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Leaseholder's Guide to The Building Safety Bill

On 5 July, 2021, the government published the Building Safety Bill. This bill aims to regulate the construction industry and ensure that every resident in the country feels safe in their own home. The government felt the need to introduce stricter reforms in the industry after the Grenfell Tower fire that caused loss of life and damage to property. In the inquiry that was commissioned by the government to investigate the tragedy, various industry issues were highlighted. The Building Safety Bill addresses these issues and aims to create transparency and accountability in the industry in the future. Here are some things you should know, as a leaseholder, about the Building Safety Bill:

Building Safety Regulator

The Building Safety Bill introduces the Building Safety Regulator who will be responsible for regulating the safety and performance of buildings, improving the standards and competencies of the construction industry and leading the implementation of the new regulatory regime for higher-risk buildings. Additionally, the Building Safety Regulator will also have enforcement powers along with the duty to maintain a residents’ panel, an industry competence committee and a building advisory committee. The government has confirmed that the Building Safety Regulator will be operating at scale within the next 12 to 18 months.

Golden Thread of Information

In order to increase transparency and accountability in the industry, the Building Safety Bill introduces the “Golden Thread” of information for new builds. The golden thread of information is a digital record of all the important information related to a building, collected throughout its lifecycle. The Golden Thread of information will be initiated at the planning stage and maintained by relevant duty holders throughout the lifecycle of the building and then passed on to building owners and leaseholders at occupation.

Placing Greater Responsibilities on Building Owners with Regards to Fire

Based on the new requirements mentioned in the Building Safety Bill, the building owner will have to appoint a person to be responsible for the building. This individual will be required to preserve and make available appropriate information to educate and inform the residents about the fire safety rules throughout the lifetime of the building.

Non adherence to regulations will result in tougher fines for those responsible people who breach the Fire Safety Order. These changes are expected to come into effect  six to 12 months after the bill receives royal assent.

Costs to Leaseholders

The Building Safety Bill introduces the concept of a Building Safety Charge that would be collected from leaseholders and would be used towards the ongoing costs of new regulatory regimes. The government estimates that the average monthly charge would be £16 per leaseholder and this is expected to come into force by spring or winter of 2023.

However, while the Building Safety Bill makes provisions for future costs, the bill does not protect leaseholders from the current cost of remediation, especially in cases where the contracts allow for the passing on of costs to leaseholders. It does bring forward measures to protect leaseholders by asking building owners to explore alternative cost recovery routes before passing costs on to leaseholders. But if the building owner proves that all other avenues have been exhausted, they can still pass on costs to the leaseholders.

Introduction of a New Homes Ombudsman

The Building Safety Bill introduces a New Homes Ombudsman to deal with a range of building safety defects in new builds and resolve disputes specifically related to newly built homes. Under the terms of the Building Safety Bill, the developer will need to sign up and remain a member of the New Homes Ombudsman. Developers who fail to sign up to the ombudsman will receive additional sanctions.

The New Homes Ombudsman is expected to come into force within 12 to 18 months of the bill receiving royal assent.