in favour of tenants

AHGR Ltd v Kane-Laverack and another [2023] EWCA Civ 428

This case serves as a reminder that leases must be carefully drafted and negotiated to avoid interpretational issues, especially with respect to user. The landlord owned a mixed-use building in Bermondsey, consisting of offices and residential flats, that also included one live/work unit. The lease of this unit permitted the tenant to use the premises as a “live/work” unit and the dispute concerned the proper interpretation of this user covenant. The Court of Appeal held that “live/work” meant “live and/or work” as the phrase was ambiguous and could mean “live and work”, “live or work” or “live and/or work”. The Court of Appeal also put weight on the plan in the planning permission showing the whole of the premises shaded as “live/work” which meant that there was no sub-division imposed into separate “live” or “work” areas.

…and the one decided in favour of landlords

Aviva Investors Ground Rent GP Ltd and another v Williams and others [2023] UKSC 6

This decision affirms leases which provide for the landlord to re-apportion residential service charge percentages. The dispute concerned the interpretation of service charge provisions in leases of residential units in a block in Southsea, Hampshire. The leases provided for the payment of service charge as either a fixed percentage or “such part as the Landlord may otherwise reasonably determine” and the landlords had been demanding service charges in different proportions from those stated in the leases for many years. The Supreme Court unanimously found that the landlords were entitled to vary service charge percentages and that the purpose of section 27A(6) of the Landlord and Tenant Act 1985, which gives the FTT jurisdiction to make decisions about service charges, is limited to the review of the contractual legitimacy of the landlord’s reapportionment.

5. Business lease renewals and the Landlord and Tenant Act 1954

The one that helps landlords who fail to serve a redevelopment counternotice

B&M Retail Ltd v HSBC Bank Pension Trust (UK) Ltd (2023)

This county court judgment awarded a redevelopment break clause to the landlord, HSBC, which could be triggered on the first day of the renewal lease of a unit on retail park in Willesden. HSBC missed the chance to serve a counternotice to B&M’s section 26 request for a new lease, relying on ground (f) of section 30(1) of the 1954 Act, even though it planned a redevelopment. The court accepted the landlord’s evidence that there was a real possibility of redevelopment and securing planning permission for it and ordered a rolling break in the renewal lease to be exercisable on 6 months’ notice.

The one on discretionary termination grounds

Gill v Lees News Ltd [2023] EWCA Civ 1178

This Court of Appeal decision clarifies that the court should look at the termination grounds under section 30 of the Act individually and cumulatively and consider the tenant’s conduct across the term. The landlord sought to rely on grounds (a), (b) and (c) – which are tenant default grounds relating to disrepair, persistent delay in paying rent and substantial breaches of the tenancy respectively. The court confirmed that ground (a) can be triggered by minor disrepair during the term, even if remedied by the date of the hearing, although the extent of the disrepair (and any steps taken to remediate it) will be considered by the court when deciding how to exercise its discretion to refuse a new tenancy. On the facts in this case, the landlord failed to convince the court that the relationship had broken down or that he could no longer trust the tenant so a new tenancy was granted.

6. Construction (limitation periods)

The rare one on the Defective Premises Act 1972

URS Corporation Ltd v BDW Trading Ltd [2023] EWCA Civ 772

The Court of Appeal offered some useful guidance in this case concerning the ability of claimants to rely upon the recently extended limitation period under section 1 of the Defective Premises Act 1972 (DPA).  Historically, cases regarding the DPA have been fairly thin on the ground, but following the implementation of section 135 of the Building Safety Act 2022, claims under section 1 of the DPA now have a 30 year retrospective limitation period for claims relating to new dwellings accruing before 28 June 2022.  The Court of Appeal confirmed that the developer claimant in this pre-existing action was entitled to amend its pleadings to make a claim against the defendant consultant under the newly-extended section 1 of the DPA, making a distinction between ongoing claims and those which had been settled, and which would not be able to take advantage of the extended limitation period.  For further detail, take a look at our Construction Notes blog on the case.

7. Construction (claims against consultants)

The one about causes of action

Lendlease Construction (Europe) Ltd v Aecom Ltd (Rev1) [2023] EWHC 2620 (TCC)

In this recent case, one of the issues the Technology and Construction Court (TCC) considered was when a contractual cause of action against a design consultant for a failure to review its design or to advise of any non-compliance would accrue. The court confirmed that each failure to review or advise would give rise to a separate cause of action, and each such cause of action would accrue when the failure occurs.

