Building Safety Act 2022 – Unintended Consequence
The Government introduced legislation in order to try and tackle some of the fundamental building safety issues brought about by the Grenfell disaster in June 2017. Its aim was to ensure that those who developed defective buildings take responsibility for remedying them in order to make these buildings safe, particularly, those affected by cladding issues.
In essence, it provides an obligation on developers to remedy historical building safety defects in respect of residential buildings that are considered to be ‘high risk’, i.e. those that are at least 11 metres high or five storeys. This duty is extended even where they no longer own the building in question. Where the developer cannot be identified or has refused to pay towards its defective buildings, funding would be made available to pay for the remedial costs.
To the extent that the leaseholder holds a ‘qualifying lease’ in a ‘relevant building’, they are afforded protection from either having to contribute towards the remedial works (in case of cladding), or their contribution would be capped to a maximum of £15,000 for other remedial works (e.g. fire safety issues), which payments are to be spread over 10 years. If the remedial costs exceed the cap, developers would be required to meet the shortfall.
The main issue relates to the definition as to what constitutes a ‘qualifying lease’ for the purpose of the Act. The Act is precise and stipulates that the lease must have been granted before 14 February 2022. Where a new lease is extended under the provisions of the Leasehold Reform, Housing and Urban Development Act 1993, a new lease would be granted in substitution for the existing lease. As the new lease will not be granted before 14 February 2022, the protections afforded to the at owners by the Building Safety Act will not apply, notwithstanding the fact that some leaseholders would have owned their leases from the date of grant of the original lease.
The general consensus is that the Government did not intend to exclude statutory protection to those who extended their leases post 14 February 2022, particularly given the recent press coverage of the Government seeking the balance the scale in favour of the leaseholders in protecting their interests. Pressure is therefore being applied on the Government by industry groups to address this defect! Very much unlike the financial measures being made available within the context of building safety, this defect, by the Government’s own making, can be remedied by way of a simple amendment to the legislation.
In the meantime, those leaseholders who are either seeking to embark on statutory lease extensions or those with ongoing claims, should obtain specialist solicitor’s advice to ensure that they are not adversely affected.
Bishop & Sewell’s award-winning Landlord and Tenant team are industry experts on Leasehold Reform legislation, including enfranchisement, lease extensions and Right To Manage.
If you would like to discuss any of the points raised in this article, please do not hesitate to contact Laurent Vaughan directly on 0207 079 4193 or lvaughan@bishopandsewell.co.uk.