Unlocking Safety: An overview to the Building Safety Act

The Building Safety Act 2022 was amended and the Levelling Up & Regeneration Act 2023 which received Royal Assent on 26th October 2023 closed the loophole in the Building safety Act 2022 to ensure that the statutory protections for leaseholders continue where qualifying leases are extended, varied, or replaced by an entirely new lease.

This means that the statutory protections limiting or preventing remediation costs from being passed onto qualifying leaseholders will continue to apply as if the new lease were a qualifying lease. This amendment is retrospective, and it applies to leases extended, varied, or replaced since 14 February 2022. Therefore, those leaseholders who have, for example, extended their leases or are in the middle of the process, are covered by the protections.

Frequently Asked Questions

The Building Safety Act 2022, or BSA 2022 for short, became law on April 28, 2022, and the Leaseholder Protections in the BSA 2022 came into force on June 28 2022. It is a set of rules that deal with historic building defects resulting in safety risks.

Part 5 of the BSA 2022 is all about remedying old problems in buildings that can make them unsafe. It is focused on things like fixing defects that could cause fires or make parts of the building to collapse.

The BSA 2022 has rules to protect people who lease apartments or flats (leaseholders) from being excessively charged via service charge for remedying these building defects. These protections are important because they  save leaseholders from paying all the costs for remedying safety problems.

A building is a “relevant building” if it is in England, it’s a high rise multi storey residential or mixed-use building (at least 5 floors or 11 meters high), it has at least two dwellings, and the leaseholders do not own or have an interest in the building.

A “relevant defect” is a historical safety defect in the building that makes it dangerous, such as flammable or combustible cladding or a shaky foundation.

A “qualifying lease” is a lease that meets specific criteria. It’s a lease for a single dwelling for a term exceeding 21 years, and it includes a service charge that can change based on the cost of services. It must have been granted before February 14, 2022, and the leaseholder/tenant must have considered it their main home at that time; or the leaseholder/tenant owned no more that two dwellings in the United Kingdom other than having an interest under the lease.

These protections can be best explained by dividing them into three levels:

Level 1 Protections: If the landlord is responsible for the defect or connected to the responsible party, leaseholders do not have to pay for fixing the problem through the service charge.

Level 2 Protections: If the landlord is wealthy (worth more than £2,000,000 per building) on February 14, 2022, then leaseholders with qualifying leases are protected from paying for the repairs.

Level 3 Protections: Leaseholders with qualifying leases are protected from paying for specific costs related to the defects, regardless of the landlord’s responsibility or wealth if the value of the qualifying lease on 14th February 2022 was less than £325000 in London or £175000 elsewhere in England.

Level 1 Protections apply when the landlord or a related person caused the building defect. Leaseholders, whether they have qualifying leases or not, will not have to pay for the repairs in this case.

Level 2 Protections apply if the landlord on 14th February 2022 met the prescribed wealth test (had a net worth of over £2,000,000 per relevant building owned) then the leaseholders with qualifying leases will not have to pay for the remediation costs.

The costs associated with the remedying relevant defects cannot be passed onto a leaseholder if the value of their qualifying lease on 14th February 2022 was less than £325000 in London or less than £175000 elsewhere.

Level 3 Protections apply in several cases:

For cladding removal or replacement.

For legal or professional services related to the defect.

There’s a limit on how much service charge can be charged based on the building’s location and value on February 14, 2022.

If leaseholders do not benefit from Level 1 Protections and do not have a qualifying lease and therefore cannot benefit from Level 2 and Level 3 Protection, may have to pay for repairs, depending on their lease terms and other statutory regulations . However, they will not be required to make up the difference arising as result of other protected leaseholders not having to contribute towards the remediation costs.

We are here to help

The BSA 2022 is an extremely complex piece of legislation which is still evolving. As this legislation is new, it lacks the precedent-setting case law that typically aids in understanding and interpreting its provisions. Therefore, it is important for both landlords and tenants to obtain expert advice to ensure compliance and mitigate potential legal risks.

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Garner & Hancock realise that the prospect of pursuing a legal matter can be challenging, so we offer an initial phone consultation to discuss your options, and to give you information that will help you make the right choices affecting your case.

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