The fire at Grenfell Tower in Kensington in 2017 emphasised the need for anyone thinking of buying a flat to investigate the fire safety aspects of the flat and the building it’s part of. This has increased the interest in fire safety for residential buildings. There has been a lot of focus on this subject in the press since Grenfell, and you will have likely have seen more situations such as in Ipswich.
The Building Safety Act 2022 (BSA 2022) forms part of the building safety legislation brought about by the Government in a commitment to protecting leaseholders in offering financial protection on certain building safety remediation costs.
The legislation is vast and complex with new legislation yet to come along with amendments to the existing legislation. Currently, there are limited cases which have been tested in court so it is difficult to know what the affects of the legislation will bring. This has made the sale and purchase of leasehold properties ever more time consuming and having knowledge about the matter, may give you assistance in preparing to sell or buy your leaseholder property.
The Act covers remediation costs associated with cladding and non-cladding defects (including measures such as waking watch) which are historic. It essentially, prevents the costs to rectify the defect going to you as the leaseholder where they are or are associated with the developer. The historic defect must been defined as a ”Relevant Defect” with BSA 2022. This criteria is too long to explain here, but as an example the defect must put people’s safety at risk from the spread of fire, or structural collapse and the work was done before and the defect had to have been created from 28 June 2022 to 27 June 2022.
If a defect is found, protection under the Act is only provided to “qualifying leaseholders” where their building is a “relevant building”.
What is a relevant building?
To be a relevant building the following must criteria must be met:-
- It is at least 11 metres in height or has at least 5 storeys (whichever is first)
- Contains at least 2 dwellings
- It is not a leaseholder-owned building (e.g. residents run management company)
The building is considered a higher risk building if it is over 18 metres in height. These buildings will be registered with the new Building Safety Regulator.
What is a Qualifying Lease?
A Long Lease granted before the 14 February 2022 where the Leaseholder is responsible for paying Service Charge.
What is a Qualifying Leaseholder?
This is established by the Leaseholder Deed of Certificate which provides evidence of the status of the Leaseholder on the 14 February 2022. The property must be or have been the Leaseholders main home or that they do not own more than properties on the 14 February 2022.
If all the above criteria are met, then your landlord will not be able to pass on any costs if they meet the contribution condition or where the property is below a certain value. Where these conditions are not met, costs for non-cladding defects and associated interim measures will be shared between the leaseholder and landlords. If you are a qualifying leaseholder, those costs will be firmly capped and spread over 10 years.
So how might this affect you when you are selling or purchasing your property? I will give a brief overview on this below;
When you sell or purchase, it needs to be established that the above criteria which need to be met are evidenced. The documents which need to be provided by the seller of the property are:
- Leaseholder Deed of Certificate. This document is completed by the leaseholder and identifies whether the property was owned by a tenant/Leaseholder who qualifies for the remediation cost to be paid by someone else. It enables the landlord to understand who within a building, under certain circumstances is required to contribute towards the building safety related costs and ensure that only the sum paid is in accordance with the law.
- Landlord Certificate. This is provided by the building owner in the following circumstances:-
- When they want to pass on part of the cost of remediation onto the leaseholder, through the service charge.
- Within 4 weeks of receiving a notification from the leaseholder that their leasehold interest is to be sold.
- Within 4 weeks of them becoming aware of a relevant defect which was not covered by a previous landlord certificate.
- Within 4 weeks of the leaseholder requesting a landlord’s certificate
It is important that it is established at the time of purchase, whether these documents are available and if by having ownership of the property you will be protected by the provisions of the BSA 2022.
With any leasehold property, there is potential for any remediation work orders which allow landlords to recover money from you to remedy any works. The Act does not provide protection for all remediation costs and only the historic remediations mentioned earlier.
This legislation is complex and it is, therefore, important that you discuss these matters with your conveyancer when you are selling or purchasing a leasehold property. It may be a daunting matter, but here at Fisher Jones Greenwood we have a team of conveyancing specialists who can assist you in your transaction and provide you with further information.
If you or anyone you know would like advice in the conveyancing process, then please contact our conveyancing team.