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Building Safety Bill fails to resolve challenges for industry and leaseholders

Out-Law News | 26 Nov 2020 | 4:23 pm | 3 min. read

The House of Commons Housing, Communities and Local Government Committee has "warmly welcomed" the policy intent behind England's draft Building Safety Bill, but has made some serious criticisms of its content.

The committee has published a report following its pre-legislative scrutiny of the draft Bill. The Bill, which was published in July, will introduce new and enhanced regulatory regimes for building safety in England and construction products throughout the UK. It was described by the government as "the biggest change to our building safety regime for 40 years".

In its report, the committee criticised the lack of detail within the Bill itself, which it said hampered its ability to scrutinise the Bill. The government intends to flesh out the new regime using secondary legislation and guidance. The committee has recommended that the government should include that detail within the Bill itself or publish the secondary legislation at the same time as the Bill is introduced to the UK parliament, so that the reforms can be considered as a package.

Building safety law expert Katherine Metcalfe of Pinsent Masons, the law firm behind Out-Law, said: "The effect of this would be to further delay the Bill's passage into law".

"The government had planned to lay the Bill before parliament early in 2021, with a view to obtaining Royal Assent in 2022 and developing the secondary legislation during the course of that year. If it takes on board the committee's recommendations, it would need to front-load that work," she said.

The committee has also recommended that the government publish a clear timetable for commencement of the new regime. This is urgently needed both by those planning new developments, and by future 'accountable persons' who will want their buildings to be ready.

The committee also echoed widespread criticism from residents' groups of the building safety cost provisions within the Bill in its report. As currently drafted, these allow the accountable person to recover the cost of remediating historical defects, as well as future building safety costs. The Bill also creates significant administrative duplication by setting up a cost recovery mechanism for building safety costs which sits outside the service charge provisions in the lease.

The committee's view is that residents should not bear any of the costs of remediating historical building safety defects, and that these should instead be borne jointly by the government and industry. There has been no indication from the government that there will be further funding for remedial works beyond the £1 billion Building Safety Fund announced for the remediation of non-ACM cladding.

Metcalfe said: "The committee's immediate focus appears to be on the remediation of historic issues with cladding. The indications are that the government would need to triple the value of the Building Safety Fund to fix that".

"But cladding is not the whole story. Many buildings also have problems with fire stopping, compartmentation, fire doors, and other fire safety issues. These will come to light as buildings are assessed by owners to bring them into the scope of the new regime. There is currently no funding to address these problems, and they will be as significant as cladding," she said.

The committee strongly endorsed the recommendations of a recent cross-industry report on competence, following Dame Judith Hackitt's proposal to establish a national system of third-party accreditation and registration for all professionals working on the design and construction of higher-risk buildings. The government is yet to respond to the recommendations of this report, which was published last month.

Metcalfe said: "The report comes at a difficult time for owners and residents of buildings with problem cladding".

"The hardening of the insurance market for fire-related cover is significantly increasing premiums for building insurance. There are also serious limitations on the availability of professional indemnity insurance for professionals surveying external wall systems and advising on remediation schemes. These limitations, along with a general skills shortage, are hampering efforts to remediate buildings with unsafe cladding. Meanwhile, significant costs continue to be incurred while 'waking watch' arrangements are in place," she said.

The same problems are also delaying attempts by residents of high-rise blocks to obtain form EWS1, an industry-developed external wall fire review process which is frequently needed before individual apartments can be sold or remortgaged. Last week, the government announced that it had reached an agreement with RICS confirming that buildings without cladding are not subject to the EWS1 regime, along with additional funding to train 2,000 more building assessors.

"That will not assist unless those assessors have professional indemnity insurance in place, therefore the government says it is exploring ways to address that, echoing a theme from the committee's report," Metcalfe said.

The government also published a supplementary advice note for owners of multi-storey, multi-occupied residential buildings last week, building on an advice note published in January. The note seeks to clarify that the January advice is not, and does not replace, law or statutory guidance; and that it should only be used to ensure adequate levels of fire safety for buildings, not as a guide for valuation or insurance purposes.

"These points from the January advice note underlie many of the problems with the EWS1 process," said Metcalfe. "It is to be hoped that these important clarifications will allow surveyors to take a more pragmatic approach to EWS1 assessments."