New legislation on building cladding: what owners need to know

Over the past 18 months there has been fundamental change in the building control sector, prompted by the devastation caused by the Grenfell Tower disaster. Despite this significant change, some important legislative updates have gone under the radar, and many interested parties, such as landlords and tenants, may not be aware of their legal rights and obligations or where to access important information.

What The Building Safety Act 2022 (BSA) Control mandates

The Building Safety Act 2022 (BSA), expected to be fully operational by April 2024, will require owners of residential buildings that are above 18 metres tall, or at least seven floors, to register their properties with a Building Safety Regulator (BSR) by October 2024. It will be an offence to register late. In this context, ‘building owner’ means those with a superior lease of the building and therefore includes both landlords and freeholders.

With over 4,500 building control professionals in England and Wales, all will need to be assessed and certified by April 2024 to become registered building inspectors in accordance with the BSA. Those who fail to do so will not be able to work in Building Control in England. There will then be further evaluations against the Building Inspector Competence Framework (BICoF) every two to four years.

It is clear the impact of Grenfell has reached beyond just the issue of cladding and has extended to long-term improvement in building control as a whole, with building control set to become a heavily regulated sector.

Key changes in cladding requirements

Key changes that will affect leaseholders are found when looking at the developments that have been made in cladding. On 30 January 2023, The Department for Levelling Up, Housing & Communities issued a letter stating developers of residential buildings over 11 metres tall, which were developed or refurbished within the last 30 years, need to sign the remediation contract by 13 March 2023. As of 26 June 2023, 49 developers have signed the contract.

These developers are not only committing to being part of the Responsible Actors Scheme (RAS), as seen in sections 126-129 of the Building Safety Act 2022, but also to remediate or pay for the remediation of life-critical fire defects in their qualifying buildings, as well as reimbursing government schemes for taxpayer-funded work. If developers do not commit, they will not be a part of the RAS, consequently, they will not be able to act in the market as they normally would. They will be subject to prohibitions and the Secretary of State can block non-compliant developers from carrying out developments and receiving building control approval.

Who will pay for any works to ensure cladding is safe?

Qualifying leaseholders, who are those situated in a residential building over 11 metres or five storeys tall, and with the lease already being in existence as of 14 February 2022, will be protected from all costs arising from the remediation of unsafe cladding systems. This is a significant development from 2017 where it was initially believed that leaseholders would bear the cost of remediation work.

Councils and housing associations can access Government funding where remediation is required for buildings that are over 18 metres tall, with or without Aluminium Composite Material (ACM) cladding.

For leaseholders in private buildings, qualifying leaseholders will not be liable for the cost of remediating cladding defects, this will be covered by the Government or the developer. The government publishes monthly progress reports and in its most recent publication in June 2023 it was found that “96% (468) of all identified high-rise residential and publicly owned buildings had either completed or started remediation work to remove and replace unsafe ACM cladding.”

What are building owners obligations?

The obligations of building owners go beyond registering their properties to the aforementioned BSR, they will also be required to protect leaseholders from paying for all of the costs of remediating historic safety defects in the building. It is important to note this is not exclusive to cladding systems, but also other defects, such as unsafe fire doors, that may endanger tenants.

Even being associated with a developer, for instance through a partnership, who meet the previous criteria given by the DLUHC, could lead to a building owner being responsible for remediation of both cladding and non-cladding defects. There are key definitions to be aware of when considering if a building owner is bound by these obligations:

• If the building is a ‘relevant building’, one over 11 metres or five storeys tall, contains at least two dwellings and is not a leaseholder owned building; and
• If the defect is a ‘relevant defect’, one that puts people’s safety at risk through spread of fire or structural collapse and has arisen from work done to a building in the last 30 years.

Covering the costs of remediation will likely become an obligation for the building owner if these two conditions are met. These criterium remain the same and will apply whether the leaseholder has a qualifying or non-qualifying lease.

If the building owner does not meet the developer test, but meets the other requirements and the owner, or associated landlord group, has a net worth of at least £2million per relevant building, this is known as the contribution condition and the owner will still be obligated to pay for all costs of remediation for all relevant defects, both cladding and non-cladding. If the contribution condition is not met, a building owner can still be obligated to cover some costs relating to remediation of relevant defects. Even where buildings do not qualify as a relevant building, other remedies can still be granted. The government has provided guidance on cladding remediation, which can be accessed here.

Failure to perform obligations can result in receiving a remediation order or a remediation contribution order, which may give a specified time frame for the defect to be fixed. Failure to comply is enforceable by the county court.

Further useful links and information

• https://www.gov.uk/guidance/what-are-my-building-owners-legal-obligations
• https://www.gov.uk/guidance/definition-of-relevant-defect
• https://www.gov.uk/guidance/definition-of-relevant-building
• https://www.gov.uk/guidance/remediation-costs-what-leaseholders-do-and-do-not-have-to-pay
• https://www.gov.uk/check-building-safety-costs
• https://www.gov.uk/guidance/building-safety-leaseholder-protections-guidance-for-leaseholders
• https://commonslibrary.parliament.uk/the-external-wall-fire-review-process-ews/
• https://www.gov.uk/government/publications/responsible-actors-scheme/responsible-actors-scheme-plain-english-guide
• https://www.local.gov.uk/publications/supporting-residents-who-have-been-affected-cladding-and-other-building-safety-issues#remediation-works-and-associated-costs

The Hamlins Real Estate Disputes team has expertise in both commercial and residential matters. We seek to obtain the best outcome possible for every client, no matter how big or small the issue may be.

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