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The government has recently announced two further legislative changes relating to building safety including (i) changes to the draft Building Safety (Leaseholder Protections etc.) (England) (Amendment) Regulations 2023 (not yet in force) and (ii) the implementation of the Building Safety (Responsible Actor Scheme and Prohibitions) Regulations 2023. Lorna Carter (Head of Construction) and Chi Collins (Head of Property Disputes) summarise important changes brought by these regulations.

Building Safety (Leaseholder Protections etc.) (England) (Amendment) Regulations 2023

What has been updated?

These proposed new regulations update existing regulations relating to building safety leaseholder protections including the: (i) Building Safety (Leaseholder Protections) (Information etc) (England) Regulations 2022 (SI 2022/859) and (ii) Building Safety (Leaseholder Protections) (England) Regulations 2022 (SI 2022/711). These regulations play a critical role in allowing the leaseholder protection provisions within the main Building Safety Act 2022 to function.

The main changes

Amendments to the Building Safety (Leaseholder Protections) (Information etc) (England) Regulations 2022 (SI 2022/859) include:

  • Regulation 3 – inserting the following definitions: “current landlord”, “named manager” and “shared ownership lease”.
  • Regulation 4 – Clarifying which “interested persons” may apply for a remediation contribution order: Homes and Communities Agency, the named manager, RMC (leaseholder owned management companies) or RTM (Right to Manage) companies – essentially resident led organisations of a relevant building.
  • Regulations 5, 6 and 7 – changes to the provision for recovery of amounts between landlords. If there are two or more responsible landlords, their liability is joint and several.
  • Regulation 8 – Landlords, named managers, RMC or RTM companies must share leaseholder certificates with the landlord carrying out repairs.

Amendments to the Building Safety (Leaseholder Protections) (England) Regulations 2022 (SI 2022/711) include:

  • Regulation 11 – adding a new circumstance under which the current landlord must provide a landlord’s certificate.
  • Regulation 11 – where a landlord accepts that they have met the contribution condition and were responsible for a relevant defect (be it directly or indirectly) they will not have to provide information about group structures or accounts.
  • Regulation 13 – Substituting a new form of landlord’s certificate.

These regulations are not yet in force – we will keep you updated when they are.

Building Safety (Responsible Actor Scheme and Prohibitions) Regulations 2023

These regulations passed into law on 3 July 2023 and are now in force.  One of the main features of these regulations is the “Responsible Actors Scheme” which will specify which firms are permitted to carry out major development in England. The scheme is expected to launch this summer and is intended to recognise action taken by housebuilders and developers to remediate fire safety defects.

What does the scheme mean?

Members of the scheme must sign the government’s Developer Remediation Contract – this requires them to take responsibility for addressing defects and keep residents informed on progress. There are also a number of conditions regarding eligibility to sign up to the scheme. Developers who do not agree to responsibilities required under the scheme and/or who fail to meet the scheme’s conditions, will be barred from carrying out major development (anything more than the development of 10 buildings) in England, and may not receive building control approval for construction already underway. It is important to bear in mind that the Remediation Contract applies to residential buildings over 11m.

Members of the scheme must also reimburse any funds that have been drawn from the Building Safety Fund created by the government to remediate cladding defects for works for which they are responsible (which we have previously written about here). 49 developers have currently signed up to the scheme.

After signing up to the scheme, developers are then entering into contracts known as “Delivery Agreements” with freehold owners and block management companies specifically agreeing that they are responsible for the cladding remediation works and setting out how and when these cladding works are to be carried out. We have been advising several freehold owners and block management companies about these often complex agreements and associated documents.

Comment

Both sets of regulations are welcome because it has been challenging advising on issues and documentation emanating from the enactment of the Building Safety Act when awaiting significant gaps to be plugged pending further legislation/regulations.   This complexity of the issues will no doubt continue at least until this new legislation settles and in due course when further clarity is offer through the courts.

Despite this, our Building Safety Group has developed key expertise in this area and is enjoying being at the forefront of tackling developing issues.

Our team is currently advising multiple landlords and management agents about their options for pursuing developers and superior landlords in respect of cladding remediation costs and how to navigate the completion of landlord certificates and associated paperwork for leaseholders who want to sell pending completion of the remediation works. If you need help understanding this complex area of law or to receive more information about our Building Safety Group and how we can help, please get in touch.

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