242: Top tips for buying and selling ‘tall’ mixed use & residential property – Building Safety Act 2022

Following the tragedy of the Grenfell fire, the Building Safety Act 2022 (the Act) has widened the duties on landlords of tall residential and mixed-use buildings to remediate building defects and ensure that the requisite safety standards are met.

It is one of the most far-reaching pieces of legislation to affect property for decades and has complex implications.

Which properties are affected?

The Act applies to residential or mixed-use buildings that contain at least two residential units and are a:-

• ‘higher-risk building‘ of at least 18m or 8 storeys; and / or
• ‘relevant building‘ of at least 11m or 5 storeys, with some exceptions.

Some of the points apply only to higher-risk buildings, some to relevant buildings, and some to all buildings.

Who pays for remedial work for tall buildings affected?

The Act allocates responsibility for dealing with remedial works to make buildings safe. It regulates the remediation costs that a landlord is able to recover through the service charge from tenants of higher risk or relevant buildings so that the costs of remediation are not unfairly passed onto the owners.

What do sellers of tall residential flats need to do?

Before a sale takes place, the owners of residential property within a tall building need to serve a ‘Leaseholders Deed of Certificate’ on their landlord in order to determine whether the lease is a ‘qualifying lease’ within the Act.

If it is, the tenant benefits from additional protection against the costs of remediation works to be carried out by the landlord to remedy defects.

A lease is a ‘qualifying lease’ under which the landlord must pay for remediation works if:

• It is a long lease (granted for 21 years or more) of a single dwelling in a ‘relevant building’ (i.e. at least 11m or 5 storeys)
• The tenant is liable to pay a service charge
• The lease was granted before 14 February 2022
• At the beginning of 14 February 2022
  • the dwelling was the tenant’s only or principal home
  • the tenant did not own any other dwelling in the UK
  • the tenant owned no more than two dwellings in the UK apart from their interest under the lease

A landlord must then serve a ‘Landlord’s Certificate’ within 4 weeks of receipt of a Leaseholder’s Deed of Certificate setting out any remediation works due to the building and providing other detailed information.

What do buyers of tall residential flats need to do?

Buyers of tall residential flats must find out whether the Leaseholders Deed of Certificate and Landlord’s Certificate have been sent and received before buying the property, so they can work out any costs payable for remediation works to the building.

Implications for buyers with mortgages

Following the enactment of the Act, the UK Finance Mortgage Lenders Handbook now includes additional confirmations that conveyancers are required to give in order to be able to sign off to banks that a property is acceptable as security: essentially, whether remediation works are required and whether the requisite Leaseholder and Landlord’s Certificates have been received.

Other time-critical duties for owners of occupied, higher-risk buildings

Each higher-risk building must have a ‘Principal Accountable Person’ (PAP) who ensures that building is registered with the ‘Building Safety Regulator’ (BSR) before the building is occupied. It is an offence for a building to be occupied but not registered.

This provision of the Act came into effect on 6 April 2023 and the deadline for registering existing, occupied, higher-risk buildings is 30 September 2023.

The overarching duties of the PAP include:

• Preventing a building safety risk happening and reducing the seriousness of an incident if one happens
• Registering certain information with the BSR as this information forms the ‘golden thread’ that runs through the lifespan of the building.

The duty to assess risk is ongoing. An assessment must be made:

• As soon as practicable after the building becomes occupied, or, if later, when a person becomes the accountable person for the building.
• At regular intervals.
• At any time when the accountable person has reason to suspect that the current assessment is no longer valid.
• At the direction of the BSR, within a specified period of the direction.

Please do get in touch if you have any queries on how the Act applies to your sale, purchase, or ownership of a tall building.