Out-Law News 2 min. read

Cladding Remediation Bill will have major impact on Scottish real estate

Proposed new measures to tackle unsafe cladding in Scotland will have “significant consequences” for the country’s real estate industry when adopted, legal experts have warned.

The message came after the Scottish government introduced the Housing (Cladding Remediation) (Scotland) Bill, aiming to address concerns related to external wall cladding systems in buildings. The Bill, expected to be passed by mid-2024, seeks to establish measures to enhance building safety and confidence among various stakeholders in the real estate sector.

A key component of the legislation is the creation of a publicly accessible Cladding Assurance Register, which would record whether a building requires works to eliminate or mitigate risks associated with its external wall cladding system and when those works were completed.

A single-building assessment – focused on buildings with an external wall cladding system, residential components, and a height exceeding 11 metres – will determine if these works are required. The proposed assessment would cover flatted buildings constructed or developed between 1 June 1992 and 1 June 2022, though the Scottish government would be given flexibility to modify some of these criteria. Failure to provide accurate information to the register would be an offence, punishable by a maximum fine of £1,000.

The Bill would also grant the Scottish government the authority to arrange single-building assessments and remediation work, with the power to evacuate occupants if they are at risk. Occupying premises against official notices would be subject to fines of up to £5,000, imprisonment of up to three months, or both. Owners of buildings would have the right to appeal against notices mandating remedial works, with a strict 21-day timeframe for determination. If an appeal is not resolved within this period, it would be dismissed.

The Bill also proposes the establishment of a Responsible Developers Scheme, allowing engagement with developers connected to buildings with problematic cladding. The scheme is expected to include agreements for developers to bear remediation costs, with potential sanctions for non-compliance. Developers not participating in the scheme may face restrictions on carrying out developments, obtaining building warrants, and having completion certificates verified.

The Scottish Parliament’s Local Government, Housing, and Planning Committee has initiated a call for views on the Cladding Remediation Bill, seeking public input to shape their understanding and recommendations. The consultation period concludes on 8 December.

Katherine Metcalfe, building safety expert at Pinsent Masons, said “The responsible developer scheme proposed by the Scottish Government looks very similar to the equivalent legislation in England. The rest of the Bill is tailored to addressing more specific issues which arise from the system of property ownership in Scotland.”

Graham Horsman, real estate dispute specialist at Pinsent Masons, said: “The Bill proposes to introduce a series of onerous powers that interfere with owners’, occupiers’ and developers’ rights. Consequences of non-adherence are severe, in the form of criminal offences resulting in fines or possible imprisonment. Discharge of these powers by the Scottish government is likely to have significant consequences for these stakeholders.”

He added: “Occupiers and owners may at short notice require to remove and obtain alternative premises, potentially for an unknown period. Owners may be faced with claims from occupiers for interference with lease or licence rights. Developers are at risk of having their business operations interrupted completely if they fall outwith the scheme. It is vital for real estate stakeholders to keep a close eye on the development of this Bill and how it might impact their operations in Scotland.”   

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