Earlier this year, the Building Safety Act (as amended) gained Royal Assent, following a prolonged period of delay. One of its provisions, called Leaseholder Protections, safeguards leaseholders from the expenses of some building safety work and remediation, and passes that cost on to the developers. And these rules are now already in force.

This essentially does away with the ideas that leaseholders ought to be the first port of call when it comes to funding historical safety issues and defects.  That includes the removal and remediation of cladding on buildings, typically defined as being more than 11m or five storeys high. So residents of high-rise structures in particular will have more say in the way where they live is kept safe.

And, according to the Act, leaseholders are defined as those living in their own homes and owning three UK properties or fewer.

According to the government’s website, the new legislation:

“…overhauls existing regulations, creating lasting change and making clear how residential buildings should be constructed, maintained and made safe.”

The Act also creates three new bodies to oversee this new regime:

  • The Building Safety Regulator
  • The New Homes Ombudsman
  • The National Regulator of Construction Projects

Many of the Act’s detailed provisions are set to be implemented over the couple of years via a schedule of secondary legislation, and the government has carried out a consultation process on this.

More of the detail of this pretty complex legislation is still to come. But, essentially, the Act makes the leaseholder a ‘last resort’ for funding contributions, placing the burden with responsible parties rather than leaseholders, in a significant departure from the previous arrangements, which could see leaseholders landed with potentially life-changing bills.

The ‘funding waterfall’ is due to work as follows:

  • First resort: Developers, plus manufacturers of cladding and/or external wall systems
  • Second resort: Freeholders or building owners, if they have qualifying leaseholders, subject to an affordability test, which kicked in over the summer
  • Final resort: Qualifying leaseholders to pay a capped sum but only towards costs not related to cladding – plus there are various exemptions and variables attached to this, including some very detailed qualification criteria

What Oakfield says

Here at Oakfield, we appreciate that the Building Safety Act, as well as being new, is quite a complicated piece of legislation. So we advise leaseholders to work closely with their resident directors or association and, where necessary, to seek independent local advice, not least because every building and situation is different.

Even this new Act does not protect all leaseholders from all safety-related expenses. Some may have to pay for historic building safety defects not related to cladding, for example.

It also remains to be seen to what extent people can reclaim previous charges such as waking watch fees or hiked-up insurance premiums.

Talk to us at Oakfield if you have any queries about the implications off the Building Safety Act 2022 for you.

Check out our website: https://www.oakfield-property.co.uk/block-management/