Real Estate Bulletin - October 2022

First legal action to force remediation of defects

The Building Safety Act introduces new sanctions and enforcement routes to compel remediation of fire safety defects identified within buildings.

On 9 October DLHUC issued a Press Release announcing that it had written to the freeholder of a Stevenage tower block, identified over two years ago as having unsafe cladding, as the first step to taking legal action.

The freeholder was given 21 days to commit to remedying the fire safety defects, otherwise DLHUC had said that it would apply for a court order.

The Secretary of State has said that he will also consider applying for a Remediation Contribution Order against other entities associated with the freeholder, requiring them to contribute to the remediation costs.

Read more about Remediation Orders and Remediation Contribution Orders here.

The Economic Crime and Corporate Transparency Bill

As part of its ongoing legislative strategy to crack down on economic and financial crime, the Government has published its Economic Crime and Corporate Transparency Bill (the Bill).

This is a significant piece of legislation, running to 250 pages, including what the Government calls ‘historic’ reforms of Companies House, enhancements to regulators’ powers and industry information-sharing that will directly impact firms in the financial sector, anti-money laundering practices and enforcement against crypto involved in illicit activities.

The Bill follows the Economic Crime (Transparency and Enforcement) Act of March 2022, which introduced (among other things) the register of overseas entities, strict liability for breaches of financial sanctions and enhancements to the ‘Unexplained Wealth Order’ regime.

Given the importance of this wide-ranging bill, we have published a two-part series of articles covering the key proposals.

• You can read about the corporate aspects of the Bill here, in particular the reforms to Companies House.
• A separate article here dealing with the criminal aspects, including new investigative and enforcement powers for law enforcement and for regulators of the legal profession.

All provisions of the Bill are related, however, in that they share the common aim of tackling economic crime.

Building to net zero: costing carbon in construction

The Environmental Audit Committee (EAC) (a select committee) published a report in May of this year: ‘Building to net zero: costing carbon in construction’. Within that report, the EAC recommended that:

• the Government introduce a mandatory requirement, incorporated into building regulations and the planning system, for whole-life carbon assessments of buildings in excess of 1,000m2 of gross internal area or comprising more than 10 dwellings; and
• once such assessments are in place, ”the Government should develop carbon targets for buildings to align with the UK’s net zero goals”.

The EAC noted that ”a clear timeframe for introducing whole-life carbon assessments, and ratcheting targets, should be set by the Government by the end of 2022 at the latest, and they should be introduced not later than December 2023”.

On 30 September, the EAC published the Government’s response to this report together with a letter from the chairman of the EAC to the Secretary of State for Business, Energy and Industrial Strategy and the Secretary of State for Levelling Up, Housing and Communities. The Government’s response indicated an intention to consult in 2023 on the measurement and reduction of embodied carbon in the built environment. In his letter, the chairman of the EAC commented: ”Given the widespread support which the Committee identified across the sector for the use of whole-life carbon assessment to reduce embodied carbon, we imagine that this will be one of the measures on which views will be sought via the consultation and the associated stakeholder feedback”.

Referencing other points covered in the Government’s response, the chairman noted that the Committee ”was surprised to learn of the lack of data on the take-up and effect of the permitted development right (PDR) relating to demolition and residential rebuild in place since August 2020, and was concerned to note that the Government had no plans to evaluate the effect of the change in PDR on incentives to retrofit, rather than replace, existing properties”.

The letter also expressed the Committee’s view that the failure to accelerate the full introduction of the Future Homes Standard to 2023, which the EAC had recommended, represented a missed opportunity. However, the Government’s response did indicate that there will be a consultation on the full technical specification for the Future Homes Standard in 2023, which the Committee welcomed.

There have now been two changes of administration since the Government’s response was issued in July 2022, but the fact remains that any consultation on the measurement and reduction of embodied carbon in the built environment will be of significant interest to those in the real estate industry.

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