The Building Safety Bill received Royal Assent on 28th April and was passed into law – however it won’t come into force for two months. The conclusion of the bill process sees confirmation about the level of funding available for the remediation of unsafe cladding in medium-rise buildings (11-18 metres high) in England.
The UK Government reversed its original suggestion to completely exclude leaseholder landlords from plans for developers to cover the cost of cladding remediation in medium-rise blocks.
Under the new legislation, owners of up to three properties in the UK will qualify for the protections. This includes all properties, not just those which require remediation – for example, an owner-occupied principal home plus two let properties.
Landlords with larger portfolios will be excluded from the protections unless the affected property is their primary residence, despite widespread support across the political spectrum for provisions to be extended.
For non-cladding remediation, developers and then building owners will be expected to cover these costs where possible. Building owners will be legally required to prove there are no other sources for funding before passing any costs onto leaseholders.
Building owners will not be able to pass costs onto qualifying leaseholders where they are, or are linked to, the developer or where they have sufficient net wealth.
In the remaining cases, the cost of remediation of non-cladding defects and interim measures, such as waking watches, will be shared between the building owner and leaseholders. Qualifying leaseholders (as outlined above) will be protected by a cap:
The costs will be spread over 10 years, and any payments for non-cladding defects or interim measures made in the last five years will count towards the cost cap. The building owner will be responsible for any costs above the cap.
There will be no protections for leaseholders in buildings less than 11 metres high, as the Government considers there’s “no systematic fire risk”. Buildings over 18 metres high continue to be covered by the Building Safety Fund.
The Government guidance on the leaseholder protections is available on the GOV.UK website.
The Building Safety Bill is an extensive piece of legislation, addressing issues raised by the Grenfell Tower fire and subsequent inquiry. Other provisions include:
Implementation of the full scope of the legislation is expected to take 12-18 months.
Article abridged from; NRLA
Further information; Building safety leaseholder protections factsheet