Grenfell tower fire, London. Credit: Adobe Stock

Shona Frame
Partner, CMS Cameron McKenna Nabarro Olswang
shona.frame@cms-cmno.com

The United Kingdom’s Building Safety Act 2022 is a very significant piece of legislation with wide-ranging implications for the construction industry both in terms of the regulatory framework for building safety going forward but also the increased liability landscape with long extensions to limitation periods, including bringing into play retrospective liability covering many years.

The origins of the Act stem from the Grenfell Tower fire in London on 14 June 2017. Following that, the UK government commissioned an independent review which was conducted by Dame Judith Hackitt.

Published in May 2018, the final version of the report, ‘Building a Safer Future: Independent Review of Building Regulations and Fire Safety’, built on the conclusion of the interim report that the current system of building regulations and fire safety is not fit for purpose and that a culture change is required to support the delivery of buildings that are safe, both now and in the future. The 2018 report set out a new regulatory framework designed to tackle the issues identified.

The UK government then published its ‘Building a Safer Future’ policy in December 2018, followed in July 2020 with the publication of a draft Building Safety Bill. The Bill was introduced to Parliament on
5 July 2021 and, following its passage through the various parliamentary stages, received royal assent on 28 April 2022.

It is described as being an Act ‘to make provision about the safety of people in or about buildings and the standard of buildings, to amend the Architects Act 1997, and to amend provision about complaints made to a housing ombudsman’.

The Act is in six Parts:

• Part 1 – Introduction and Overview.

• Part 2 – Provisions related to the new role of Building Safety Regulator.

• Part 3 – Amendments to the Building Act 1984.

• Part 4 – Provisions about occupied higher-risk buildings and duties on accountable persons.

• Part 5 – Provisions related to remediation and redress, introduction of a new homes ombudsman scheme, powers related to construction products, fire safety, regulation of architects and housing complaints.

• Part 6 – General provisions such as liability of company officers and the commencement provisions.

The Act applies mainly in England but there are also provisions that apply to Wales, Scotland and Northern Ireland.

Some parts of the Act have already come into force and others will come in later. A number of pieces of secondary legislation will also follow to flesh out and supplement various aspects of the Act.

Building Safety Regulator

The BSR is the Health and Safety Executive. The overriding role of the BSR is to secure the safety of people in or about buildings in relation to risks arising from buildings and improving the standard of buildings (section 3.1).

The BSR is to establish and maintain committees including the Building Advisory Committee (section 9.1); Industry Competence Committee (section 10.1); and residents of higher-risk buildings or others who promote residents’ interests (section 11.1). Higher-risk buildings for this purpose are defined as buildings in England that are at least 18m in height or with at least seven storeys and that contain at least two residential units.

Amendments to the Building Act 1984 (BA)

The BA is amended to include a definition of higher-risk buildings which, for the purposes of the BA, is a building in England of at least 18m in height or at least seven storeys and is as described in regulations made by the Secretary of State. There is provision for the definition of higher-risk buildings to be widened in future.

There is currently a consultation on the draft Higher Risk Buildings (Descriptions and Supplementary Provisions) Regulations in which it is proposed to define higher-risk buildings under section 120D of the Building Act 1984 as including buildings that contain at least two residential units (which would include, for example, a flat or rooms in a university hall of residence where amenities are shared), care homes and hospitals.

There are several other amendments to the BA, such as allowing for Building Regulations to be introduced to provide for documents to be provided with applications for building control approval; for inspection and testing of work, buildings and services provided to buildings; prohibiting covering up of work; and allowing work to be opened up or taken down (section 33).

The BA is also amended to allow issue of compliance notices where building regulations have been contravened and stop notices if work would contravene regulations (section 38). Criminal penalties are introduced for individuals and businesses contravening building regulations including imprisonment and fines (section 39).

There is a requirement for the building control authority to establish and maintain registers of building inspectors and building control approvers and to set out a Code of Conduct for those on the inspector register and professional conduct rules for approvers (section 42).

Construction gateways

Government guidance issued alongside the Act states that a new regulatory framework is to be introduced for higher-risk buildings including two new approval stages known as ‘Gateway 2’ and ‘Gateway 3’, with ‘Gateway 1’ being the current planning approval process. The purpose of this is said to be to provide rigorous inspection of building regulation requirements and ensure that building safety is considered at each stage of design and construction.

The final detail is awaited but a consultation paper has been released by the government. This paper sets out a detailed process for Gateways 2 and 3, as well as other approvals required during the course of construction.

Gateway 2 will apply prior to commencement of building work and requires the BSR to be satisfied that designs and construction proposals satisfy the requirements of the Building Regulations and the Act. Gateway 2 will be a stop/go point and building control approval must be obtained from the BSR before relevant building work starts. Early engagement with the BSR is encouraged prior to submitting an application in order to avoid this step causing delays. There is also some suggestion that a staged approach can be taken to the obtaining of building control approvals. Once an application is approved, the BSR will agree a bespoke inspection schedule with the applicant and the BSR will need to be notified at these stages for inspection to take place.

Variations instructed during the course of construction work may also need to be submitted for Gateway 2 approval if they amount to ‘major changes’, albeit with a faster turnaround time of six weeks instead of 12 weeks for an initial Gateway 2 application. However, this is something that could well bring with it the risk of delay to a project and that risk allocation will need to be considered when entering into building contracts.

Gateway 3 will apply when building work is complete and requires the BSR to be satisfied that the works as built comply with the Building Regulations and that the finished building is safe to occupy. Full as-built drawings must be submitted with the application. Gateway 3 will also be a stop/go point; that is, building control approval must be obtained from the BSR before registering and commencing occupation of a higher-risk building. The proposed period for the BSR to make a decision on an application is within 12 weeks of the application or such longer period to which the applicant agrees.

