The Building Safety Act 2022

The Building Safety Act (the “Act”) received royal assent on 28 April 2022. The Act was introduced in response to the Grenfell Tower fire in June 2017 and aims to secure the safety of people in or about buildings and to improve the standard of buildings generally. The provisions of the Act apply to the lifetime of a building from the design and construction phase to subsequent occupation. Secondary legislation is required to implement various measures over the next 12 to 18 months but there are some provisions which have already come into force.

Building Act 1984

The Act brought into force Section 38 of the Building Act 1984 (“BA”). This section creates a statutory claim for breach of Building Regulations where physical damage has been suffered.

Prior to Section 38 coming into force, an injured party would only be able to rely on the following to bring a claim for damage sustained as a result of breach of Building Regulations:

  • an express term in a contract that the works will be carried out in accordance with statutory requirements;
  • an implied term that any works will be carried out in a good and workmanlike manner and using materials that are fit for purpose; or
  • an implied term that works will be carried out in accordance with Building Regulations.

It is important to note that it is only possible to pursue a claim for physical damage under Section 38, such as injury to a person or damage to a property, and pure financial loss is not recoverable.

A claim can be brought by anyone for up to 15 years following completion of the relevant works and these provisions apply to all buildings in England and Wales to which the Building Regulations apply.

Defective Premises Act 1972

Section 1 of the Defective Premises Act 1972 (“DPA”) imposes a duty on anyone undertaking works on a dwelling to ensure that the works are undertaken:

  • in a workmanlike manner;
  • using proper materials; and
  • so as to ensure that the dwelling is fit for habitation.

This duty is owed by the person undertaking the works to the person who commissioned the dwelling and every person who subsequently acquires a legal or equitable interest in the dwelling.

Section 1 only applies to the provision of a dwelling which can include the construction of new dwellings or the conversion of existing buildings into new dwellings. It does not apply to works undertaken to an existing dwelling.

The Act has extended the limitation period for claims under Section 1 of the DPA from 6 years to:

  • 15 years prospectively; and
  • 30 years retrospectively.

This means that claims can be made in relation to works that were completed up to 30 years prior to the Act coming into force.

Given the potentially huge liability for developers and contractors, the Act provides two safeguards for retrospective claims, namely;

  • if a claim breaches a defendant’s human rights it must be dismissed; and
  • any claim that has been previously settled or finally determined cannot be re-commenced as result of the extended limitation period.

The Act also brings into force a new Section 2A to the DPA which extends the scope of the Act to allow a party to bring a claim in respect of any works undertaken to a dwelling in the course of a business, such as refurbishment works to an existing dwelling. Claims pursuant to this section can only be made prospectively with a limitation period of 15 years.

Building Liability Orders

The Act has introduced the concept of Building Liability Orders which permit the High Court in England and Wales to extend the specific liabilities of a company or an LLP to an associated company or LLP so that they are jointly and severally liable for a claim under S38 of the BA, Section 1 and 2A of the DPA and any claim relating to a ‘building safety risk’.

For the purposes of Building Liability Orders, an associated company is a company which is controlled by another company or two companies which are controlled by the same third party, for example parent and sister companies.

A Building Liability Order can be made against an associated company notwithstanding that the company with the original liability has since been wound up or dissolved. This allows a claim to be brought where, for example, a special purpose vehicle is incorporated for the purpose of a specific development and subsequently wound up upon completion of the development.

The High Court can make a Building Liability Order where it considers it to be ‘just and equitable’ to do so.

Each of the above-mentioned provisions came into force on 28 June 2022 and clearly increase the potential exposure of building owners and developers to potential claims.

The team here at Sintons would be more than happy to assist with any commercial property enquiries.

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