April 2022 Building Safety update

Building Safety Bill: Outcome of House of Lords stage

The BSB has now progressed through the final House of Lords stages (Report and Third Reading) - the last of which took place on Monday 4 April. Some of the significant non-Government-backed amendments were passed by the House of Lords, as we outline in more detail below. Depending on the Commons’ reaction to those changes, this may mean some more back-and-forth between the Houses before the bill becomes law.

A copy of the current amended version of the bill, including the new amendments agreed to by the House of Lords, can be found here.

Key changes made by HoL

As anticipated, the HoL accepted the majority of the Government’s proposed amendments that we outlined in our last update, including in relation to the removal of the concepts of building safety manager and building safety charges; the introduction of the new build warranty scheme; the new causes of action and remedies relating to construction products; the clarification of the Building Industry Scheme; and the extension of the ambit of Remediation Orders and Remediation Contribution Orders.

The most significant part of the debate related to the extent of the protections to be afforded to leaseholders (and, conversely, the extent to which landlords/certain developers etc will be required to perform and/or pay – at least in the first instance - the costs of remedial works to relevant properties). In this context the Lords passed three amendments which the Government had opposed, relating to:

1. Ensuring that leaseholders who had enfranchised were still covered by the protections;

2. reducing the “cap” amount that leaseholders would pay for any remedial works to zero; and

3. changing the definition of “relevant building” so it now simply reads “a self-contained building, or self-contained part of a building, in England that contains at least two dwellings” (“self-contained” etc is separately defined in the Bill) with the height restriction of 11m / 5 storeys + being deleted.

These changes may further impact upon the potential pool of existing properties where landlords may need to perform relevant remedial works (whether voluntarily, as the result of a recommendation in a fire risk assessment, or due to a Remediation Order issued by the Court) – and in relation to which the costs of such works may then be sought to be passed on to others (whether by one of the methods created by the BSB – such as Remediation Contribution Orders or Building Liability Orders - or by claims under s1 of the Defective Premises Act 1972, the new construction products causes of action, or otherwise). It of course remains to be seen whether these amendments will survive further review by the House of Commons.

A further concern of the House of Lords expressed during the debates was that, in a number of peers’ views, the Government’s “waterfall” process of responsibility for remedial works costs did not adequately deal with “orphaned” buildings (where no-one was identified with funds to pay etc). The Third Reading debate noted that the Government apparently recognised this issue and considered it may be possible to deal with it administratively.

More generally, it is also of course relevant that the House of Lords did not challenge many of the arguably controversial clauses in the bill, such as those relating to the 30-year retrospective extension of the Defective Premises Act, or those under which developers may be prohibited planning permission or building control approval. This means that – barring something unexpected in the final stages – it is now almost inevitable that such provisions will become law.

Next steps for the bill

The Building Safety Bill will now be returned to the House of Commons so they can consider the amendments made during the House of Lords’ stage. This has been scheduled to occur on 20 April 2022 when the Commons returns from parliamentary recess. If the Commons accepts the House of Lords’ amendments in full and make no other changes, then the bill will simply receive Royal Assent very shortly thereafter. Given the nature the amendments made by the House of Lords, however, it is likely that these will not be accepted and/or that further changes may be made, in which case the bill will be sent back to the House of Lords again for their review (who may then seek to amend it again). This “ping-pong” stage may have several iterations until both Houses can reach agreement on the bill’s final form, at which point it will then receive Royal Assent. At this stage, we have seen no further comment from the Government about when they expect the bill will become law, such that their recent indication of “summer 2022” would still seem to stand at the moment.

Other developments

• New Government “Factsheets”: the Government has published a number of further fact sheets regarding various elements of the bill: - the one on “redress” avenues – which summarises the various ways in which landlords and others can seek to recover costs of remedial works (whether historic or future) may be of particular interest.

• Fire Safety Act 2021 to commence in England shortly: during the Lords’ debate on the Third Reading of the BSB on Monday, the Minister of State for the DLUHC commented that the operative provisions of the Fire Safety Act 2021 – which was passed almost a year ago - would be brought into force in England on an unspecified date “next month” (it is already in force in Wales). As a reminder, this Act amends the Regulatory Reform (Fire Safety) Order 2005 to extend the fire risk assessment regime to cover assessment of the external walls of domestic premises comprising two or more units. The BSI has published voluntary guidance - PAS9980 – that is designed to assist fire risk assessors with this process. As we have previously reported on, this fire risk assessment regime is independent of the “Building Assessment Certificate” process proposed by the BSB for higher-risk residential buildings (ie those at or over 18m), and relates to qualifying properties of any height: while this change may mean a greater number of properties will now have to be inspected for external wall fire safety issues, it is hoped that the PAS 9980 guidance will ensure a proportionate and realistic approach to the task.

• Developer “pledge”: industry publications – Inside Housing and Building - have recently reported that a number of large housebuilders – including Taylor Wimpey, Berkeley, Persimmon and Gleesons - have signed up to a pledge with DLUHC, under which they would commit to fixing fire safety issues on relevant properties that they own that are over 11m, and would not claim any money from the Government’s Funds for that purpose. It is understood that the Government has asked a total of 53 companies to enter into the pledge.