The Building Safety Act 2022 Explained
Why Flat Sales and Purchases Are Being Delayed
Thousands of leasehold flat sales and purchases are being delayed due to requirements introduced by the Building Safety Act 2022. If your buyer’s lender won’t proceed, or your solicitor is asking for documents you’ve never heard of, this guide explains why and what can be done.
Why was the Act brought in?
In June 2017, a fire broke out in an apartment in Grenfell Tower in London. The fire soon spread through the whole tower, killing 72 residents and injuring many more.
The fire spread quickly due to the Aluminium Composite Material cladding that was placed on the building. These panels contained a highly flammable polyethylene core. The fire was the worst residential fire in the United Kingdom since the Blitz of World War II.
Following the tragic events, the British Government acted to identify other high-risk buildings across the country with similar cladding that could be affected if a fire were to break out. They also introduced new legislation to prevent the use of unsafe cladding and similar alternatives in high-rise buildings. Some urgent legislative changes were added to the existing Building Act 1984, and other changes were worked on for inclusion in the new Building Safety Act 2022.
What does the act state and who does it affect?
The Building Safety Act introduced new legal requirements, regulations and guidance that must be followed by property developers and building owners. As part of the Act, a three-stage series of decisions, or a “gateway regime,” was established to provide a clear framework for developers and owners to follow.
The Act also requires there to be a named person to act as the “accountable person”. The role of the accountable person is to review and manage any fire, building safety defects and structural risks to the building and ensure that there is a “golden thread” of information. The accountable person will be responsible for completing fire risk assessments.
In cases where there are multiple accountable persons for a building, there will also be a Principal Accountable Person (PAP). The PAP can undertake the duties of the accountable person, but they will also be required to register the building with the Building Safety Regulators.
The role of the PAP is usually given to the person or organisation that owns the building or has a legal obligation to carry out repairs and maintenance. If there is only one accountable person for a building, then they are typically named as the PAP.
The Act affects all buildings deemed to be at a higher fire risk; this includes those over 18 metres in height or over seven storeys. The Act does not just affect buildings with cladding, but also those that exceed height requirements.
The Act establishes a way for developers and residents to understand:
Who has new legal duties (freeholders, managing agents) for the building
What documents are required to show that the building is compliant with the Act.
Does the Building Safety Act 2022 only affect residential properties?
No, the Building Safety Act is not specific to residential buildings, but it affects all properties which are deemed occupied higher-risk buildings. The Act especially applies to buildings with mixed commercial and residential use. However, there are some buildings which are exempt from the Act, including:
Hospitals and care homes
Agricultural buildings
Crown and government buildings
Hotels
Temporary buildings
Why the Act can delay your purchase or sale
Although the Act helps to ensure the safety of buildings and those that occupy them, it can cause delays to those who are buying or selling flats within the buildings. Numerous factors can cause delays.
As your solicitors, we need to be confident that the building you are buying or selling within is safe and compliant with the regulations. Failing to do this could potentially put your health and safety at risk and by failing to carry out these checks, we will be at risk of fines from regulatory bodies such as the SRA. To be confident in the exchange, we will request to see copies of the buildings Leaseholder’s Deed of Certificate (LDC) and the Landlord’s Certificate (LC).
Without these documents, we cannot proceed your case and will have to push back on the exchange and completion dates.
In our experience, these have been some of the most common things that cause delays:
Managing agents and building freeholders are causing bottlenecks. As previously mentioned, for your solicitor or conveyancer to be confident in the exchange, they will ask to see the relevant certificates. However, in some circumstances, those responsible for the certifications either have not completed them or do not know who should complete them. Leaseholder and landlord certificate delays are often the most common reason for delays.
Gaps in the Government guidance. Although the Act gives clear instructions to those in the real estate sector on what they need to do for building safety. It does not provide sufficient evidence of what they need to do to assist buyers, sellers, and legal professionals. The lack of understanding can often lead to delays as they seek clarification.
Lack of understanding. Legislation is never easy to understand, especially to those who are not legally trained. We find that landlords and managing agents are unaware of, or do not understand, the processes involved.
Mortgage lender complications. Like legal professionals, mortgage lenders will want to review all documents before proceeding with the purchase or sale. As part of their review, they will scrutinise the certificates. If they are not satisfied with the documents, they will ask for more information and, in some circumstances, withdraw the mortgage offer.
As your solicitors, we always strive to ensure that your purchase or sale progresses as smoothly as possible and we will actively follow up with all parties involved to minimise any delays. However, as outlined above, there are several factors beyond our direct control that can affect timescales.
What to do if your flat sale is being delayed by the Building Safety Act?
If you are selling a flat that falls under the Building Safety Act, one of the most important things you should do is fill in the leaseholder certificates as soon as possible. Once this has been completed, your solicitor or conveyancer will present it to the landlord, who will have four weeks in turn to produce or complete a landlord’s certificate. Completing this early can greatly reduce the risk of a delay to your sale.
If you have already completed your certification and are waiting for the landlord or building management, we highly recommend that you stay in constant communication with them to receive updates and chase when necessary. Your solicitor or conveyancer will also be chasing them during this time.
Questions buyers should ask
When buying a flat in a building that will fall under the Building Safety Act, there are some questions that you can ask the current owners and building managers to help you speed up the process:
To the seller, landlord and/or building manager
How tall is the building? This can help you determine whether the building is subject to the BSA.
How old is the building? This can help you determine whether the building is subject to the BSA.
Do you have a Leaseholder’s Deed or Certificate and/or a Landlord’s Certificate, and are they up to date? This ensures the certificate is prioritised and retrieved promptly.
Are they aware of any remediation works? This can help you understand whether the building will undergo any maintenance to remove cladding whilst you are living in it, or whether it has already happened.
To your solicitor or conveyancer
Do you work on purchases of BSA properties? Not all law firms or conveyancers work on files that require Building Safety Act checks.
Will I be a protected leaseholder? This will help you to understand if the landlord will make you pay for fire safety defects.
Who would pay for remediation costs? Can you help you work out whether maintenance is required, and whether you and other tenants in the building will be required to provide funding for the building works, or if it would be the building manager?
As a general rule of thumb, it is always recommended that you receive the answers to your questions in writing so that you can provide evidence in case any complications arise.
Contact us
If you experience a delay in your flat sale or have questions about the Building Safety Act 2022, contact Holden Smith Law. They can help make sure your transaction goes safely and smoothly. Our team can help with both commercial and residential properties. Contact our team by completing our online enquiry form or by calling one of our offices.
