Property Lawyers and the Building Safety Act 2022

 I vividly remember the ‘terrible twos’ as a parent with all the associated family turmoil, but until recently, I was not aware of a similar concept in the world of residential conveyancing.

The Building Safety Act 2022 (the Act) and the significance of “the 14th of the second month of 2022”, being the key date for the leaseholder deed of certificate, bring back memories of tantrums, terror, and helplessness.

This piece of legislation has thrown up more problems for busy practitioners than anyone could have envisaged. The Act has four main pillars:

• regulating safety management of high-risk residential buildings;
• control of building and renovation work on high-rise buildings;
• ensuring entities who are responsible for building works that impact on building safety pay for remediation; and,
• provision of a safety net to protect leaseholders from the transmission of costs of remediation into their service charge.

Whilst the spirit of the Act is to be applauded, there is much work to be done.

A cursory examination of LinkedIn will reveal just what a problem the intended safety net issue has generated for transactional property lawyers. Questions that are frequently posed to me include:

Acting for sellers:

• How do I know if the leasehold flat I am selling is in a relevant building?
• Who can tell me if the building exceeds 11 metres or is more than five storeys in height?
• How do I advise a seller to complete a leaseholder deed of certificate?
• Can my seller, an executor, or a buyer who purchased a property after 14th February 2022, complete a leaseholder deed of certificate?

• What happens if my seller client provides incorrect information in the leaseholder deed of certificate?

Those acting for buyers and lenders have questions on similar issues along with other queries including:

Acting for buyers:

• How do I know if a landlord certificate contains accurate information that I, my client, and my client’s lender can rely on?
• What if a leaseholder deed of certificate contains incorrect information?
• Do I and can I explain to my buyer client the protection Schedule 8 of the Act provides?
• Where Schedule 8 protection does not apply as there is no leaseholder deed of certificate, or the building is not a relevant building, or the lease is not a qualifying lease, how do I provide advice to the client about the potential vulnerability that arises concerning service charge?
• What happens if I advise a client that Schedule 8 applies to their lease when it does not or vice versa?

There are further problems if you are acting for landlords, including the difficulties associated with the production of a landlord certificate.

Despite new Regulations (The Building Safety (Leaseholder Protections etc.) (England) (Amendment) No. 895 Regulations) coming into force on 5th August 2023, the position at the time of writing is just as confusing as ever.

The reason for this is that the Act itself is confusing. There are too many examples to list here of poor drafting, terminology with different meanings in different sections, wording without definition, and distinct lack of clarity. If we introduce into the mix the Regulations and over four hundred pages of what is optimistically called ‘Government Guidance’, the problems increase yet further.

With the assistance of a number of professionals, including counsel at Tanfield Chambers and Andrew Butler KC of those chambers in particular, I have found clarity on some issues. It is also important to place on record that the Department of Levelling Up, Housing and Communities have been willing to reach out to the legal community and share experiences, which is to be applauded. But I do not see any light at the end of the tunnel as yet.

I am old enough to remember the terror the introduction of commonhold generated, with the Commonhold and Leasehold Reform Act 2002, and fear that this Act has been far worse in causing a stalling of the leasehold market. I fear for conveyancers, lenders, and surveyors alike. