The revised Building Safety Bill (Bill) had its first Parliamentary reading on 5 July 2021. Its key goals are to prioritise leaseholders’ safety; overhaul the regulatory framework; clarify responsibilities; ensure safety is considered at “gateways” in the design and construction process; establish a Building Safety Regulator within the Health and Safety Executive (HSE) for buildings over 18 metres; and establish a Homes Ombudsman Scheme.
The government accepts that more detail is needed but intends to collaborate with HSE on transitioning to the new regime. It also recognises that: leaseholders need protection and should not have to face unaffordable costs for historic remediation work; and building owners/responsible persons have responsibility to safeguard residents. A notable addition in the Bill is the extension of the statutory limitation period for bringing defects (including remediation and refurbishment) claims from six years to 15 years with retrospective effect.
The Bill’s impact is significant. It requires − to ensure Grenfell is not repeated − cultural, practical, legal and mindset changes in building and managing buildings (not only high-rise). While its provisions are largely welcome (see, for example, the CLC response), disagreement on whether its provisions go far enough (for example, in funding leaseholder claims) means the Bill may take time to progress to enactment.
In the meantime, the government is urging future “dutyholders” to start preparing immediately. Businesses must learn how to implement these changes and provide financially for both the significant transition and ongoing regulatory costs (like the Gateway 2 levy) and the increase in defects claims − all of which might affect project viability. Developers at risk of defects claims should manage these new risks and review: projects that completed less than 15 years ago to identify potential defects claims; whether potential losses could/should be mitigated by undertaking appropriate remedial works; and the effect of limitation provisions in current and future contracts.
Tracey Summerell and Akin Akinbode
Dentons UK and Middle East LLP