The Building Safety Act 2022 (the “Act”) received Royal Assent on 28 April 2022. Introduced to improve building safety following the tragedy at Grenfell tower, the Act establishes a series of new avenues for claims to make it easier primarily for leaseholders and owners to pursue those responsible for life critical building safety defects.
The Act not only amends existing remedies, but also introduces new measures.
Prior to the introduction of the Act, section 1 of the Defective Premises Act (“DPA”) only permitted claims in connection with the original construction or conversion of a dwelling, where, as a result of the work, the dwelling was unfit for habitation (provided that such work was done in the course of a business). However, by a new section 2A, this duty has been extended to include those who do any work on a building, covering refurbishment works as well.
The Act also extends the limitation period for claims under sections 1 and 2A of the DPA. For claims in connection with the original construction or conversion of a dwelling that accrued on or before 27 June 2022, a claimant now has 30 years from the date of the cause of action. For claims connected with the original construction or conversion of a dwelling and/or any work on a building that contains a dwelling that accrue on or after 28 June 2022, a claimant has 15 years from the date of the cause of action.
Section 38 of the Building Act 1984 creates a statutory cause of action for claimants in respect of a breach of building regulations which causes “damage”. Damage includes “the death of, or injury to, any person (including any disease any impairment of a person’s physical or mental condition)”.
Section 38 has not been brought into force yet and it is unclear now if it ever will become law. If it does, the cause of action will apply in respect of all buildings (not just residential buildings) and would potentially allow property owners to bring claims for breach of building regulations where they could not otherwise argue breach of an express or implied contractual term.
The Act introduced the concept of ‘building liability orders’ which the High Court may grant where it considers it just and equitable to do so. It allows a claimant to pursue a developer who may otherwise take advantage of the separate legal personality of corporate entities to escape liability for historic building safety defects. The aim is to prevent developers from avoiding liability by using shell companies or special purpose vehicles.
The order can extend the liabilities of one company to an ‘associated’ company although only in relation to: (a) a claim under the Defective Premises Act 1972; (b) section 38 of the Building Act 1984; or (c) any other claim resulting from a "building safety risk". A “building safety risk” is a risk to the safety of people in or about the building arising from the spread of fire or structural failure.
In order to address non-compliance, the Act provides that remediation orders can be sought in the First-tier Tribunal requiring a landlord to remedy specified relevant defects identified in a relevant building which pose a “building safety risk”. A relevant building is a self-contained building that contains at least two dwellings and is at least 11 metres high or has a least 5 storeys.
Various entities can make an application including: the building safety regulator; a local authority; a tenant; or any other person prescribed by the regulations. The remediation order will identify the ‘specified’ relevant defects and the time frame within which the landlord must remedy those defects.
The Act has also introduced Remediation Contribution Orders which the First-tier Tribunal may order where it considers it just and equitable to do so. A Remediation Contribution Order can require a “specified body corporate” (i.e. a landlord or developer) to make payments to a specified person (i.e. a leaseholder) to meet the costs incurred in remedying defects in a relevant building. The definition of a “specified body corporate” may also cover any person ‘associated’ with the landlord or developer, i.e. companies within the same group structure.
The purpose of Remediation Contribution Orders is to ensure that tenants are not left swallowing the cost of remediation works. Failure to comply means that the landlord or developer may be held in contempt of court, punishable by a fine or up to 2 years in prison. In practice, it is likely that if a remediation order is claimed against a party, that party may itself seek a remediation contribution order from a third party.
The Act introduces new rights to sue construction product manufacturers and suppliers for damages if a construction product does not meet product requirements or is inherently defective. Claimants can recover damages for personal injury, property damage and pure economic loss. The regime is intended to address the use of unsafe cladding products in high-rise residential buildings although its application is wider than just cladding.
Of particular significance is the extended liability period for claimants to bring a claim. The liability period for claims in respect of cladding products is retrospective: if the cause of action accrued before 28 June 2022, a claimant has 30 years from the date on which it accrued to bring a claim. If the cause of action accrued on or after 28 June 2022, a claimant has 15 years from the date of accrual to bring a claim. Liability in respect of products other than cladding is prospective only (applying only after the relevant section came into force, on 28 June 2022), with a limitation period of 15 years from the accrual of the cause of action.
For more information, please contact Mark Manning (Partner, Construction & Infrastructure) or Sian Gibbon (Partner, Property Litigation).
For more information on the Building Safety Act, please visit our Building Safety Hub.
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