The familiar 9-5 office routine for me was quickly replaced by nappies, snotty noses, and teaching mini versions of me to crawl, walk and talk! Just please don’t get me started on potty training!

But just as I have had to adapt to being a working mother, my career as a Residential Conveyancer has evolved, most recently with the changes brought about by the Building Safety Act 2022. 

Socrates once said that “The secret to change is to focus all your energy not on fighting the old but on building the new”.  

Change is hard but unavoidable and during times of change, information is power.  

Here at Comptons Solicitors LLP we don’t resist change but instead have the knowledge to guide you safely through the same and undoubtedly the biggest change in Residential Conveyancing in recent years has been those brought about by the Building Safety Act 2022. 

So what is the Building Safety Act 2022 and why is there such hype about it?

The leaseholder protections in the Building Safety Act 2022 (“the Act”) came into force on 28 June 2022, with new financial protections for leaseholders in buildings above 11 metres or five storeys with historical safety defects, not just in respect of unsafe cladding like in Grenfell.

The Act ensures that those who built defective buildings take responsibility for remedying them, that the industry contributes to fixing the problem, and that leaseholders are protected in law from crippling bills for historical safety defects.

The government is clear that developers must pay to fix buildings they had a role in developing or refurbishing, even where they no longer own the building.

Where a developer cannot be identified or has not yet agreed to pay for its own buildings, funding will be made directly available to pay for cladding system repairs and remediation.

The Act ensures that any contribution required from qualifying leaseholders for non-cladding defects and interim measures (including waking watch costs) is firmly capped and spread over 10 years, with costs already paid out since 28 June 2017 counting towards the cap. If remediation costs exceed the cap, building owners must make up the difference.

How do you know if a Leaseholder can avail of the leaseholder protections in the Building Safety Act 2022?

You are a Qualified Leaseholder and can avail of the protections if you:

a. own a long lease (more than 21 years in length) of a single dwelling in England within a building of above 11 metres or at least five storeys (A Relevant Building)

b. you are responsible for paying a service charge

c. the lease was granted before 14 February 2022

d. on 14 February 2022:

i. the dwelling was your only or main home, meaning it was the home where you spent most of your time, or

ii. you did not own more than 3 dwellings in the United Kingdom in total

The protections which apply to the property based on its status on 14 February 2022 are automatically transferred to future buyers of the lease. This means that if the property was eligible for the protections on 14 February 2022 and is sold subsequently, the buyer also benefits from those protections.

A word of warning though, as a Relevant Building does not include Leaseholder-owned buildings such as:

a. collectively enfranchised buildings – where some, or all, of the qualifying leaseholders have bought the building’s freehold

b. any building where leaseholders directly own the freehold, including through a company, where there is no separate freeholder

c. other circumstances where the freehold is owned 100% by one or more leaseholder

Defects that can avail of the protections are ones that

a. puts people’s safety at risk from the spread of fire, or structural collapse

b. have arisen from work done to a building, including the use of inappropriate or defective products, during its construction, or any later works (such as refurbishment or remediation)

c. has been created in the 30 years prior to the leaseholder protections coming into force (meaning the defect had to be created from 28 June 1992 to 27 June 2022), and

d. it relates to at least one of the following types of works:

i. the initial construction of the building,

ii. the conversion of a non-residential building into a residential building, or

iii. any other works undertaken or commissioned by or on behalf of the building owner or management company.

If you have a qualifying lease in a relevant building, and the defect identified in your building is a relevant defect, then the cost of putting right that defect will qualify for leaseholder protections.

The Leaseholder protections mean that the costs that cannot be passed on to Qualifying Leaseholders:

a. Any historical safety remediation costs where the developer who built or refurbished the building is – or is associated with – the building owner

b. Any historical safety remediation costs where the landlord has a net worth of more than £2 million per relevant building

c. Any historical safety remediation costs where the property is valued at below £325,000 in Greater London or £175,000 elsewhere in England

d. Unsafe cladding remediation costs

e. Cost of legal or associated professional services relating to liability for relevant defects

The Leaseholder protections mean that the costs that may be able to be passed on to Qualifying Leaseholders up to a capped amount are:

a.Waking watch costs

b.Remediation of non-cladding defects, for example:

i. replacement of a fire door that has prematurely degraded and is no longer safe

ii. installation of missing fire compartmentation

iii. inadequate structural fire protections presenting an unacceptable risk of early collapse in fire scenarios

iv. inadequate structural design presenting an unacceptable risk of collapse (for example balcony design which presents an unacceptable risk of vertical fire spread)

c. professional services in relation to relevant works (for example surveys to determine relevant works)

By what if you are not a Qualified Leaseholder?

Non-qualifying leaseholders are only protected from the costs of historical safety remediation if their building owner is – or is associated with – the developer who is responsible for that defect.

Where this is not the case, leaseholders will be liable for remediation costs as per the terms of their lease – but the costs passed on to them cannot be increased to replace money that qualifying leaseholders are protected from paying. 

So how has the Building Safety Act 2022 changed the way I work in residential conveyancing? Let me tell you….

In a sale … 

I encourage clients to complete a Leaseholders Deed of Certificate as it is likely the buyer will ask for this.

I must ensure we are notifying the landlord of the leaseholder’s intention to sell and striving to receive a Landlords certificate within 4 weeks to pass to the purchaser’s solicitors.

In a purchase …

I must check that

1. The height of a building a flat is being purchased in and if that building is a Relevant one to which the Building Safety Act 2022 applies.
2. The Landlord has confirmed they recognise the owner on 14 February 2022 as a Qualifying Leaseholder.
3. Obtain a copy of a Leaseholder Deed of Certificate and evidence it has been served on the Landlord.
4. Checked that the seller has informed the Landlord of their intention to sell and requested a copy of a Landlords certificate within 4 weeks.
5. Ascertain if remediation works under the Building Safety Act 2022 are required and if so, what contribution the purchaser could be asked to make.
6. I have advised the owner of the remediation status of a building, any financial contribution they will be required to make towards the cost of remediation, and the impact of any remediation timescales.
7. I have advised the owner and their mortgage lender if it appears that the purchaser will not benefit from the leaseholder protections under the Act.

For a remortgage … 

I must check that

1. The height of a building a flat is being purchased in and if that building is a Relevant one to which the Building Safety Act 2022 applies.
2. The Landlord has confirmed they recognise the owner on 14 February 2022 as a Qualifying Leaseholder.
3. Obtain a copy of a Leaseholder Deed of Certificate and evidence it has been served on the Landlord.
4. Checked the owner has requested a copy of a Landlords certificate within 4 weeks.
5. Ascertain if remediation works under the Building Safety Act 2022 are required and if so, what contribution the Leaseholder could be asked to make.
6. I have advised the purchaser of the remediation status of a building, any financial contribution they will be required to make towards the cost of remediation, and the impact of any remediation timescales.
7. I have advised the purchaser and their mortgage lender if it appears that the purchaser will not benefit from the leaseholder protections under the Act.

Exciting times of change ahead

So as you can see it’s an exciting time of change in Residential Conveyancing and the complexity and time of transactions have increased.

Here at Comptons Solicitors LLP we will be happy to guide you safely through all the changes.

Is change easy? Nope!

Worth it? Absolutely!  

We owe it to Grenfell.