For a claim in negligence based on defects in a design, the cause of action accrues when the negligence first causes damage. This usually occurs when a drawing containing the relevant defective design is issued to the contractor for construction purposes and the contractor then builds in accordance with that drawing.

On the other hand, the cause of action for breach of contract in relation to defective design will accrue at the date of breach. This often occurs when the designer hands over its design to the contractor for construction, even if construction is not completed until substantially later. However, where a design consultant’s duties go beyond those of a “pure designer” (eg they include a contractual obligation to continue to review the design), the cause of action might accrue after the provision of its design or, at the latest, on practical completion. In this case there was no continuing duty to review the design after the construction phase began, and the claim was therefore time-barred.

8. Construction (contract terms)

The one about invoices and the Construction Act

Lidl Great Britain Ltd v Closed Circuit Cooling Ltd (t/a 3CL) [2023] EWHC 2243 (TCC)

The TCC held that a contract term which provided for a final date for payment other than by reference to a specified period between the due date and the final date for payment was not in accordance with the requirements for a compliant payment mechanism under s.110(1)(b) of the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996). In this case the final date for payment was stated to be 21 days after either (i) the contractual due date, or (ii) receipt by the employer of the contractor’s valid VAT invoice, whichever was later. The TCC confirmed that the only discretion permitted under s.110(1)(b) was for the parties to agree a set period of time (and not an event or mechanism) between the due date for payment and the final date for payment. Therefore, imposing a further condition between the due date and the final date for payment (in this case, the provision of a VAT invoice), was not compliant with the HGCRA 1996.

2023 Yule Blog

Links to the previous posts in our 2023 Yule Blog are below.

For further information please contact:

Matthew Bonye
Matthew Bonye
Partner and Head of Real Estate Dispute Resolution, London
+44 20 7466 2162
Shanna Davison
Shanna Davison
Professional Support Lawyer, Real Estate Dispute Resolution, London
+44 20 7466 7561
Becky Johnson
Becky Johnson
Professional Support Lawyer, Construction, London
+44 20 7466 3016
Fiona Sawyer
Fiona Sawyer
Professional Support Lawyer, Planning, London
+44 20 7466 2674
Kate Wilson
Kate Wilson
Professional Support Lawyer, Real Estate, London
+44 20 7466 2650
Gabrielle Coppack
Gabrielle Coppack
Professional Support Lawyer, Real Estate, London
+44 20 7466 3861

Spotlight on Building Safety: 360° perspectives on the Building Safety Act 2022

If you’re a regular follower of our blog, you will know that we have written about the numerous and varied impacts of the Building Safety Act 2022 on the real estate sector on a number of occasions.  Since the Act was passed in April 2022, a raft of further guidance and secondary legislation has been issued, and we’re also now starting to see the first cases on the Act coming through the courts.  With so much to digest, we’ve collated a number of articles from across our practice areas into a new publication “Spotlight on Building Safety: 360° perspectives on the Building Safety Act 2022” covering different aspects of this sizeable piece of legislation and the impact it is having on the construction and development markets. We have also included a client’s perspective on the process of remediating higher-risk buildings and dealing with the Building Safety Regulator.  To view the magazine in full, please click here.

For further information please contact:

William Turnbull
William Turnbull
Partner, Real Estate, London
+44 20 7466 2497
Nicholas Downing
Nicholas Downing
Partner, Construction, London
+44 20 7466 2741
David Bennett
David Bennett
Partner, Disputes, London
+44 20 7466 6435
Kate Wilson
Kate Wilson
Professional Support Lawyer, Real Estate, London
+44 20 7466 2650

Detail at last for Accountable Persons: Government guidance on The Higher-Risk Buildings (Management of Safety Risks etc) (England) Regulations 2023 released

In August, we published a blog discussing The Higher-Risk Buildings (Management of Safety Risks etc) (England) Regulations 2023 (the “Safety Risks Regulations”). It was clear that whilst the Safety Risks Regulations provided further clarity on the Building Safety Act 2022 (the “Act”), there was still appetite for further guidance on the key responsibilities for both Principal Accountable Persons (“PAPs”) and Accountable Persons (“APs”), such as assessing and managing safety risks, preparing a safety case report and a residents’ engagement strategy.

