The Building Safety Act: what it means to your transaction

It is almost eight years ago that the country woke up to the tragic news of the impact of fire and loss of life at Grenfell Tower in London in June 2017. 

With the delicacy of the discussions regarding the site's future and the mixed reception to Deputy Prime Minister Angela Rayner's handling of the meeting where it was stated that the tower would have to be dismantled because of safety concerns, the provisions in the Building Safety Act 2022 are firmly at the forefront of the news once again.

After the disaster that saw Grenfell Tower burn very quickly, the subsequent investigation found several problems with the construction, with the cladding material and how it was applied to the building coming under primary scrutiny. 

But the inquiry also identified a few other aspects governing the safety of the residents that brought about the Act, which was granted Royal Assent in April 2022, with its contents then becoming the law.

The purpose of the Act was to bring in significant reforms that would give residents and homeowners increased powers, rights and protections to ensure greater safety in in their homes throughout the country. 

Because the inquiry also required building companies to remedy the existing cladding and other identified problems as applied to all buildings over 11 meters (or 5 storeys) tall, the Act also provides protections for residents and homeowners from the building companies passing on the financial responsibilities with respect to building safety concerns.

Ultimately, the Act overhauls previously-existing building regulations, ensuring clarity in how residential buildings should be constructed, how they are maintained and, for those requiring a retrofit because of the current building falling foul of the new legislation, and protection from the cost of the residential building being made safe.

As already highlighted, prior to the Act passing into law, it was the leaseholder who was usually the target when it came to payment for any renovations and upgrades. 

The provisions of the Act ensures that it is now illegal for the building owner to charge any money for the remedial work dictated under the auspices the requirement to remove any cladding which has been designated as dangerous, as well as passing on any costs associated with any defects that affect the building safety unconnected to the cladding systems.

In addition to the protections for leaseholders not to bear remedial costs for building safety defects, the Act ensures that residents in high-rise accommodation have more input into how their building is kept safe.

They also have a legal mechanism by which they can raise safety concerns to the owners of the building. These owners are known as “accountable person(s)”, and the Act also ensures that they have a legal duty and responsibility to listen to the concerns and take appropriate action.

But the Act goes further with the creation of the Building Safety Regulator, to whom residents can refer their complaint if they feel that their concerns are being ignored by the building owner.

As well as the protection from bearing the costs of any work required to remedy cladding problems, where such problems have been identified, they can expect interim measures to be put in place until the cladding problem is resolved, with the Government suggesting measures such as waking watches, where designated people actively look for critical problems in order to warn the residents in the event of fire or other critical safety issues arising.

Finally, all homeowners now have up to 15 years to claim compensation because of substandard construction.

Although most of the Act's provisions are focused on the rights and protections of those living in the buildings, it also provides for the additional requirements of the building owners - including the principal building contractor and the designer.

They will be required to manage the safety risks with the development of a new building from its early architecting stage to the completion of the structure. As the Government website states, the owner(s) are required to “demonstrate that they have effective, proportionate measures in place to manage building safety risks in the higher-risk buildings for which they are responsible”.

Failure to meet these additional responsibilities will result in possible criminal charges, depending on the severity of the issue.

Finally, the Act dictates that it the responsibility of the owners and landlords to finance the remedial work to fix any problems with their buildings.

While the Act is understandably focused on the residents' and leaseholders' rights for the reporting and payment of remedying building and safety issues in the light of the Grenfell tragedy, it also provides a framework for future construction to prevent similar issues arising.

In so doing, it creates a suitable and workable framework for the design stages, the construction and then the ongoing management and maintenance of the buildings, as well as ensuring that the regulations of the construction materials to be used are strengthened, with the creation of the National Regulator for Construction Products.

There is also provision to ensure that all those responsible for contributing to the crisis that has been created with the safety of buildings are in line to pay the costs needed to rectify the mistakes and issues (particularly since the government wants radical action to ensure all cladding issues are resolved by the end of 2029).

When it comes to wanting to buy a property that comes under the purview of the provisions of the Act, it is not always a straightforward proposition. 

While the details of the Act are clear about the responsibilities of those designated as owners of a potentially troublesome building, there is no register of information that your conveyancing solicitor can search to confirm whether remedial work is required or has been completed, and therefore to verify the protections with regards to future work to rectify building safety defects.

That's not to say that they can't find out any information on your behalf, more that anything found in their primary investigations is not necessarily going to be definitive and often results in further checks being made to get the clearest picture of risk to any potential new owner.