Once Gateway 3 has been passed, the BSR will issue a completion certificate. The Act makes it a criminal offence for a building to be occupied prior to this certificate being issued.

Again, this is something to be considered in contracts in terms of whether practical completion is to be dependent on the Gateway 3 approval having been granted and who will bear the risk of delays due to, for example, administrative delay by the BSR as opposed to refusal to approve due to quantity of work. In any event, the +12-week period to have the application determined, obtain the certificate and register the building will need to be taken into account upon completion of the build stage before the building can be occupied.

Higher-risk buildings

The Act also introduces new duties for ‘higher-risk buildings’ during the occupation phase of a building. Higher-risk buildings are those at least 18m in height or with at least seven storeys and that contain at least two residential units (section 65) but, again, there is provision for this to be extended if the regulator considers the building safety risk justifies it (section 69). Building safety risk is defined to include risk to safety due to spread of fire or structural failure (section 62).

The Act provides for there to be an accountable person and, if more than one, a principal accountable person (sections 72–73). The accountable person must carry out an initial assessment of building safety risks and then further assessments on a regular basis (section 83). They have duties to prevent a building safety risk materialising and to reduce the severity of any incident that does occur including by carrying out work to the building (section 84).

The principal accountable person must prepare a safety case report containing an assessment of risks and a description of further steps taken by the accountable person (section 85). There are further duties to provide details of the report and any other information related to building safety risk to the regulator (section 87) and to keep copies of relevant information concerning the building (section 88). There are also requirements to engage with residents to allow their involvement in building safety decisions (section 91) and to provide information to residents when requested (section 92). Where there is more than one accountable person, each has a duty of cooperation and coordination (section 109). Residents have a duty not to create a building safety risk or to interfere with safety items (section 95).

The regulator has enforcement powers and may issue compliance notices to the accountable person requiring contraventions to be remedied, with criminal sanctions for failure to do so (section 99). The regulator may also issue guidance (section 108).

All occupied ‘higher-risk buildings’ must be issued with a completion certificate before being occupied (section 76) and they must be registered with the BSR by October 2023 (section 77). It is a criminal offence if a building is occupied but not registered after this date.

It is anticipated that Regulations will require, among other things, the ongoing management of a digital ‘golden thread’ of information throughout the building lifecycle of higher-risk buildings.

Remediation of defects

There are provisions related to remediation of defects in ‘relevant buildings’, those being self-contained (or structurally detached) buildings or part-buildings that contain at least two dwellings and that are at least 11m high and with at least five storeys (section 117).

The Act makes provision in relation to service charges payable under leases. Some charges will not be payable by leaseholders such as costs relating to cladding remediation (section 122, Sch 8). This means that landlords will have to pay this cost unless they can recover from developers, contractors, manufacturers or from any government funding available.

It may be possible for landlords to recover the costs of remedying other non-cladding-related fire-safety defects from leaseholders, but this is subject to a statutory cap and will only be possible if the ‘landlord’s group’ does not meet the net-worth threshold (currently £2m for each building in scope). The group includes any person associated with that landlord which (in relation to a body corporate) may capture directors, companies with common directors, subsidiary companies and companies with a controlling interest (Sch 8).

Liability for defects and construction products

The Act changes the liability landscape significantly. Existing rights under the Defective Premises Act 1972 (DPA) have been expanded. The DPA at section 1.1 sets out duties to undertake work in connection with the provision of a dwelling in a workmanlike or professional manner with proper materials and so that the dwelling is fit for habitation when the work is completed. Those duties are owed to the person who ordered the work but also to any person who acquires an interest in the dwelling. That is now extended to cover work to any part of a ‘relevant building’ (a building consisting of one or more dwellings) (BSA, section 134 adding DPA, section 2A).

Importantly, the Limitation Act 1980 is revised to add a ‘special time limit’ for actions related to damage to, or defects in relation to, buildings. This extends the limitation period to 15 years from the date on which the right of action under the DPA accrued. In addition, that period is extended to 30 years where the right of action accrued before the BSA came into force. That is a very significant extension to the previous six-year period under the DPA.

Direct rights of action have also been introduced in relation to construction products (section 148). There is a four-stage test to establish liability:

• a failure to comply with a construction product requirement (in essence, regulations related to the products), where misleading statements are made or where a manufacturer makes a product that is inherently defective;

• the product is used on a relevant building (a dwelling or a building with two or more dwellings);

• the dwelling (or any dwelling in the building) is unfit for habitation; and

• one of the above factors was the cause or one of the causes for the building being unfit for habitation.

The party at fault has liability to pay damages to a person with a right or interest in the building for personal injury, damage to property or economic loss suffered.

There are similar provisions related specifically to liability for cladding products (section 149).

In addition, a statutory cause of action for breach of the Building Regulations will be brought into force.

In both England and Scotland, the BSA applies the same extended limitation periods as above of 15 years and 30 years (sections 150–151) in relation to construction product and cladding liability as well as for breach of the Building Regulations. The Act also allows liability under the DPA, for breach of the Building Regulations or for other building safety matters to be passed on to related companies by orders obtained from the High Court, referred to as ‘Building Liability Orders’ (sections 130–132). Clearly the aim of this is to prevent businesses with substantial liabilities from hiding assets in related companies to avoid liability.

Comment

The importance of the Building Safety Act 2022 and associated secondary legislation to developers, landlords, contractors, subcontractors, manufacturers and suppliers cannot be understated. Not all of the Act is in force yet, but there has been a very clear drive by the government to bring the Act onto the statute books and the direction of travel is clearly towards further tightening the position in relation to wider categories of buildings.