The Building Safety Act 2022 (and its use in the CPSEs)

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The Building Safety Act 2022 (the “BSA”) was introduced after the Grenfell Tower tragedy as a way of ensuring that buildings are compliant with Building Regulations and that they comply with various requirements to make them safer.

The BSA also gives leaseholders in some large buildings special new protections to stop the building’s owners from including the cost of remediation of unsafe features within the service charge.

Higher-Risk Buildings

A new section has been added to the Commercial Property Standard Enquiries (CPSE).1; Section 15 first asks: “Is the Building a ‘higher-risk’ building”?

Whether the building is higher-risk depends on its size: a higher-risk building must be at least 18 metres in height or seven storeys and must contain at least two residential units. If the building is a care home or hospital still under construction, then it is classified as higher-risk no matter how tall it is.

If it is established that the building is not higher-risk, the rest of the CPSE section can be skipped by inserting “Not Applicable”.

If the building is higher-risk, then the building must have a designated “Accountable Person” taking overall responsibility for the management risks relating to the building, and must be registered with the Building Safety Regulator (the “BSR”).

Further requirements for higher-risk buildings will be introduced in October 2023 and April 2024; these include keeping safety records, assessing the risks and getting a Building Assessment Certificate from the BSR.

These rules apply to any building, regardless of whether it is freehold or leasehold.

Leaseholder Protections

Another aspect of the BSA is the leaseholder protections, which give some safeguards to owners of “qualifying leases”. These safeguards exist to prevent the freehold owners of certain buildings from including in the service charge the cost of remediation works to make the building safe.

A qualifying lease is one that:

  • is a long lease (more than 21 years in length) of a single dwelling within a building that is at least 11 metres tall or five storeys
  • includes a Service Charge
  • was granted before 14 February 2022
  • was the main home of the owner on 14 February 2022 (and the owner didn’t own more than three dwellings in UK).

A qualifying leaseholder cannot be made to contribute to the cost of remedying unsafe cladding, and will only have to contribute to other non-cladding defects up to a limit.

There has been some confusion regarding what happens if a lease is extended or varied in a process that involves the granting of a new lease, as this new lease wouldn’t be protected as a qualifying lease. Parliament is going to discuss this issue soon; new rules may be introduced to address this.

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