Today on March 23rd, on budget day, government have decided to make a number of important changes to the Building Safety Bill:

Protecting Leaseholders

  • Exempting Leaseholders from paying any costs for remediation. In addition to exempting all leaseholders in buildings over 11 metres from cladding costs, qualifying leaseholders with properties valued at less than £175,000 (or £325,000 in Greater London) will now be protected entirely from all remediation costs, including those related to non-cladding defects. This includes protecting leaseholders who own a small number of properties, providing that those owning up to three properties qualify for all leaseholder protections in the Bill (up from two properties previously).
  • Making it easier for leaseholders to pay their capped contribution towards non-cladding remediation, where their building’s developer, freeholder or landlord cannot be traced or cannot afford to pay the full costs. Government are now allowing leaseholders to spread their contribution payment over ten, rather than five years.
  • Ensuring that remediation, where required, is conducted quickly, preventing leaseholders being trapped for years in unfinished buildings. Remediation Orders will be available to set out the remediation work required, and the time period in which it must be completed by the landlord of a building.

Taken together, these changes mean that many leaseholders across England will now pay nothing for any remediation works; and of those remaining, no one will pay more than £10,000 (£15,000 in London) for remediation works across their lifetime.

Ensuring Industry Pays

  • Government been clear that those who have developed defective buildings or produced and sold dangerous cladding and insulation must pay to fix the problems they created.
  • The Secretary of State will be updating shortly on progress in discussions with industry to ensure they self-remediate their buildings. In the meantime, government will impose a solution on the industry to the need to pay for buildings to be remediated, if they do not agree voluntarily. These include powers to block developers from starting work even where they have planning permission, and to stop new buildings being signed off as fit for use. Government do not want to use these powers, but the industry should be in no doubt that they will not hesitate to use them should it become necessary.
  • Government are also strengthening the tools available to compel developers and construction products manufacturers to pay their share of remediation costs. New Remediation Contribution Orders will be available to compel developers, partnerships and limited liability partnerships, and landlords to pay for remediation, preventing them from hiding their liability behind complex company structures. These Orders will also be able to require developers of defective buildings to reimburse leaseholders for costs they have already paid out. Government are also creating new causes of action to compel construction products manufacturers to pay to put right buildings that have been compromised by their products, further reducing the costs for which leaseholders might become liable.

The Future Safety Regime

Finally, government say they have listened carefully to where leaseholders have noted concerns about the structure of the future safety regime outlined in the Building Safety Bill – particularly where decision-making power is concentrated in the hands of freeholders and managing agents, and not the residents who live in a building and know it best. To that end, government are:

  • Removing the duty to appoint a Building Safety Manager, ensuring there is flexibility in the regime to enable Accountable Persons to set the most appropriate arrangements for their buildings and residents, and removing the unnecessary cost a BSM could impose on leaseholders in high rise buildings.
  • Removing the separate Building Safety Charge, recognising the need to protect leaseholders from another additional charging infrastructure.
  • Requiring the Building Safety Regulator to invite disabled representatives onto its residents’ panel; ensuring they have a strong voice in the regime as those among the most vulnerable in the event of a building fire.
  • Enabling resident-managed buildings to appoint a professional director to support them in meeting their building safety duties

We continue to engage with partners and government on these significant changes.