Shoosmiths LLP
  June 28, 2022 - Milton Keynes, England

How developers can prepare now for the Building Safety Act: Part 1 of 3
  by Shoosmiths LLP

Welcome to the first part in our series of articles on the Building Safety Act 2022.

The Building Safety Act received Royal Assent on 28 April 2022. While many of the provisions will be implemented over the next 12-18 months, the industry is being urged to get ready now.

Dame Judith Hackitt stated in a recent HSE Bulletin: “The clock is now ticking and the pace is accelerating. Change is going to happen this time – there’s no denying it anymore!”.

However, preparing for the changes is challenging. Much of the detail of the Act’s provisions will be contained in secondary legislation which is yet to be finalised. With aspects of the new regime unclear, this series of articles looks at what steps developers can take now.

1. Extended limitation periods: prepare for greater exposure to claims

Applies to dwellings/all buildings

 

What’s changing? 

The Act includes new provisions to significantly extend the limitation period for breach of the duties contained in the Defective Premises Act 1972 (DPA) and these came into effect on 28 June 2022. S.1 of the DPA applies to the carrying out of work in connection with the provision of a dwelling and imposes a duty:

The Act also extends the causes of action under the DPA to include work to an existing dwelling, by inserting a new section 2A into the DPA, which has a similar effect to s.1 above.

Claims under s.1 and s.2A of the DPA will be subject to a 15-year limitation period applying prospectively for work completed on or after 28 June 2022. Liability under s.1 of the DPA will also have a 30-year retrospective limitation period in relation to work completed before 28 June 2022.

Liability under s.38 of the Building Act 1984 will also be subject to the 15-year limitation period, applying prospectively, when this provision is in force. S.38 allows a claim for compensation for physical damage caused by a breach to the building regulations. It is important to appreciate that the DPA applies to all dwellings, not just flats in high-rise buildings, whilst the Building Act 1984 applies to all buildings in England and Wales, therefore, the scope of application is wider than just dwellings.

Action points: 

2. Pay up or face the consequences

What’s changing? 

The DLUHC has previously announced that over 45 developers have signed a pledge committing to remediate “life critical fire safety works” in buildings over 11m that the developers were involved in developing and refurbishing in the last 30 years in England. These developers have also agreed to reimburse any funding received from the government remediation programmes in relation to these buildings. For those developers yet to sign up to the pledge, the DLUHC has said it “will continue to pursue those who played a role in developing unsafe buildings”.

Action points:

Developers should be prepared for the tough new measures aimed at addressing failures to remedy historical safety defects. These include:

Final thoughts

Compliance with the Act will come at a cost and the Act introduces additional expenditure for developers and the supply chain generally. The residential property market will be subject to a new levy which will be implemented under s.58 of the Act through secondary legislation. The government has confirmed that the Building Safety Levy will be chargeable on all new residential buildings in England. This has widened the scope of the Building Safety Levy and is expected to raise an additional £3bn over 10 years from developers. Other costs include the BSR’s fees during the gateway process for higher-risk buildings and the fees that may be payable as part of membership of building industry schemes.

These significant changes will add further financial pressure on an industry that is already dealing with a number of challenges including the effects of Covid and Brexit together with material cost increases and labour shortages.  Despite the significant time and cost of complying with the provisions failure to prepare early may lead to project delays and increased costs. Therefore, a proactive approach is advisable as new regulation and guidance is published over the next few months.




Read full article at: https://www.shoosmiths.co.uk/insights/legal-updates/how-developers-can-prepare-now-for-the-building-safety-act-part-1-of-3