Building Safety Act
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A recent FTT case has highlighted the consequences for a landlord where they fail to produce the landlord’s certificate. We are grateful to Cassandra Zanelli of Property Management Legal Services for the information provided.
Access the case here.
- Building Safety Act
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Today (26th October 2023), the Levelling-Up and Regeneration Bill received Royal Assent.
The measures in the Levelling-Up and Regeneration Act will support communities and local authorities to transform their local areas, complementing government investment in projects that will help regenerate left behind areas, and seeks to speed up the planning system, hold developers to account, cut bureaucracy, and encourage more councils to put in place plans to enable the building of new homes.
The Act also contains two amendment to the Building Safety Act, under the Leaseholder Protections legislation, dealing with circumstances where leaseholders may partly-own other properties, and for leaseholder who have extended their lease and no longer satisfying the criteria for a qualifying lease at the qualifying time (before 14th February 2022). The Lords amendments put forward are:
- Lords Amendment to insert a new clause after Clause 214: Nonqualifying leases under the Building Safety Act 2022
Amendment 242 seeks to secure parity between qualifying and non-qualifying leaseholders
under the Building Safety Act 2022, extending protection to three properties for all
leaseholders and excluding from the calculation of the number of properties those where 50%
or less is owned by an individual.
Lords Amendment to insert a new clause after Clause 214: Qualifying leases under the Building Safety Act 2022
Amendment 243 seeks to address the issue whereby a lease which qualifies for the
leaseholder protections under the Building Safety Act 2022 ceases to qualify where it is
‘extended’ (because a ‘lease extension’ is actually a surrender of the existing lease and the
grant of a new one) or, in certain cases, varied. The new section is intended to apply to a
qualifying lease whenever the variation, surrender or regrant occurred and notwithstanding
any agreement that would disapply the section to a particular qualifying lease.
- Building Safety Act
- Lords Amendment to insert a new clause after Clause 214: Nonqualifying leases under the Building Safety Act 2022
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Housing secretary Michael Gove has announced a 30-month transition period before the new second staircase guidance must be followed in England.
Announcing the intended transitional arrangements for the policy in a statement on Tuesday 24th October 2023, Michael Gove said this period will begin from the date the government publishes and confirms the changes to Approved Document B – the government’s building guidance covering fire safety.Housebuilders will then have 30 months from this date, during which new building regulations applications can conform to the guidance “as it exists today, or to the updated guidance”.
In July, Mr Gove confirmed that the government will impose a requirement for second staircases on all new buildings in England that are 18 metres or taller, lowered from the 30 metres proposed when the initial consultation on the policy launched. He said this followed “confirmation from expert bodies that they support this threshold”.
After the two-and-half-year transition period, Mr Gove said “all applications will need to conform to the new guidance”.
Any approved applications that do not follow the new guidance will have 18 months for construction to “get underway in earnest”. If not, they will have to submit a new application following the new guidance.
“Sufficient progress, for this purpose, will match the definition set out in the Building (Higher-Risk Buildings Procedures) (England) Regulations 2023 and will therefore be when the pouring of concrete for either the permanent placement of trench, pad or raft foundations, or for the permanent placement of piling has started,” Mr Gove said.
He added that the transitional arrangements will ensure that projects which already have planning permission with a single staircase, “the safety of which will have been considered as part of that application”, can continue without further delay if they choose.
Mr Gove said: “I want to be absolutely clear that existing and upcoming single-staircase buildings are not inherently unsafe. They will not later need to have a second staircase added, when built in accordance with relevant standards, well maintained and properly managed.
“I expect lenders, managing agents, insurers and others to behave accordingly, and not to impose onerous additional requirements, hurdles or criteria on single-staircase buildings in lending, pricing, management or any other respect. Those who live in new buildings over 18 metres can be reassured that those buildings are already subject to the additional scrutiny of the new, enhanced building safety regime.”
Mr Gove added that the Building Safety Regulator is working to agree the design details that will go into Approved Document B “rapidly” and said he will make a further announcement soon.
- Building Safety Act
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The Home Office has published some updated guidance to help dutyholders, issued by the Secretary of State under Article 50 of the FSO, to assist responsible persons in meeting their duties under the FSO.
Find out whether you are a Responsible Person or Duty Holder under the Fire Safety Order and Fire Safety (England) Regulations and what responsibilities you have for fire safety here.
- Building Safety Act
- Dutyholders
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The FCA has confirmed new measures to support leaseholders in the multi-occupancy buildings insurance market.
The Financial Conduct Authority (FCA) has today (29th September) issued a press release confirming leasehold buildings insurance reforms.
The FCA’s action follows its review of the multi-occupancy buildings insurance market, which found that leasehold buildings insurance premiums had risen significantly since the Grenfell tragedy and building safety crisis, with leaseholders facing substantially higher costs and poor value, althoug unfhortunately, the evidence gathered wasn’t sufficient to assess whether the relatively recent increase in premium rates is fair and appropriate for the risks being underwritten, due to the complexity of underwriting and risk models within the residential property insurance market
From 31st December 2023, insurance firms will be forced to act in leaseholders’ best interests, treat leaseholders as customers when designing products and will be banned from recommending an insurance policy based on commission or remuneration levels, announced in a statement published this morning.
The FCA’s action follows its review of the multi-occupancy buildings insurance market and its aims to ensure better outcomes for leaseholders in the multi-occupancy building insurance market, and other policy stakeholders in a similar position to leaseholders. The new rules will do this by:
• Increasing transparency for leaseholders. This will make it easier for them to identify and challenge poor practices and incentivising firms to deliver better outcomes.
• Requiring firms to ensure their products are consistent with the needs and interests of leaseholders and other policy stakeholders, are priced in a way that provides fair value and that remuneration practices do not lead to poor outcomes.
Insurers will also be required to ensure that their insurance policies provide fair value to leaseholders and provide important information about their policy and its pricing, including the detail of any commission paid for leaseholders.
Although the FCA is pushing ahead with the rules and guidance broadly as they were in the consultation paper, it has made some amendments to them. These amendments are:
• Clarifying the ‘leaseholder’ definition to set out more clearly that it covers residential leaseholders. This means that the disclosure rules only apply to multioccupancy building insurance policies for residential leaseholders. Firms will not need to provide disclosures intended for commercial leaseholders.
• Including an additional part to the definition of ‘policy stakeholder’ so that it only captures natural persons who are acting outside of their trade or profession. This is to clarify that commercial entities (including commercial leaseholders) will not be considered policy stakeholders.
• Introducing guidance to make clear that the required remuneration disclosure for leaseholders must include all forms of remuneration or financial incentive, including contingent remuneration (payment that depends on a policy being taken out) and other remuneration earned post-contract.
• Making provision in the disclosure rules to allow firms to estimate the premium breakdown at building or dwelling level if they are unable to identify an exact figure.
Following a review into broker remuneration practices, the FCA expects brokers to immediately stop paying commissions to third parties (including property managing agents and freeholders) where they do not have appropriate justification and evidence for doing so in line with FCA rules on fair value.
The FCA will undertake further reviews across various products and will consider the full range of regulatory tools available to it as this work is progressed.
- Building Safety Act
- Leaseholder Protections