The further guidance repeatedly promised in the government’s consultation response was published on 19 September 2023 and in this blog we have identified some of the most helpful pointers for PAPs and APs on how best to fulfil their obligations:

Assessing safety risks and safety case reporting in high-rise residential buildings

Under S.85 of the Act there is an obligation for a PAP to carry out a safety case report. The Safety Risks Regulations specify information which a PAP must include in its report. This includes a description of the possible scenarios of building safety risks identified by each AP, the likelihood of those risks materialising and an assessment of the likely consequences if they do materialise. However, as discussed in our previous blog, this can only be a subjective assessment. The recently published guidance aims to assist APs with identifying potential building safety risks in order to carry out their reports to demonstrate that they understand the risks and manage them effectively.

The new guidance recommends that APs assemble a risk assessment team which should include people with knowledge and experience of safety management systems, fire safety and structural safety. The government has recommended that all potential risk scenarios are considered including: single-floor/multiple floor scenarios for fire safety; structural collapse of a residential unit and gas explosion in a structural risk scenario; and what could happen in different scenarios if measures to manage risks fail or an AP’s assumptions about structural stability are incorrect.

The overarching guidance is that ‘all reasonable steps’ should be taken to prevent and mitigate building safety risks. However, certain factors, such as steps that are disproportionately expensive, will come into what is deemed reasonable.

Although the Act does not require a PAP to carry out a specific risk assessment, the government has published an example of a HAZID method (hazard identification risk assessment) within the guidance. Further detail on this can be found here.

An AP must keep information for the safety case report in an easily accessible digital format. The report must contain details of: who prepared the report; building description; a risk assessments summary; a managing risks summary; a summary of the safety management system; details on planning for emergencies; and details on ongoing work and building improvement.

Safety management systems for high-rise residential buildings

S.84 of the Act requires APs to take steps to manage building safety risks in accordance with prescribed principles by setting up a safety management system. The Safety Risks Regulations provided further clarity on such ‘prescribed principles’ but fell short of providing sufficient certainty of the obligations for APs.

The government had previously stated ‘the principles are not absolute and should not be considered singularly or in isolation’ and that APs are best placed to determine their own levels of competence and capability and make informed decisions on where they may require external support.

The newly published guidance aims to provide clarity around these principles and support decision making for APs.

A safety management system (SMS) is a formal management system or framework for managing safety risks. The guidance sets out an example model of an SMS which is based on the ‘Plan, Do, Check, Act’ approach. The model covers: determining your policy and plan for implementation; assessing risks and implementing your plan; measuring performance; and reviewing performance and acting on lessons learned.

An SMS should be proportionate to the hazards of a building, considering its complexity, the complexity of the AP’s measures, and the extent to which contractors and third parties manage or maintain the measures in place.

The guidance also puts an emphasis on the continuous improvement of measures and systems in place which will require PAPs and APs to review and update their systems, policies, and procedures.

Preparing a residents engagement strategy

As discussed in the last blog, the government’s response to the 2022 consultation on the Act revealed significant concern about the lack of clarity around requirements for establishing and delivering the residents engagement strategy.

The new guidance addresses this, stating that from 1 October 2023, the strategy should be prepared by a PAP as soon as possible when the building is or becomes occupied. The strategy must cover: the information the PAP will provide residents with; the information the PAP will provide about building safety decisions to residents and owners of residential units; what the PAP will ask residents about; how the PAP will collect and use opinions; and how the PAP will measure and review participation.

After the strategy has been prepared, a PAP must distribute a copy to all APs. APs must then distribute a copy to all residents over the age of 16 and owners of units in the parts of the building they are responsible for. It is therefore important for APs to know who lives in the building and to understand their needs in terms of communication and accessibility.

There is also a requirement for a PAP to consult all residents over 16, all owners, and all APs the first time the strategy is issued and any time it is changed. The strategy must be reviewed every 2 years and after every consultation, mandatory occurrence report, and completion of significant material alterations to the building.

Managing safety risks in high-rise residential buildings

Each AP must keep a record of up to date information relating to both its preventative and protective measures it puts in place in relation to a higher risk building. The government’s new guidance says that this should include construction designs, an assessment of the current condition of the building and information relating to works and refurbishment.

The guidance helpfully includes specific preventative measures which can be put in place including compartmentation of buildings, fire doors, fire stopping, cavity barriers and measures relating to structural integrity such as preventing the ingress of substances which might adversely affect the structure over time.

Protective measures detailed within the guidance include the most common evacuation strategies, means of escape, fire detection, alarm and sprinkler systems, and structural protection measures.

