The Building Safety Act 2022 (BSA 2022) is an extensive piece of legislation. It includes the following provisions:
- Potential limitation of a flat owner’s liability towards building safety remediation costs.
- Requirements for the registration of all buildings more than 18 metres in height or more than seven storeys on a national register.
- Creation of a Building Safety Regulator with wide-ranging powers concerning building safety (not just fire safety).
The Act does not apply to buildings where some leaseholders have collectively enfranchised and own the building itself, referred to as owning a Share of the Freehold.
The BSA 2022 created the concept of a Leaseholder’s Deed of Certificate and a Landlord’s Certificate, which are part of the new regime which may limit a flat owner’s liability towards building safety costs. A certificate is applicable where the building is 11 metres in height or five storeys (and above), where there is a long lease (more than 21 years, you are responsible for paying the service charge and a declaration by the Leaseholder as to whether:
- The property was owned as a principal home on 14 February 2022;
- Whether the owner, as of 14 February 2022, owned more than three dwellings at that date.
When a Landlord receives the Leaseholder’s Certificate, it is to provide “the Landlord’s Certificate” within four weeks. This acknowledges receipt of the Leaseholder Deed of Certificate and is designed to provide information about possible safety remediation works and the prospect of the costs being passed on to flat owners.
If the Property was owned as a principal home, or if the owner did not hold more than three dwellings in the UK as of 14 February 2022, then the owner would be considered a qualifying Leaseholder. The owners and future owners of the Property may then benefit from the caps imposed by BSA 2022 on building safety costs which could otherwise be passed on to flat owners. Please follow the link below, which sets out the liability caps:
Costs that cannot be passed on to qualifying leaseholders under the BSA 2022 include:
- Any historical safety remediation costs where the developer who built or refurbished the building is or is associated with the building owner.
- Any historical safety remediation costs where the landlord has a net worth of more than £2 million per relevant building.
- Any historical safety remediation costs where the property is valued below £325,000 in Greater London or £175,000 elsewhere in England.
- Unsafe cladding remediation costs.
- Cost of legal or associated professional services relating to liability for relevant defects.
Costs that can still be passed on to flat owners up to a capped amount (see the link above for the levels of the cap) are as follows:
- ‘Waking watch’ costs (the overnight attendance of a person to warn against fire).
- Remediation of non-cladding shortcomings, for example:
- replacement of a fire door considered no longer safe
- installation of missing fire compartmentation
- inadequate structural fire protections
- inadequate structural design presenting an unacceptable risk of collapse (for example, balcony design which presents an unacceptable risk of vertical fire spread)
- professional services in relation to relevant works (for example, surveys to determine relevant works)
Even with this information and our interpretation of the act, it is crucial that sellers and buyers seek their own advice, whether that be from your solicitor or a surveyor.