Building Safety Act Strengthens Four Areas For Occupier Redress

Posted by Premier Guarantee on 9th November 2022 -

A big area of change introduced by the Building Safety Act concerns a strengthening of rights and time limits for occupiers to seek redress from developers, building owners and manufacturers of construction systems.

While a new regime for building control approval for the construction of taller buildings is one of the Act’s bigger headline grabbers, the extension of legal protections for occupiers across all new and existing buildings has potentially even greater implications for the construction sector and building operators.

In this blog we summarise the four main areas where occupiers’ rights of redress have been strengthened by the 2022 Act, and the extended liability limits you need to be aware of.

1. Defective Premises Act 1972

The primary goal of this Act is to ensure that a dwelling is “fit for habitation” once work is completed. Subsequent court directions extended this period to six years.

The Building Safety Act extends this period to 15 years and applies a retrospective period (ie for work already completed) to 30 years, prior to the Act coming into force – back to 28 June 1992, in other words.

The scope of works included has also been expanded to include refurbishments and other works to an existing dwelling, or any building that contains at least one dwellings. Theoretically, if works to one part of a building render another part unfit for habitation, a claim can be brought. This extension only applies to work completed on or after 28 June 2022.

These changes apply to England and Wales only.

2. Building Liability Orders

A claimant can request a Building Liability Order when a claim is made under the Defective Premises Act 1972, section 38 of the Building Act 1984 or any other claim incurred as a result of a risk from fire spread or structural failure.

The Building Safety Act 2022 has granted power to the High Courts to extend specific liabilities for one company to associated companies, making them jointly and severally liable.

This is because many developers create subsidiaries to manage project construction that can be wound down following completion, leading to a parent group retaining no long term civil liability.

Now, any organisation that could be liable under these types of claims, and those associated with them, could have a Building Liability Order request submitted against them.

Building Liability Orders apply in England and Wales only.

3. Construction Products Cause of Action

Prior to the Building Safety Act 2022 there was few and limited routes to bring claims against construction product manufacturers and hold them accountable for their role in the creation of building safety risks leading to a dwelling being unfit for habitation.

The Act introduces a “cause of action” that applies if:

1. A product has been mis-sold
2. It is found to be inherently defective
3. It has already breached existing construction product regulations

A civil claim can be brought through the courts if any of these circumstances contributes to or causes a dwelling to be unfit for habitation.

The same limitation periods apply as the Defective Premises Act 1972. There is a retrospective 30-year limitation period that applies to cladding products only, and a 15-year prospective liability period (following completion of works) that applies to all construction products. Claims can recover compensation for physical damage, such as injury or damage to property, as well as economic losses.

Construction Products Cause of Action applies in England, Wales and Scotland only.

4. Leaseholder Protections

This is one area of redress that is limited to taller buildings. The Building Safety Act 2022 has brought forward legal protections for leaseholders from historical building safety costs in buildings above 11 metres or five storeys.

The Act legally protects qualifying leaseholders (those living in their own home or with up to three UK properties in total) from all costs relating to the remediation of unsafe cladding and contains further protections from non-cladding costs, including those relating to interim measures such as waking watches.

Where those directly responsible (such as developers) cannot be held to account, building owners and landlords will now be the first port of call to pay for historical safety defects, rather than leaseholders. Much more detail can be found on the government website.

The leaseholder protections apply in England only.

Looking ahead

The Building Safety Act 2022 also proposes two major changes to the warranty market covering all new dwelling construction. Unlike the changes above, further secondary legislation will need to be passed before these proposed changes can come into force. Broadly:

• Developers must provide purchasers with a warranty for 15 years, rather than the current 10 years (or 12 years in some cases)
• Penalties can be applied to the developer for not providing such warranties

Premier Guarantee and other providers of structural warranties are currently consulting with the government on this matter. We will likely provide a further update in due course. Subscribe to our blog to ensure you receive this news first.

 

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