The Building Safety Act 2022 (the Act) was granted Royal Assent on 28th April 2022 and will be implemented over the following two years from this date through the release of secondary legislation.
The Act creates three new bodies to provide effective oversight of the new regime: the Building Safety Regulator, the National Regulator of Construction Products and the New Homes Ombudsman. The aim of which is to ensure buildings are managed better and there is a defined framework for the home-building industry to deliver better, high-quality homes.
The Building Safety Act 2022 can be found here. https://www.legislation.gov.uk/ukpga/2022/30/contents/enacted
The leaseholder protections providing financial protections for leaseholders in the Act came into force on 28th June 2022. The supporting secondary legislation for this came in to force on 21st July 2022 and details what the leaseholder does and does not have to pay for with regards remediating fire safety defects. The leaseholder protections apply to relevant buildings and to qualifying leaseholders.
The Building Safety (Leaseholders Protections (Information etc.) (England) Regulations 2022 can be found here. https://www.legislation.gov.uk/uksi/2022/859/made
For a building to be classed as a relevant building it must meet all the following criteria:
A) It is at least 11 metres in height or has at least five storeys (whichever is reached first)
B) It contains at least two dwellings
C) It is not a leaseholder-owned building. These buildings are not relevant because there is no separate building owner to pass the costs to.
For more information on relevant buildings please click here. https://www.gov.uk/guidance/definition-of-relevant-building
A qualifying lease must meet all the following criteria:
A) It is a long lease (more than 21 years in length) of a single dwelling within a building of above 11 metres or at least five storeys
B) You are responsible for paying a service charge
C) The lease was granted before the 14 February 2022
D) On 14 February 2022:
- the dwelling was your only or main home, meaning it was the home where you spent most of your time, or
- you did not own more than 3 dwellings in the United Kingdom in total - please note, dwellings outside of England will not be covered by or count towards the leaseholder protections.
For more information on qualifying leaseholders please click here. https://www.gov.uk/guidance/qualifying-date-qualifying-lease-and-extent
If you are a qualifying leaseholder, you will be completely protected from all costs related to the remediation of unsafe cladding systems. If you are a non-qualifying leaseholder, you will be fully protected where your building owner is - or is related to - the developer that was responsible for the defects.
Cladding remediation is defined for the purposes of the Act if it meets both of the following conditions:
A) It forms the outer wall of the external wall system
B) It is unsafe.
These protections apply retrospectively – your building owner cannot demand payment of invoices simply because they were issued before the protections came into force, where the charges would now be prohibited.
For more information on cladding remediation please click here. https://www.gov.uk/guidance/cladding-remediation
Leaseholder contribution caps
If you are a qualifying leaseholder in a relevant building and your landlord or landlord group has a net worth of more than £2 million per relevant building, they have an obligation to pay for all costs associated with the remediation of non-cladding relevant defects and associated interim measures.
There are some circumstances, however, where a building owner can legally pass on a share of non-cladding remediation costs to qualifying leaseholders. However, these costs are capped and must be spread over 10 years.
The table below sets out the caps which can be charged for non-cladding remediation costs according to property value and location.
|Maximum amount which can be charged for non-cladding remediation to qualifying leaseholders over 10 years|
|Property Value||Greater London*||Rest of England|
|Less than £175,000||£0||£0|
|£175,000 - £324,999||£0||£10,000|
|£324,999 - £1 million||£15,000||£10,000|
|More than £1 million but less than £2 million||£50,000||£50,000|
|More than £2 million||£100,000||£100,000|
For more information on leaseholder contribution caps please click here. https://www.gov.uk/guidance/leaseholder-contribution-caps
For the purposes of the Act, for a defect to be classed as a relevant defect it must meet all of the following criteria:
A) It puts people’s safety at risk from the spread of fire, or structural collapse
B) It has arisen from work done to a building, including the use of inappropriate or defective products, during its construction, or any later works (such as refurbishment or remediation)
C) It has been created in the 30 years prior to the leaseholder protections coming into force (meaning the defect had to be created from 28 June 1992 to 27 June 2022), and
D) It relates to at least one of the following types of works:
- The initial construction of the building,
- The conversion of a non-residential building into a residential building, or
- Any other works undertaken or commissioned by or on behalf of the building owner or management company.
This definition of relevant defect covers work needed to put right and ease historical building safety issues, but not, for example, wear and tear or routine maintenance.