Building Safety Act

This article is intended to provide an overview of the proposed Building Safety Act (“the Act”) which was introduced in the House of Commons on 05 July 2021 and received royal assent on 28 April 2022.  The Act is a response to the Grenfell Tower fire which highlighted the shortcomings of the UK’s building safety regime.  Within the Act the Government have defined three “gateway” points at which the building owner must prove compliance with the Bill during the design and building of a new high-rise.  The first gateway point concerns the identification of fire safety issues during the planning process and the requirement for a fire statement.  Whilst gateways two and three, which concern compliance issues pre-build and pre-occupation will be introduced 12 to 18 months within royal assent being obtained, gateway one will be introduced via amendments to secondary planning legislation rather than the Building Safety Bill and will come into force on 01 August 2021.

The Act proposes to extend the limitation period for claims under s.1 of the Defective Premises Act 1972 (“DPA”) from 6 years from the cause of action to 15 years.  A notable point here is that this affects any claim where a dwelling meets the test under the DPA as being “unfit for habitation” due to defects.  The proposed change in the time limit will have both retrospective and prospective effect.

The Act will introduce a new regulatory regime to enhance the fire and structural safety of new and existing residential buildings.  It sets out to improve compliance by imposing tougher penalties on those who are non-compliant and mandates that developers belong to a “new homes ombudsman scheme”.  The Bill has been set out as follows:

(a)        Part 1 gives an overview of the Act;

(b)        Part 2 contains provisions about the building safety regulator and its function in relation to England;

(c)        Part 3 amends the Building Act 1984;

(d)        Part 4 deals with occupied higher-risk buildings in England and duties on Accountable Persons;

(e)        Part 5 contains provisions on remediation & redress, a new homes ombudsman scheme, powers about construction products, fire safety, regulation of architects and housing complaints; and

(f)        Part 6 general provisions.

KEY POINTS TO NOTE

Limitation Act 1980 and the Defective Premises Act 1972

One potential right of action for purchasers of homes which suffer from defects is to bring claims under s.1 of the DPA.  This requires a person taking on work in connection with a dwelling to undertake the work in a good and workmanlike or professional manner, with proper materials and to make the completed dwelling fit for habitation.  The time limit currently for bringing claims for breaches of the duty in s.1 of the DPA is 6 years from the time the dwelling was completed, or from the completion of any further work in respect of the defects.

This 6-year time limit has meant that many potential claimants have been time barred from making a claim under the DPA because the works in question were completed so long ago.  Another potential right of recovery exists with a claim in negligence, which has a potentially longer limitation period, but it is generally not possible for a homeowner to succeed with negligence claims against developers due to legal principles around the recovery of damages for property defects which are considered to be in the nature of “pure economic loss”.

The Act proposes to extend the limitation period for claims under s.1 of the DPA from 6 years from the cause of action to 15 years.  A notable point here is that this affects any claim where a dwelling meets the test under the DPA as being “unfit for habitation” due to defects.  It is likely that significant fire safety failings will render dwellings “unfit for habitation”, a key test of this concept concerns being able to occupy the dwelling for a reasonable period of time without significant risk to the health and safety of the occupant.

The proposed change in the time limit will have both retrospective and prospective effect, which means that it will affect all ongoing claims and resurrect those that have previously expired.

Claims that have previously been discounted by developers as being out of time could now be resurrected due to the retrospective effect of this new law.

This change in law may make such claims harder to defend because a number of developers may have lost key documentation in relation to these matters due to a passage of time as many company policies only retain documents for the same length of time that matches their potential liabilities.

For developers, the 15-year period may make it more difficult to seek contribution claims from other parties at fault, particularly anyone that they were in contract with (such as the contractor and architect).  The contract that the developer entered into with these parties may be by way of simple contract (6-year limitation period) or by deed (12-year limitation period). If the developer finds itself defending a claim that is 12-15 years from the cause of action under deed (or 6-15 years from the cause of action under a simple contract), it may not be able to pass those losses onto anyone else.  In an already inflated professional indemnity insurance market these changes may make it more expensive and harder for design professionals to obtain such insurance.

Building Safety Regulator

A new Building Safety Regulator (“BSR”) will be created, which will be the responsibility of the HSE.  The BSR will oversee a more stringent regime for higher-risk buildings and drive improvements in building safety in all buildings.

The BSR will have new responsibilities in relation to building control and Building Inspectors to ensure their competence with a view to creating a unified building control system across England.