The long-awaited guidance from the government is likely to be welcomed by PAPs and APs who have been looking for certainty of their obligations under the Act and were left wanting clarity following the publication of the somewhat ambiguous Safety Risks Regulations. The new guidance should act as a key resource for APs and PAPs now that the implementation date of the relevant sections of the Act on 1 October 2023 has come and gone.

For further information please contact:

William Turnbull
William Turnbull
Partner, Real Estate, London
+44 20 7466 2497
Tom Shattock
Tom Shattock
Associate, Real Estate, London
+44 20 7466 3784
Kate Wilson
Kate Wilson
Professional Support Lawyer, Real Estate, London
+44 20 7466 2650

Higher Risk Buildings and the Management of Safety Risks: Regulatory clarity or an ambiguous administrative burden for Accountable Persons?

In April, we published a blog discussing the key aspects of the registration regime for occupied higher-risk buildings (“HRBs”) under the Building Safety Act 2022 (the “Act”). Whilst those responsible for such buildings have been busy collating the information necessary to register their building with the Building Safety Regulator (the “Regulator”), it appears that the government have been busy fleshing out the ongoing building safety regime that will apply to HRBs.  On 17 August, the government laid before Parliament The Higher-Risk Buildings (Management of Safety Risks etc) (England) Regulations 2023 (the “Safety Risks Regulations”), whilst also releasing their response to the 2022 consultation on the building safety regime for occupied HRBs. The Safety Risk Regulations provide much needed further detail on the existing legislative framework which will apply to both Principal Accountable Persons (“PAPs”) and Accountable Persons (“APs”) once S.83 of the Act and these Regulations (simultaneously) come into force.  The government’s response to the consultation also provides further insight into the standards that are expected from those responsible for building safety.

The Safety Risk Regulations are heavy on detail, and will require a thorough review by those responsible for the safety of HRBs, but we have set out some of the key points in the new legislation below:

  • Building Assessment Certificates

S.79 of the Act places an obligation on the PAP to apply for a building assessment certificate (“BAC”) on the direction of the Regulator, which will be issued after the building has become occupied.  The BAC will evidence how the PAP (and any other APs) are managing any building safety risks and maintaining a safe building for their residents.  When submitting an application for a BAC, PAPs will need to demonstrate compliance with their duties under the Act, by confirming that each AP has complied with its own obligations under S89 of the Act, which relate to providing prescribed information to the Regulator, other APs, residents, and owners of residential units in a qualifying building. This will require a confirmatory statement that each AP has complied with its obligations.

The government has noted that a PAP will need to work with other APs to collect their details and decide which parts of an HRB they are responsible for managing. When applying for a BAC, APs must understand and accept their duties, with an aim of making it straightforward for the PAP to provide the required details for its application.

It is therefore crucially important that there is transparency of identity of each relevant party and that PAPs make efforts to investigate compliance to ensure that the statement can be made accurately and truthfully. The Safety Risk Regulations also provide further detail on the information that needs to be included in a PAP’s application for a BAC, and similarly, the information that the Regulator must include when issuing the BAC.

  • Management of Building Safety Risks

S.84 of the Act requires APs to take steps to manage building safety risks in accordance prescribed principles. The Safety Risk Regulations provide further clarity on such ‘prescribed principles’. However, whilst the regulations define ‘prescribed principles’, the principles themselves are not without ambiguity. The principles include ‘to adapt to technical process’ and ‘replace the dangerous with the non-dangerous or less dangerous’. This may leave detail to be desired by building owners who will be looking for certainty of their obligations and assurance that the measures they put in place are compliant with legislation.

In its response to the 2022 consultation, the government stated ‘the principles are not absolute and should not be considered singularly or in isolation’ and that APs are best placed to determine their own levels of competence and capability and make informed decisions on where they may require external support. However, clear guidance around these principles will support decision making and will be tailored to varying needs.

  • Safety Case Reports and Mandatory Occurrence Reporting Requirements

There is not a set template for the safety case report required under S.85 of the Act, but the Safety Risk Regulations specify the information which a PAP must include in its safety case report. This includes a description of the possible scenarios of building safety risks identified by each AP, the likelihood of those risks materialising and an assessment of the likely consequences if they do materialise. This can only be a subjective assessment, so it remains to be seen how compliance will be determined on a case by case basis.

The Safety Risk Regulations also aim to make clear the information which must be provided by an AP in relation to a safety occurrence. This will need to include the date and time of the safety occurrence, when it was notified to the Regulator, when the report to the Regulator was submitted, and a description of the measures taken to mitigate or remedy the safety occurrence.

