The Building Safety Act 2022 (the Act) was brought in to rectify the shortcomings in the safety of high-rise buildings, exposed in the Grenfell Tower tragedy in 2017.
Since then, many leaseholders have worried about of the safety of their cladding, and the potentially extortionate costs of remedial works.
Thankfully, the Act makes things safer and fairer for owners of leasehold flats in tall buildings. It received the Royal Assent on 28 April 2022 and changes came into force in April 2023, with full implementation in October 2023.
It typically applies to residential buildings of at least 11 meters or five storeys high. One of the most significant changes is the introduction of a new regulator, the Building Safety Regulator, which sits within the Health & Safety Executive.
The Building Safety Regulator will (i) oversee the safety and standards of all buildings (ii) encourage the built environment industry to improve competence (iii) lead the implementation of the new regulatory framework for high-rise buildings.
All well and good, but what does it all mean for you if you own a leasehold flat, or you’re thinking about buying one?
Owners of individual leasehold flats: Peace of mind
The Act eases the burden of stress and worry on current owners of leasehold flats.
Before the Act, leaseholders were facing eyewatering bills for remediation work. Now, the Act limits the costs that the landlord can recuperate from tenants for work that makes the building safe, such as replacing the cladding. In most circumstances, these works cannot be recovered through the service charge.
You also get a greater say in how your building is kept safe. Now when you raise concerns with the accountable person (who is usually your landlord) they have a duty to listen to you. If you think you aren’t being taken seriously, or you’re being ignored, you can escalate your concerns to the Building Safety Regulator.
Selling your property should become easier. When there was uncertainty over who footed the bill for remediation work, it was difficult for owners to sell leasehold flats. But now we have clarity, it’s more straightforward.
If you’re intending to sell, you need to serve a Leaseholder’s Deed of Certificate on your landlord to determine if your lease is ‘qualifying’ under the Act. If it is, then you have some protection from the cost of remedial works.
You’ll have a ‘qualifying’ lease if (i) you pay the service charge, (ii) the lease is more than 21 years long, (iii) the lease was granted before 14 February 2022 and (iv) on that date the flat was your only or main home, and you did not own more than 3 dwellings in the UK.
If you fall within those criteria, you still need your Leaseholder’s Deed of Certificate and your landlord’s reply in the form of a Leaseholder Certificate to confirm it.
Buying a leasehold flat: ask the right questions
If you’re buying a leasehold flat in a high-rise residential building, here are a few questions you can ask to make sure you’re protected by the Act, and you won’t get stung for the cost of remedial works.
- Is the building enfranchised? (i.e. owned by tenants)
If the answer is ‘yes’ then the Act does not apply and you may be on the hook for any planned remedial works.
- What level of costs can the landlord recuperate from tenants for remedial works?
While costs are limited under the Act, they may not be zero. Check if there are works planned and what your expected contribution might be.
- Ask if the Leaseholder’s Deed of Certificate has been served
And then ask if the Landlord has served its Leaseholder Certificate in response. This will indicate the level of costs for remediation work is due to the building, and if landlord can recover those costs via the service charge.
- Is the building registered yet?
Under the Act, all qualifying buildings need to be registered by 1 October 2023 with the Health & Safety Executive. If it’s not registered, it’s a problem for the landlord, not you. But it’s a good indication of their understanding of the Act and their urgency to comply.
We hope you have found this blog useful and whilst we, as a company, have decided to focus on freehold transactions for the foreseeable future, due to the uncertainty and issues with some lenders regarding the provisions of the act and leasehold properties generally (many are defective and need a lot of specialist care and attention), we know many leasehold specialists who can assist you.