It has just been announced1 that the Building Safety Regulator will turn its attending to enforcing safety obligations in residential buildings above 18 metres or 7 storeys in Spring 2024.
The statutory protections were a long time coming and were increasingly deemed necessary post-Grenfell – not only for safety reasons but to enable leaseholders to be able to sell their home.
Not all long leaseholders, of course, are responsible for necessary remediation repairs and related costs: ‘qualifying leaseholders’ are protected from certain financial liabilities relating to, e.g. dangerous cladding under the BSA (and related regulations).
In a nutshell, a ‘qualifying leaseholder’ is not liable for any costs of remediating unsafe cladding systems on ‘relevant buildings’ in England. The legislation defines ‘relevant buildings’ (and how building height is to be determined) as a building at least 11m high or (if lower) with at least five storeys; and contains at least two dwellings.
The protections apply to certain historical defects which are closely defined in the regulations. So what is a ‘qualifying leaseholder’ and to what extent are they protected?
A leaseholder qualifies for this exemption if they have a qualifying lease. A qualifying lease is a long lease granted before 14 February 2022, of more than 21 years of a single dwelling in a ‘relevant building’.
To be exempt, the leaseholder must also be responsible for service charges. If the lease was granted on or after 14 February 2022, the property must be the leaseholder’s only/main home.
The statutory protection applies to ‘qualifying defects’. To qualify, the defect must meet 4 criteria:
- It puts people at risk from fire or structural collapse
- The defect arose from work done to the building, whether during actual construction or later works
- The defect was created within 30 years before the leaseholder protections came into force (i.e. between 28 June 1992 to 27 June 2022)
- The defect relates to initial construction, conversion from non-residential to residential building and/or other work done or commissioned by/on behalf of the building owner or a management company
The BSA has raised many concerns for conveyancing practitioners, not least because the building safety reforms are complex and ambiguous in parts. It is one of the most challenging issues conveyancers have had to grapple with for a long time.
Recently, the Law Society revealed some of the specific concerns conveyancing solicitors have raised, for instance in relation to:
- The obligations in Part 1 and Part 2 of the UK Finance Handbook and the expectation for conveyancers to take on additional risks
- Expectations for solicitors to explain complex requirements to clients (including lenders) which are beyond their expertise
- Possible implications for professional indemnity insurance (PII) availability and cost
- Inability to verify sellers’ claims that leases qualify for leasehold protection
However, the Society has confirmed that having met with UK Finance, the handbook's building safety provision was amended on 21 July so that it now only applies where the flat is in a 'relevant building'). The Society says it is pressing for further changes, including to Part 2 instructions.
Conveyancers will agree that this is a start, but with a long way to go.
If you would like to learn more on the Building Safety Act 2022, we will be covering this topic in our Residential Property online Autumn event and at our LAW2023 in-person events. See details for our Online event here and our In person events here.
1A joint statement dated 26 July 2023 from the Department for Levelling Up, Housing and Communities, the Building Safety Regulator, the Local Government Association and the National Fire Chiefs Council