Crucially, a ‘safety occurrence’ is defined as an incident or situation relating to the structural integrity of, or spread of fire in, a HRB that meets the ‘risk condition’ which is met if use of part of the building without the incident or situation being remedied would be likely to present a risk of a significant number of deaths, or serious injury to a significant number of people. Again, this can only be subjectively assessed, so APs should be cautious in ensuring that all potential safety occurrences are reported in accordance with the rules.

It is important to remember that where managing agents manage buildings on behalf of freeholders, head lessees and management companies, the responsibility for reporting safety occurrences still rests with the AP. It is important that APs undertake their own due diligence to monitor the activity of an agent in relation to reporting. APs should therefore not assume their duties can be ‘passed on’ in such circumstances.

  • Keeping ‘Golden Thread’ Documents and Provision of Information

APs will need to ensure that they keep information in accordance with the standards prescribed by the Safety Risk Regulations. This includes keeping it in electronic format and capable of being transferred electronically, ensuring it is intelligible to the intended readers and that the data is secured from unauthorised access. It will be necessary for APs to ensure that they have an organised and monitored record keeping system ready to easily provide information when required by the Act. Further guidance around the keeping of information is still expected.

Noting the financial impact on the new stringent regulations around data recording, the government response acknowledged that expenditure by APs associated with the ongoing costs of the new regime may be recovered from leaseholders through service charges.

  • Residents’ Engagement Strategy

Under the Act, a PAP must prepare a residents’ engagement strategy for promoting the participation of relevant persons in the making of building safety decisions. The Safety Risk Regulations set out requirements for reviewing the strategy and updating the Regulator in respect of changes. In particular, the rules include a requirement for the PAP to notify the Regulator of any ‘significant material alterations’ which include changes to the number of residential units in the building, changes to the width of staircases and escape routes and any changes to the internal layout of the building. PAPs will need to be alive to their obligations to notify the Regulator in respect of a wide range of changes by keeping on top of works in the building.

The 2022 consultation revealed significant concern about the lack of clarity around requirements for establishing and delivering the strategy. In the government’s response, it stated that the Regulator will produce guidance with further detail about delivering the requirements for establishing and operating a residents’ engagement strategy which will hopefully assist APs in navigating the new framework.

  • Complaints, Contravention and Compliance

A PAP is required under the Act to operate a system for:

    • the investigation of relevant complaints,
    • the service of contravention notices on residents and the owners of residential units, and
    • the service of compliance notices to an AP for a HRB who appears to the Regulator to have contravened, be contravening or be likely to contravene a relevant safety obligation.

The Safety Risk Regulations prescribe the extensive procedure which must be detailed in the complaints procedure by the PAP and the form and contents which must be included in each notice.

The Act establishes the framework for the PAP to be the first point of call for building safety complaints. Complaints can be escalated to the Regulator where the complainant is not satisfied with how their complaint is handled by the principal accountable person.

The response to the 2022 consultation noted that where a resident is contravening a duty, an AP should first take informal steps to rectify the issue before issuing notice. These measures will also assist an AP in deciding whether the ‘significant risk’ threshold has been reached, prior to issuing a notice.

Whilst the Safety Risk Regulations certainly provide further clarity on necessary and welcome safety legislation, it is clear that APs and PAPs of HRBs will need to ensure that they keep on top of a breadth of administrative obligations to guarantee their compliance with the safety regime.  The further guidance repeatedly promised in the government’s consultation response will also be a key resource for APs and PAPs and this will be eagerly awaited, but for now, there is plenty of work for APs and PAPs to be getting on with.

For further information please contact:

William Turnbull
William Turnbull
Partner, Real Estate, London
+44 20 7466 2497
Tom Shattock
Tom Shattock
Associate, Real Estate, London
+44 20 7466 3784
Kate Wilson
Kate Wilson
Professional Support Lawyer, Real Estate, London
+44 20 7466 2650
Becky Johnson
Becky Johnson
Professional Support Lawyer, Construction, London
+44 20 7466 3016

Time to act responsibly – DLUHC launches the Responsible Actors Scheme

As reported in our blog from the beginning of this month, when passing The Building Safety (Responsible Actors Scheme and Prohibitions) Regulations 2023 (the “Regulations“) the government was intending to push ahead with the launch of the Responsible Actors Scheme (the “Scheme“) this Summer.  The Department of Levelling Up, Housing and Communities (“DLUHC“) has now come good on that statement, with the launch of the Scheme taking effect from 24 July 2023.

