Thread by @nearlylegal

Working on Draft Building Safety Bill. The Regulator can ask the Minister to make regulations on a matter if it would potentially cause a ‘major incident’. Major Incident is defined as (a) a significant number of deaths, or
(b) serious injury to a significant number of people.

(S.17(6)). But there is no definition of ‘significant number' of deaths/injuries. Are we going to end up with arguments over how many deaths are a ’significant number’? Personally, I'd go with one, but there would appear to be room for argument.

What is a ‘higher-risk building’, you might ask, given that everything applies to higher-risk buildings? Well, it is a ‘building of a prescribed description’ (s.19(1)). So, no-one will know until the Secretary of State has made regulations. Uncertainty is so bracing.

Particularly in a situation that potentially affects 10s of thousands of people, and where whether a building might or might not be ‘higher-risk' will have a dramatic effect on whether one can sell or re-mortgage.

Still, ’building safety risk' is defined. It means “a risk to the safety of persons in or about a building arising from the occurrence as regards the building of any of the following—
(a) fire;
(b) structural failure;”
And, oh..
“(c) any other prescribed matter." (s.16(1))

Fascinated that ‘Local Authority' includes:

“(d) the Sub-Treasurer of the Inner Temple,
(e) the Under Treasurer of the Middle Temple” (s.35)

And, the Secretary of State may by regulation turn the following into buildings:
“(a) any other structure or erection of any kind (whether temporary or permanent);
(b) any vehicle, vessel or other movable object of any kind, in such circumstances as may be prescribed.” (s.35(3))

Ah, so a ‘higher-risk building' is only ‘occupied' if there is more than one dwelling with a resident (lawfully residing there). (s.60) Subject to any amends by the Secretary of State (s.60(5)). Meanwhile, the ‘Accountable person’ rules look a bit knotty…

An 'accountable person' for a higher-risk building is
(a) a person who holds a legal estate in possession in any part of the common parts (subject to subsection (2)), or
(b) a person who is under a relevant repairing obligation in relation to any part of the common parts.

But legal estate in common parts doesn't make you the accountable person if:
“each long lease of which the person is lessor provides that a particular person (who is not the lessor) is under a relevant repairing obligation in relation to all of the relevant common parts.”

So, if there is a tri-paritie lease with a management company, for example. But how does that work with, say, a mixed tenure building with some dwellings not on long leases?

And then 'relevant repairing obligation' means “a person is under a relevant repairing obligation in relation to anything if the person is required, under a lease or by virtue of an enactment, to repair or maintain that thing." (s.61(3)).

But how does that relate to a potential ‘building safety risk’? Such a risk may, or indeed may not, fall under a repairing/maintaining obligation - that was part of the point of the H(FFHH)A 2018. I'll read on in hope of illumination….

New obligation on 'accountable person' for an occupied higher-risk building to assess building safety, and to do so at 'regular intervals’. How often is that? Doesn't say, just ‘regular' (s.72(2))

New obligation on 'the accountable person' to take reasonable steps, including works, promptly to prevent a major incident or reduce the severity of the incident. This, I suspect is where the ‘significant number of deaths' will become an issue…

'Accountable person' must appoint a ‘building safety manager’. And, subject to regulations by the Secretary of State, take out adequate insurance against the ‘building safety risk’. (s.77) We'll come back to this….

What information about things must be given to residents and others? And when? Well that is all subject to regulations to be made by the Secretary of State... (s.80) So, we don't know. But the accountable person must have a 'residents' engagement strategy’.

The ‘residents' engagement strategy' aims at ‘promoting the participation of relevant persons in the making of building safety decisions. While the strategy must say what information will be provided and what will be consulted on, nothing is set about the extent of that (s.82(3))

Residents must ‘take reasonable care to avoid damaging any relevant safety item’. OK. And must provide information relevant to building safety risks. And must keep in repair and proper working order any relevant 'resident’s item’ (electrical or gas installation or appliance).

This is enforceable by accountable person going to the county court for an order. (s.86). And accountable person has a right to access dwellings to assess building safety risks, also enforceable by county court order (s.87).

Now, for the big one - recovery of safety related costs. S.88 adds a new s.17A to Landlord and Tenant Act 1985. Duty on 'landlord' to take all reasonable steps to apply for any relevant financial support for costs of prescribed building safety measures. Fine. But…

‘Implied covenant by tenant to pay within 28 days any building safety charges’. (and allow access for inspection on 48 hours written notice). Payment enforceable in county court. Building safety charges? In the new s.17G -

“the costs or estimated costs incurred or to be incurred by or on behalf of an accountable person for a higher-risk building in connection with the person carrying out prescribed building safety measures.” So, means costs of building safety manager, and of building safety works

But building safety charge demands can only be issued every three months, so that's *fine*, and payment can be withheld if required information not given, or reconciliation account for previoous accounting period (estimates v actual).

Costs to be apportioned amongst leaseholders by the same method as service charge (assuming specified in lease) or if not 'any method agreed in writing with the tenant for apportioning building safety costs). That last will go smoothly.

Under new 17J, Building safety charges must be reasonably incurrred and the works of a reasonable standard. It seems that this would be for the First Tier Tribunal (new s.17T)

Also, there will be consultation requirements (new s.17K) though maybe not where works are urgent or special measures. But we don't know what the consultation requirements are because, yes, the Secretary of State may make regulations.

Still, at least the accountable person can't pass on the costs of fines, penalties or enforcements against them, any negligence or breach of contract, or maybe other costs to be prescribed by the secretary of state by regulations…

But additional insurance costs could be passed on to leaseholders, as far as I can see.

So, we have an awful lot of things that are to be done by regulations (including the circumstances in which an existing and occupied building must be registered and how quickly, as well as what will actually constitute a ‘higher-risk building' at all).

Given the potential effect of being a ‘higher-risk building' on valuation, sale, and re-mortgaging of existing leases, and on insurance costs, it is, I think, a necessity for these conditions to be specified at the earliest possible point.

As while there is a lack of clarity, many buildings that may not end up ‘higher-risk’ will be blighted in the meantime, and this could affect 100s of thousands of properties. (And we do need to know what a ‘significant number of deaths’ is!)

But the most significant factor for leaseholders, including RTB and shared ownership (and indeed freeholders/management companies) is a whole new statutory regime applied on top of lease covenants on maintenance and repair.

While there may be - in some leases - doubt about whether leaseholders would be responsible for the costs of remedying build defects, it would now be a statutory obligation if they gave rise to building safety works requirement. These are extra obligations, on top of the leases.

What is truly notable is that there is no address to potential liability of builders and developers. The limitation for a criminal offence of breaching building regulations is extended to 10 years from 2 years. But there is nothing to extend civil liability.

The Section 1 Defective Premises Act 1972 duty remains all that there is, with its strict 6 year time limit. Why was there no addition of civil liability for breach of building regulations (already there in Building Act 1984, just never implemented)?

Why no extension of limitation period for s.1 DPA? If the large part of the financial obligation is to be dumped on leaseholders, at least improve their means of redress against the builders, developers or original freeholders.

(Also notable by its absence is any express address to building warranty insurance on new builds.)

(Done).