By Clare Bessant-Nicholls

The shocking fire in 2017 at Grenfell Tower spread rapidly leaving 72 people dead.  The subsequent Inquiry which was set up to investigate the cause of the fire determined that the use of combustible materials in the external cladding system was the reason why a simple kitchen fire was able to engulf the whole of the building and advised that similar materials in other high rise residential buildings should be removed as quickly as possible.  The Inquiry identified numerous failures in the design, construction and management of the building together with inadequate fire safety measures, and the repercussions for the construction industry and for the owners and leaseholders of high rise buildings have been profound.

Where remediation is required, the costs can be high.  The Building Safety Act 2022, which came into force on 28^th July 2022, is intended to address historic building safety defects by holding those responsible to account and provides protection for leaseholders from external cladding system remediation costs.  In theory, building owners are not now able to charge leaseholders for costs incurred where a building requires the removal or remediation of cladding, but this does not apply to all buildings and not all leaseholders will qualify for this protection.

You will only qualify if a number of requirements are met on 14^th February 2022:

• The building must be a relevant building being a building of at least eleven metres or five storeys in height, containing two or more dwellings and the building must not be a leaseholder-owned building;

 

• The lease must be in existence prior to 14^th February 2022 and be a lease of a single dwelling in a relevant building for a term of more than 21 years where the leaseholders are responsible for paying a service charge;

 

• The leaseholder as at 14^th February 2022 must be living in the flat as their only or main home or own not more three dwellings in the UK; and

 

• Only relevant defects are covered with relevant defects being those which put people’s safety at risk from the spread of fire or structural collapse and which have arisen from work carried out during construction or refurbishment or other works commissioned by the building owner, and such work must have been carried out in the thirty years prior to 27^th June 2022.

 

Qualifying leaseholders are protected from all cladding remediation costs but, if the leaseholder as of 14^th February 2022 was not a qualifying leaseholder, then you will not be a qualifying leaseholder either.

The status of the leaseholder as at 14^th February 2022 needs to be recorded and leaseholders should complete a standard form, a Leaseholder Deed of Certificate, and provide this to the building owner so that the building owner knows which leaseholders are protected and this certificate should also be provided to the buyer if a flat is sold.  The Leaseholder Deed of Certificate will become a permanent record and it is important that this is completed as soon as possible before the necessary information is lost in the mists of time and with it the valuable protection afforded by the Act.

Arguably, if the building in which your flat is situated is not a relevant building because it is not of the requisite height or there is no cladding, there should be no need to complete a Leaseholder Deed of Certificate, However, it seems that some lenders are currently requesting these certificates regardless and so, if you are selling your flat, you may still be asked to complete a Leaseholder Deed of Certificate.

In conclusion, the Act should provide much needed financial relief for many leaseholders faced with remediation costs, but the need for a Leaseholder Deed of Certificate places an additional administrative burden on leaseholders and on their conveyancing solicitors.  The Act also has wide ranging implications for the industry and for the owners and managers of high risk residential buildings, with the introduction of a new regime to improve fire safety, but these are outside the scope of this article.