The new Building Safety Act and its requirement for a ‘Golden Thread’ of accurate, up-to-date building safety information will have profound consequences for the UK construction and leasehold sectors. The Building Safety Bill is currently making its way through Parliament.
The Bill, which follows the Grenfell Tower tragedy and the subsequent Hackett Report, is being presented by the Government as ‘the next step in ground-breaking reforms to give residents and homeowners more rights, powers and protections – making homes across the country safer.’
This will usher in one of the most significant changes to UK building safety practices in several decades. The bill, which is scheduled to become law in March 2023, is likely to apply to both new build and existing residential buildings (including hospitals and care homes) over 18 metres or seven storeys high. It will introduce a new Building Safety Regulator (BSR), operating under the jurisdiction of the Health & Safety Executive.
The safety of existing buildings will need to be proved; the Building Safety Regulator will require the Accountable Person to present a Safety Case Report before the Regulator issues a Building Assessment certificate. At the same time the Act will introduce radically new processes in relation to new build. It introduces legal building safety responsibilities to the developer (the Accountable Person) the Principal Designer and the Principal Contractor.
It is proposed that the Act will provide three gateways or ‘hard stops’ to the design and build process. The first gateway is at planning; the second before construction commences; and the third at practical completion. Sign-off by the BSR will be required at each of these stages and the Regulator will have the legal power to stop the design or construction process and prevent occupation should building safety requirements not have been met. Central to this is the ‘Golden Thread’, short-hand for the accurate, up-to-date, and joined-up record of building data which the accountable person is legally required to provide.
Charles Seifert, partner at SAY Property Consulting, thinks the new Act and the Golden Thread will have significant implications for the development, construction and property management sectors: "Put simply, failure to build a safe building will become a criminal offence" he says. "It’s the difference between being able to prove that a building is safe rather than probably safe. From a lending, insurance and leasing perspective it will be essential for buildings to be able to demonstrate compliance."
The accountable person is the landlord, who will be legally required to fulfil certain obligations. These include displaying prominently the relevant Building Assessment Certificate as well as appointing a Building Safety Manager (BSM). The BSM will be responsible for ongoing fire and building safety, a position with significant responsibilities. The new Act embodies the idea of resident empowerment, it requires the BSM to engage proactively with residents, consequently there will need to be a formal resident engagement strategy and a clearly defined internal complaints process. Charles Seifert foresees a number of questions which would need to be answered: ‘How would a Building Safety Manager be accredited? How many buildings would they manage and sign off each year?’
The Act also introduces an additional category of expenditure which will be recoverable from leaseholders. The Building Safety Charge will enable the landlord to recover the reasonable costs of the Building Safety Manager along with costs they incur meeting their responsibilities. However, if the landlord, as the accountable person, doesn’t fulfil their obligations in respect of building safety, residents are not liable for rent or service charges until those obligations have been met.
The Golden Thread will bring with it implied obligations within leases. For example, Landlords will benefit from a right of entry within 48 hours to inspect a property on building safety matters. Leaseholders may also be obliged to maintain their property in a demonstrably fire safety-compliant manner. The new Act will also allow residents to pursue claims retrospectively against the developer for up to 15 years following construction in the event of defects being discovered. A developer levy to meet some of the costs of remediation has been mooted, overseen by a New Homes Ombudsman and underpinned by a new Code of Practice. The legislation also proposes that any remediation costs will only be met by lessees once the accountable person has exhausted every other avenue. Whilst the Act will require more Parliamentary time to thrash out the details, given its trajectory Charles Seifert thinks lessees will inevitably pay more. “The new Act and the Golden Thread will make buildings and their residents safer, which is a good thing’ he said. “However, it will make designing, building and maintaining multi-occupier buildings more expensive, which is bound to feed through to residents.”
With thanks to Charles Seifert for this article on Golden Thread.
Charles Seifert, Partner, SAY Property Consulting
M: 07977 120 466