Building Safety Bulletin July 2021

Proving the old adage ‘stars that burn twice as bright, burn half as long’ firmly wrong, the infamous Building Safety Bill continued to dominate the media landscape this month. The Bill had its first reading at the start of July, gaining mixed reviews. Once the typical procedural pomp of the first reading was out of the way, the media could grab its popcorn and settle in to the lively second reading.  

While the country’s politicians landed verbal blows on one another in Parliament, leaseholders continued to battle with remediation costs and EWS1 forms in the real world. As if remediation bills aren’t enough to deal with, residents of New Providence Wharf, which was recently set ablaze, woke up to find their emergency fire exit blocked by scaffolding…during the middle of a building safety crisis… 

If this has piqued your interest, then settle in for another whistle-stop tour of all things building safety.  

Building Safety Bill: 

Kicking off the month, the Building Safety Bill had its first reading in parliament. The bill includes amendments from the draft version which was proposed last year. Some of the key proposals include: a new developer tax levy for developers intending to build high-risk buildings, a building safety regulator which will oversee the built environment and a nine-year extension to the existing six-year limitation period to bring legal action against responsible parties. The Bill also sets out clearer definitions of who the ‘accountable person’ is for a high-risk building and what their obligations are.  

While this is just a very brief overview of the many proposals made in the 208-page Bill, you may have noticed one thing that is evidently lacking from that list…remediation costs. Many residents across the country hoped that the Bill would set out some new way of protecting leaseholders from remediation costs. Instead, the Bill just outlines that the ‘accountable person’ must exhaust all other options before passing costs on to leaseholders.  

As you can imagine, this omission didn’t get past the media, and the negative coverage rolled in. At the second reading, Conservative MPs Royston Smith and Stephen McPartland expressed their frustration at the exclusion of leaseholder protection. The non-inclusion is likely to cause delays in the Lords’ scrutiny stage of the Bill timeline. The House of Lords has been vocal in its support of leaseholder protection, so it is expected that the government will be lobbied to include an adequate amendment.  

Mr McPartland has been equally vocal about the extension to the limitation period, referring to it as a mere ‘sticking plaster’. The media also expressed concerns that despite the extension, an extra nine years to bring legal action against responsible parties will not necessarily mean that the original contractors will have any money. Nor will residents necessarily have the financial means to commence legal action. Question marks are also left-over residents who took up their lease over 15 years ago.  

Despite the onslaught of criticism, there has been one or two positive appraisals of the Bill from industry media outlets. One welcomed addition has been the development of the ‘Golden Thread’. From the name alone, you may be surprised to hear that the golden thread is not in fact a new Disney fairy tale but is instead a way of ensuring the distribution of information, regarding high-risk buildings, to the relevant duty holders. This means that every time a new party becomes the duty holder during the development of a new building, no information from the previous stages will be lost or ignored. Essentially this will avoid landlords pointing the finger at developers for having not informed them of fire risks.  

MPs now have the chance to submit amendments to the Bill which we expect to be considered towards the end of this year. It will then be another 9-12 months of parliamentary scrutiny. In the meantime, the media will likely continue with its reign-of-terror, leaving no politician safe from persecution until leaseholders are protected.  

To lend or not to lend: 

This month has also reignited the debate over whether lenders require EWS1 forms for buildings under 18m. The saga dates back to earlier in the month when housing secretary Robert Jenrick cheerfully announced that EWS1 forms were no longer required for buildings under 18m. The announcement was made during the second reading of the Building Safety Bill, causing widespread confusion amongst MPs and the media, as the announcement was not actually part of the bill.   

In a matter of hours, media outlets were reporting that ‘Buildings under 18m no longer need an EWS1 form.’ While the overwhelming reaction was relief, other media outlets examined the announcement more closely. The following days of media coverage questioned what had really changed, as no enforcement plans had been mentioned in the announcement.  

Things moved from bad to worse when RICS stated that it could not alter its advice to lenders until the government updates its own fire safety advice. Inside Housing contacted seven major UK banks to clarify their positions and all confirmed that both RICS and the government will need to officially update their advice before they are willing to lend on properties under 18m without an EWS1 form. 

So once you remove the pretty bow and glittery wrapping paper from the announcement, where do leaseholders actually stand? Unfortunately, very much in the same place as they were last month. The announcement appears to be little more than smoke and mirrors, perhaps trying to draw attention away from the lack of any real leaseholder protections in the Bill. 

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