Along with releasing updated guidance on the aims of the Scheme and its membership criteria, DLUHC has also now released an enrolment guide in which the process of enrolling into the Scheme, either through invitation from the Secretary of State or through voluntary application is explained.  According to the guide, DLUHC has begun issuing invitations to those developers that have already entered into a self-remediation contract with the government under which they have agreed to remediate unsafe buildings meeting the criteria for remediation.  This first wave of invitees will include those whose principal business is residential property development, and who meet the profits condition requiring them to have an average annual operating profit in excess of £10 million for the financial years 2017 to 2019 (provided they are not a registered provider of social housing).

Upon receipt of an invitation to join the Scheme, the developer will have 60 days in which to either join the Scheme, following the instructions contained in the invitation (the form of which has not been shared by DLUHC) or to make representations to the effect that it does not meet the eligibility criteria asserted by DLUHC in the invitation.  Having considered those representations, if DLUHC still considers it eligible for membership, the developer will have 30 days in which to join the Scheme or face the prospect of being subject to the planning and building control prohibitions set out in the Regulations.  If the developer does not join the Scheme, it will also find itself being listed on the Responsible Actors Scheme prohibitions list, which has also now been launched, although obviously with no-one yet being subject to the prohibitions.

If a developer considers that it meets the eligibility criteria for the Scheme, but it hasn’t received an invitation from the Secretary of State, it can put itself forward for membership by emailing DLUHC and making representations as to why it considers itself eligible, either as an entity whose principal business is residential property development, or on the basis that it has developed two or more buildings which are eligible for remediation funding due to life-critical fire safety defects.  Having considered the developer’s case for joining the Scheme, if DLUHC determines the developer to be eligible, it will then issue the developer with an invitation and joining instructions.

Finally, there is the option for a developer who developed or refurbished at least one residential building of 11+m during the 30 years prior to 4 April 2022 and that requires remediation to volunteer to join the Scheme, even if its principal business is not that of residential property development, or it doesn’t meet the profits test referred to above.  Again, a volunteer should contact DLUHC with the necessary supporting evidence to apply for membership.

The guidance recognises that there is a possibility that the developer may be part of a wider group of companies containing more than one entity which is eligible for membership.  In such cases, the invitation will provide further information on what to do, with DLUHC designating which group company is invited to join the Scheme.  This will be particularly relevant to groups within which one entity has already entered into a self-remediation contract with the government.

It is likely that those developers who find themselves on the receiving end of an invitation from DLUHC in the coming days and weeks will already be familiar with the obligations contained in the self-remediation contract, which will largely govern the operation of the Scheme.  However, it would be advisable for developers, invited to join the Scheme or otherwise, to acquaint themselves with this updated guidance from DLUHC, in order to have a full understanding of the obligations that will be placed on them as a result of their Scheme membership.

For further information, please contact:

William Turnbull
William Turnbull
Partner, Real Estate, London
+44 20 7466 2497
David Bennett
David Bennett
Partner, Disputes - Health and Safety, London
+44 20 7466 6435
Kate Wilson
Kate Wilson
Professional Support Lawyer, Real Estate, London
+44 20 7466 2650

Responsible Actors Scheme – Regulations now in force

The stream of secondary legislation issued pursuant to the Building Safety Act 2022 continues to flow at pace, with the government this week passing into statute the Building Safety (Responsible Actors Scheme and Prohibitions) Regulations 2023, which brings the implementation of the Responsible Actors Scheme one step closer.  As we summarised in our recent blog post and briefing note, the Scheme will require developers of at least one building exceeding 11m or five storeys and containing at least one residential dwelling to enter into a self-remediation contract with the government, if that building is found to be suffering from life-critical fire safety defects.

The Regulations that have been made are identical to those issued in draft in April of this year.  In the press release confirming the making of the Regulations (with effect from 4 July 2023) the Department for Levelling Up, Housing and Communities has reiterated its intention to launch the Scheme in the Summer of 2023, and as such, those developers likely to be eligible for membership do not yet have to take any action in terms of applying for membership.  However, it would be advisable for those entities which will fulfil the membership criteria to begin to familiarise themselves with the Regulations and (in particular for those developers which have not already signed a self-remediation contract with the government) the terms of that standard contract, which will be fundamental to the operation of the Scheme.

