In the week that the Grenfell Inquiry came to an end (the inquiring but anyway, it will be a while before the conclusions are made) we were greeted with a barrage of updates as Rt Hon Greg Clark picks up the mantle as Secretary of State for Levelling Up, Housing and Communities from Michael Gove. The announcements included that 48 Developers have pledged to remediate fire safety defects in buildings over 11 metres that they have played a role in developing over the past 30 years.
This has been followed by a raft of new guidance around how government is going to honour their commitment “to protecting innocent leaseholders from the unfair burden of remediation costs to make their home safe”. Their focus is now the buildings with 2 or more residential dwellings and at least 11 metres in height or has at least five storeys (whichever is reached first). Whilst a lot of attention is on the cladding, the guidance makes it clear that the scope of this new regulatory framework is now far broader too.
Through the Building Safety Act Courts have been granted new powers to extend liability to associated companies . The aim is to ensure that civil cases for claims against defective buildings can be brought against companies associated with a developer, preventing the use of complex corporate structures to avoid liability. 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. The Act ensures that building owners who are – or are associated with – the developer must pay for the remediation of historical safety defects.
The guidance published this week starts to look at the definition of “relevant defect” and what buildings (and leaseholders) are in scope of the protections. There is plenty of information published on cladding where cladding remediation is regarded as the removal of or replacement of any part of a cladding system that meets both of the following conditions:
- it forms the outer wall of an external wall system
- it is unsafe
But the wider relevant defect approach which identifies that non-cladding remediation is work is undertaken to fix a relevant defect, which is not an unsafe cladding system defect.
Examples of non-cladding remediation include:
- replacing inappropriate fire doors
- fixing missing compartmentation, which limits how easily fire can spread through a building
- replacing combustible walkways or balconies
- reinforcing low-strength concrete beams to improve structural integrity
- fixing any other defect in scope of the relevant defect definition that is not a defect of the cladding system
Whilst the developer is in the cross-fire there it feels inevitable that the disputes will not have gone away and the battle ground has shifted. The likelihood is that the developers will be seeking redress through the supply chain and we got more than an inkling of this in the judgment recently handed down in the case Mulalley bs Martley Homes. Here contractor Mulalley was engaged on a design and build JCT 1998 Standard Form of Building Contract in 2005 to re-clad the exterior of the five tower blocks for Martley Homes. Full details of the case are available here (and well worth reading), but the headline is that that contractor is now required to pay £8 million in compensation. Commenting on the case FIS CEO, Iain McIlwee stated:
“This case is the first of many that will start to set precedent on historic claims and now that the Defective Premises Act has been updated and extended, it is likely that this will spread beyond the realms of cladding. We remain committed to ensuring that the mechanisms to manage disputes advance at the same speed as the Polluter Pays agenda so that the judgments are fair, but that huge time and resources is not wasted on legal fees and that we can focus our energies as an industry on getting to grips with the unacceptable legacy that the systemic failure created”
Detailed guidance from the FIS on the Building Safety Act via our Quality Hub here.
You can access the full range of guidance published this week here. We have included links to some of the most relevant sections below:
- What are my building owner’s legal obligations?
- Building safety leaseholder protections: guidance for leaseholders
- Cladding remediation
- Definition of non-cladding remediation
- Definition of ‘relevant building’
- Definition of ‘relevant defect’
- How do these legal changes affect my lease?
- How will cladding costs be paid for?
- Leaseholder contribution caps
- Making sure remediation work is done
- Mandatory information required from leaseholders and building owners
- Non-cladding remediation costs: summary
- Qualifying date, qualifying lease and extent
- Splitting liability among building owners
- What are my building owner’s legal obligations?