By Sarah Heatley, Senior Associate in the Property Litigation team at Forsters LLP
The Building Safety Bill (the Bill) was introduced to the Commons on 5 July 2021, four years after the Grenfell Tower disaster.
The government proposed this legislation as the biggest shakeup of building safety regulation since the Building Act 1984 and following closely on the heels of the Fire Safety Act 2021. It was widely expected to provide comprehensive detail about how the government intended to deliver its plan to end the cladding crisis affecting at least four million leaseholders nationwide.
So, does the Bill live up to expectations? We unpick some of the key proposals contained in the Bill and assess the legal implications for developers and builders.
Introduction of a Building Safety Regulator
At the heart of the new regulatory regime envisioned by the Bill lies this new body, which will sit within the Health and Safety Executive (HSE) and regulate all new buildings. It will have three main functions:
- Overseeing the safety and performance system for all buildings. This will include providing advice to the government about building regulation changes and identifying risks in built environment;
- Encouraging the improvement of competence in the built environment sector; and
- Leading the implementation of the new regulatory regime for higher-risk buildings. Such buildings are defined in England as being at least 18 metres high, or at least seven storeys, or containing at least two residential units.
The HSE has a proven track record of enforcing related legislation stringently, and so it is certainly a welcome decision to name it as the new regulator, provided that it gets sufficient resources to incorporate this new role into its remit.
Extension to Limitation Period of the Defective Premises Act 1972 (DPA)
A surprise addition to the Bill, provision has been included to more than double the limitation period for breaches of the duties contained in the DPA. This extends the time that proceedings could be brought against those responsible for any defective building, including designers, contractors and developers, from six to 15 years, and the change will apply retrospectively.
There are already murmurs of Human Rights Act challenges backed by industry bodies to this proposal if it becomes law which will relate to the sudden and hugely increased exposure to claims. However, other sources consider that the likelihood of occupiers having the appetite, or the pockets, for this type of litigation will be minimal.
The impact of this radical change to existing legislation on insurers is also unknown. One consideration is that existing professional indemnity policies generally only cover breaches of legislation in force at the time of the relevant works. In addition, and if the floodgates did open and lots of retrospective claims were made, this is likely to increase premiums.
Dutyholders and the Accountable Person
Hopefully, the implementation of ‘dutyholder’ roles, similar to those under the Construction (Design and Management) Regulations 2015, will mean that it is clear who has responsibility for fire and building safety throughout the life cycle of a higher-risk building.
In addition to their duties at the relevant stages of construction, upon completion the dutyholders will have to provide the accountable person with the ‘golden thread’ of building safety information for the particular building, setting out how the task has been managed from design to occupation.
The accountable person will need to be appointed once a building is occupied. It will be the person or entity who owns the common parts or who is under a relevant repairing obligation. In practice this is likely to be the freeholder, head leaseholder or management company or, where more than one of those exist, the freeholder is likely to be the principal accountable person.
As part of its role, the accountable person will have a duty to ensure that the building is registered with the regulator, to appoint a competent building safety manager and to obtain a Building Assurance Certificate which will confirm compliance with their various safety duties.
Three overarching gateways will form part of the new regime governing how higher-risk buildings are designed and constructed and how any major renovations are undertaken. They are as follows:
- Planning (from 1 August 2021) – Anyone submitting planning applications to construct a higher-risk building will need to show that they have considered fire safety issues, and dutyholders will need to provide fire safety information.
- Prior to construction (12 – 18 months from Royal Assent) – Approval must be sought from the new regulator before breaking ground, dutyholders must demonstrate to the regulator how the design and construction will comply with Building Regulations. Where works begin before this gateway has been passed, the regulator will have a range of enforcement options, including prosecuting the developer.
- Completion (12 – 18 months from Royal Assent) – Dutyholders must submit documentation to the regulator, including detailed as-built drawings and must also demonstrate compliance with Building Regulations and fire safety requirements. The regulator will undertake an assessment and, if satisfied that the building is fire safe, will issue a completion certificate.
The introduction of stop-go gateways, where evidence of compliance must be produced before a project can move into the next phase, should improve scrutiny of the proposed scheme. Whilst Gateway 2 will provide an important check of the safety of a building’s design before work is commenced, any poor workmanship that causes fire safety problems will only be picked up at the final gateway. In addition, works on site pursuant to letters of intent will not be able to start if flexibility is not incorporated into Gateway 2. Further, developments that fail to provide sufficient information in an appropriate format to the new regulator at any stage face delays to works commencing or to completion resulting in significant additional costs.
The government’s impact assessment, published alongside the Bill, estimates that to comply with the additional quality and safety protocols on higher-risk buildings developers would already need to spend an additional £80,000 per building on average.
Work in Progress
The Bill is to take until at least April 2022 to wend its way to Royal Assent. And if the furore surrounding the Fire Safety Act’s passage to Royal Assent is anything to go by, then its final form may be markedly different from the version introduced last week.
In whatever form it takes and given the inevitable disruption it causes to an industry only starting to emerge from a global pandemic, the Bill provides an opportunity to learn from past problems, to improve standards and the reputation of developers, and to effect change that will ensure that nothing like Grenfell ever happens again.