For further information, please refer to our detailed briefing on the Scheme or contact:

William Turnbull
William Turnbull
Partner, Real Estate, London
+44 20 7466 2497
David Bennett
David Bennett
Partner, Disputes - Health and Safety, London
+44 20 7466 6435
Kate Wilson
Kate Wilson
Professional Support Lawyer, Real Estate, London
+44 20 7466 2650

Occupied higher-risk buildings under the Building Safety regime – are you ready for registration?

In February, we published a blog discussing a few of the principal updates arising from the government consultation on the new building safety regime for occupied higher-risk buildings under the Building Safety Act 2022 (the Act). A further response has now been published to provide greater clarity on the registration process, together with an updated set of regulations which are set to come into force today (6 April 2023). We’ve set out some of the key updates arising from the response below and what they mean for registration under the regime.

Registration

Under the Building Safety (Registration of Higher-Risk Buildings and Review of Decisions) (England) Regulations 2023, all existing occupied higher risk buildings in England are to be registered with the national Building Safety Regulator (the ‘Regulator’).

What are the timings?

The register is due to open on 6 April 2023 and the deadline for registering existing occupied higher-risk buildings is 1 October 2023. Failure to register within this six-month window could lead to criminal prosecution.

Interestingly, although section 77 of the Act provides that it will be a criminal offence not to register the relevant building with the Regulator by 1 October 2023, this section is not yet in force and the regulations published so far do not refer to buildings needing to be registered by this date. That being said, the deadline for registration is stated clearly by the Regulator on their website and so we’re expecting that the government will issue further regulations in due course which will bring section 77 into force and trigger the registration window. In the meantime, we would recommend assuming that the register opens on 6 April with the deadline for registration being 1 October 2023.

Who needs to register?

The Act provides that the principal accountable person (“PAP”) will be responsible for registering the building with the Regulator under the regime, which is expected to be via an online portal. The government accepted in their latest response, however, that in practice a PAP is likely to benefit from the support of a third party (for example, by way of a managing agent) who may be better placed in terms of the knowledge and skills required to deal with the registration formalities. As a result, the regulations confirm that an agent may submit the application on the PAP’s behalf provided that they are authorised by that PAP to act on their behalf and the name and address of that person is provided on registration. That said, ultimately the responsibility for registration, and the accuracy of the information provided, remains with the PAP.

What information is required?

The PAP is required to submit key building information within 28 days of applying to register a building under the regime. The key building information required has been amended by the regulations as follows:-

  1. Where the PAP is not an individual, the nominated individual provides its name and ‘address’ rather than its name and ‘title’.
  2. Where the year of completion is not known, it will be possible to submit the age band on the Regulator’s online system.
  3. A statement from the applicant confirming that the information is true and accurate to the best of their belief will not be required, as this should be implicit and avoids the risk of a PAP seeking to delegate their statutory duties to an agent via registration.

If any of the information provided on registration subsequently changes, the PAP must notify the Regulator of these changes within 14 days of becoming aware of them.

For existing buildings, the PAP must confirm to the Regulator whether, to their knowledge, the building met the appropriate building standards applying at the time of completion. For buildings constructed under the new regime, the PAP will be required to provide the unique reference number when applying so that the Regular can establish that it has granted the relevant completion certificate prior to the building being occupied.

How much will it cost?

A registration fee of £251 will be payable upon registration.

Next steps

With the registration window looming, it’s crucial that all owners of higher risk buildings collate the key building information as soon as possible to allow sufficient time to register before the deadline.

For further information please contact:

William Turnbull
William Turnbull
Partner, Real Estate, London
+44 20 7466 2497
Rebecca Bridgen
Rebecca Bridgen
Associate, Real Estate, London
+44 20 7466 3376
Kate Wilson
Kate Wilson
Professional Support Lawyer, Real Estate, London
+44 20 7466 2650

The hidden costs of building safety: new duty imposes irrecoverable costs on landlords dealing with defects

As the Building Safety Act 2022 (the “Act“) continues to make waves across the real estate sector, one quiet, but very important, ripple should not be overlooked. Landlords of residential and mixed‑use buildings containing at least two dwellings and being above 11 metres high (or at least 5 storeys) with building safety defects will soon have to fund multiple steps to investigate alternative funding sources before passing any remediation costs to leaseholders under their service charge. The costs of taking these steps may be largely irrecoverable from tenants, leaving landlords with a substantial bill and no certainty that it will secure any funding source to carry out the necessary remediation works.

No leaseholder living in their own flat will have to pay a penny to fix unsafe cladding

…said the then Secretary of State for Levelling Up, Michael Gove, in January 2022. The Act delivers on that guarantee and also provides extensive protection to tenants under qualifying leases against remediation costs for non-cladding building safety defects in the form of caps and restrictions to service charge recovery.