The BSR function is going to be funded by a full cost recovery approach, enabling the Regulator to charge fees and recover charges from those it regulates for all its functions.

The Act breaks the life cycle of a building into three gateways with different duty holders and responsibilities at each gateway.

Building owners will be required to manage safety risks, with clear lines of responsibility for safety during design, construction, completion and occupation of higher-risk building.  The Act will also require a “golden thread” of information, with safety considered at every stage of a building’s lifetime – including during the earliest stage of the planning process.  Building owners will need to demonstrate that they have effective, proportionate measures in place to manage safety risks.  Those who do not meet their obligations may face criminal charges.

The ‘golden thread’ of information will be stored digitally and updated throughout a building’s lifecycle, including information such as material product details and inspection reports.  This will apply to both new and existing buildings.

Accountable Person

The Act creates a new role of the Accountable Person (“AP”).  Under the Act the AP is defined as the person who either has the legal estate in possession of, or is under a relevant repairing obligation, for any common parts of the building.  This may be an individual or corporate entity such as the building owner or a management company.

For clarity the Act defines a “Higher-risk building” in England that:

(g)        Is at least 18 metres in height or has at least 7 storeys; and

(h)        Is of a description specified in regulations made by the Secretary of State.

On occupation, each higher-risk building will have an AP who will be the duty holder.  They will have to produce and maintain a safety case report, which must be produced to the BSR.

The AP will have to appoint a Building Safety Manager to oversee building safety on a day-to-day basis.

Duty holders during the design and construction phase of the construction of higher-risk buildings will be identified in the same way as duty holders under the CDM Regulations.  Each duty holder will face specific duties to reflect their distinctive roles in ensuring building safety.  For higher-risk buildings, the Bill provides powers to prescribe documents to be included in the Building Control Application, including a signed declaration from the client that they have assessed and are content with the competence of the Principal Designer and the Principal Contractor.

The AP will have to apply to register a higher-risk building before it becomes occupied.  The BSR will be responsible for keeping a register of higher-risk buildings.

The AP will have to maintain a Residents Engagement Strategy.  This is likely to include how residents will access safety information and how they make complaints.

THREE GATEWAYS

Gateway 1

Gateway 1 is created at the planning stage and information will need to be submitted to the Local Planning Authority demonstrating that the fire safety requirements which impact upon planning have been considered at an early stage and incorporated into the proposal.  This will be known as “The Fire Statement”.

The BSR will become a new statutory consultee.

Gateway 2

This is the technical design and construction phase.  It bolsters the current building control deposit of plans stage before building work starts for higher-risk buildings, with the Building Safety Regulator (BSR) as the only option of building control body for in-scope buildings.  A building control application will be required, and this gateway provides a ‘hard stop’ where construction cannot begin until the BSR has approved the building control application.

Gateway 3

This is the current final certification/completion phase.

All prescribed documents must be handed over to the AP.

Duty holders are required to submit prescribed documents to the BSR.

MANDATORY OCCURRENCE REPORTING

Duty holders throughout the lifecycle of the building will have an obligation to report structural and fire safety occurrences, which could cause significant risk to life safety to the BSR.  This begins with the construction phase and continues with the AP.

CONSTRUCTION PRODUCT SAFETY

New powers will be prescribed to govern the safety of all products used in construction and governing the competence of architects.

ENFORCEMENT

Non-compliance with Building Regulations are currently dealt with by Sections 35 and 36 of the Building Act 1984.  The current time limit for enforcement action is one and two years, respectively.  This will be extended to 10 years in the case of breaches of both Section 35 and 36.

Powers to prosecute individual directors/officers etc. where the offence is committed by a corporate entity with their consent/connivance/neglect.

New powers by the BSR to issue Compliance Notices (for remedial work by a certain date) and Stop Notices (to cease work until defects remedied).  Non-compliance with Notices is a criminal offence and will carry a maximum sentence of 2 years imprisonment.

The BSR will have the power to replace the AP with a Special Measures Manager if there are serious failures which endanger life safety.

The BSR will hold building control bodies to account and will have the power to suspend or remove building inspectors from the register and prosecute them.

CONCLUSION

With the introduction of this Act comes the introduction of more stringent compliance and enforcement measures for the construction industry.  Stakeholders at all stages of the project lifecycle will need to carefully consider and manage safety risks in the design, construction and occupation of any high-risk buildings or face the imposition of tougher penalties for failing to do so.

Please contact Quigg Golden for any queries on the matter.