In addition, without the measurements specific to the building, the conveyancer will not be able to confirm whether the building falls within the Act or not, nor can they necessarily establish the certification of those who owned the building at a specific juncture in the building's life, nor any information about that owner's finances and their ability to step up to their financial responsibilities in the event of safety problems needing rectification under the provisions of the Act.

But there are several conveyancing forms that need to be completed for a purchase. Two of these, the TA7 (Leasehold Information Form) and the LPE1 (Leasehold Property Enquiries Form 1), should be a step in the right direction - according to The Law Society of England and Wales, these forms may provide the following information that you are looking for:

• the height of the building
• whether the building is a 'relevant building'
• the status of any works (if planned, in progress or completed)
• the existence of a developer's remediation contract
• the existence of landlord's certificates and leaseholder's deeds of certificates

If there is no developer, those completing the LPE1 should be able to provide evidence that the building has remediation funding through the Building Safety Fund or Cladding Safety Scheme.

If the building is eligible for funding, the freeholder or management company should have communicated with the leaseholders as to the position and the seller should provide this information in the TA7.

In addition, the estate agents acting on behalf of the building owner should also be able to provide the following information:

• any known issues or faults that might be affecting the safety or structure of the building, laid out in simple English so that any complex issues can be readily understood
• the costs associated with the remediation
• whether the prospective buyer is required to vacate the premises at the point that any remedial work is required to be carried out
• the actual or expected cost of the remedial work, where any liability for some or all the costs lie with the prospective buyer
• The National Trading Standards Estate and Letting Agency Team (NTSELAT) also recommends that the estate agent obtain a copy of the certificate for the completion of any remedial work to date

Finally, the Law Society highlights another potential source of information: mortgage lenders, surveyors and valuers:

• an appraisal of the fire risk associated with the external walls and any fixed cladding
• a fire risk assessment, which reviews the fire risk of the building (a requirement under the Fire Safety Act 2021)
• an External Wall System Fire Review certificate (EWS1), while not a legal requirement, it helps mortgage lenders to assess the level of risk when it comes to providing a mortgage loan to a prospective buyer

Because of the many potential sources of information, there may be inherent conflicts in the details, which will need to be identified, and the correct position established before signing any contracts on a property of this nature.

When you want to sell your leasehold property, in many ways the process is less complex than for the buyer, since you as the seller will probably be more aware of the issues with the building and have some of the documentation with respect to any building safety issues identification, the certification and details of any remedial work that might have been undertaken.

Your conveyancing solicitor will ask you to complete the TA7 form, which covers most of the leasehold enquiries. Be aware that any misrepresentation of the information you provide at this stage could result in you being consequently liable for future damages.

Your conveyancer will also be responsible for responding to any enquiries the prospective buyer makes relative to The Building Safety Act to ensure the buyer can move forward with confidence, which can be lengthy and time-consuming. 

Your conveyancer will also assist in the creation of a leaseholder deed of certificate in the case where a landlord's certificate can't be identified in the enquiries and via your notification to the landlord for your intent to sell the leasehold property. More information on leaseholders protection can be found the government website.

If you own a leasehold property that is within a building that comes under the definition in the Building Safety Act, there will inevitably be an impact on any plans you might have for remortgaging or transferring equity.

Since it affects your financing and release of funds from the property, there are certain conveyancing processes which need to be followed to successfully see the transaction through.

The details of what building safety issues exist, what has been already fixed, the certification and all the other requirements laid out in the Act means that the normally straightforward transaction will have extra layers of complexity as already described.

As can be seen, the conveyancing for such leasehold properties is far more complex than would be the case for properties which are not covered by the Building Safety Act 2022 (that is, less than 11 metres in height or fewer than five storeys).

As such, not all legal firms will offer the capability as part of their conveyancing services, which means you'll need to line up a conveyancing solicitor, who is both experienced in such matters and will provide the near forensic focus on getting the details right.

At Homeward Legal, we provide this service for £300 incl VAT, which is a set fee and covers all aspects of the Building Safety Act and how it impacts your planned purchase, sale, remortgage and transfer of equity.

Homeward Legal's standard "no completion, no fee" protection is still there for you for the standard conveyancing process. Your assigned conveyancing solicitor will be experienced in all aspects of your transaction and will provide a quality service that is value for money.

Call  to get your transaction started today.