However, for tenants of dwellings who do not hold a qualifying lease, that is not the end of story. Section 133 of the Act inserts a new section 20D into the Landlord and Tenant Act 1985 to require landlords to take reasonable steps to explore other cost recovery avenues before asking residential tenants to contribute via the service charge, whether they have a qualifying lease or not. The new duty will not apply to leaseholder-owned or managed buildings or commonhold land. Whilst it does not appear to apply to tenants of the commercial parts in mixed-use buildings, they are likely to benefit (indirectly) as the landlord has to comply with the duty for the residential tenants and (directly) as any costs recovered have to be applied to the service charge for the building as a whole. A tenant of a dwelling may challenge service charge demands in the First Tier Tribunal if such steps are not taken.

Many paths, multiple steps

Whilst the duty is not yet in force, the Government is consulting on the statutory guidance to sit behind it.

The new section 20D will require landlords to take reasonable steps to ascertain whether:

any grant is payable (for example under the Building Safety Fund); or

monies may be obtained:

under insurance

under a guarantee/ indemnity

from a developer or other person involved in the design or works to the building

If any of these routes are available, landlords should use the statutory guidance to clarify the steps they should take to obtain such funds.

For example, when pursuing a developer, the landlord should first seek independent legal advice on the likelihood of recovering remediation costs and whether there is a feasible claim, the likely costs of pursuing an action and the risks of doing so. Pre-action correspondence and negotiation should be attempted with a view to early settlement, but if the costs of litigation are likely to be disproportionate (or the landlord has received “strong legal advice” against litigating), they may reasonably decide not to pursue the claim. If litigation is pursued but unsuccessful, the landlord should consider grounds for appeal and pursue the appeal where reasonable to do so. It is clear that landlords should investigate and pursue the various routes of recovery simultaneously and they should not delay remediation works in the meantime.

Irrecoverable costs for landlords

The Government’s Impact Assessment dated 2 February 2023 says “Many leaseholders [are] faced with bills which they could not afford, for problems they did not cause, to pay for work over which they have limited influence. The Government has been clear that this was unfair.” The Act increases the recovery routes for alternative funding, but someone has to pick up the legal expenses of pursuing these avenues and landlords are in the frame to do so. The new duty does not discriminate between a landlord responsible for causing the building safety defect (or being part of the corporate group of the developer) and a landlord who acquires the building without any knowledge of the defect.

“Legal expenses” includes the cost of obtaining legal advice, pursuing litigation, arbitration or mediation. Schedule 8 of the Act prohibits landlords from passing legal expenses onto qualifying leaseholders living in their flats, whilst also protecting non-qualifying leaseholders (ie commercial tenants in mixed-use buildings) from inflated service charges due to shortfalls in recovery elsewhere. To give a flavour of the typical expenses, the Government’s Impact Assessment looked at 9 case studies. In one example, legal and administrative expenses to pursue a claim against a third party were over £125,000 with only 18% recoverable from leaseholders (46 qualifying/ 4 non-qualifying). The landlord had a legal bill exceeding £102,000 to comply with its new duty to take reasonable steps to secure alternative funding (without any guarantee of doing so). No information was given on the percentage of recovery of legal expenses from the third party.

Unless a landlord receives strong legal advice against litigating at an early stage, it may find itself weighing up the costs of pursuing alternative recovery routes against simply funding the works itself and accepting it may not be able to recover them via the service charge. Because even if a successful claim is brought against a third party, it does not guarantee 100% recovery of the remediation costs or the legal expenses. Whichever way you cut it, the landlord may well face a shortfall.

What is a qualifying lease?

Granted before 14 February 2022 (the “Qualifying Date”)

Granted for at least 21 years

Single dwelling in a relevant building

Tenant liability to pay a service charge

✔ On the Qualifying Date:

    • The tenant’s only or principal home;
    • The tenant did not own any other dwelling in the UK; or
    • The tenant owned no more than two dwellings in the UK apart from their interest under the lease

For further information:

Matthew Bonye
Matthew Bonye
Partner and Head of Real Estate Dispute Resolution, London
+44 20 7466 2162
Matthew Weal
Matthew Weal
Senior Associate, Real Estate Dispute Resolution, London
+44 20 7466 7535
Shanna Davison
Shanna Davison
Professional Support Lawyer, Real Estate Dispute Resolution, London
+44 20 7466 7561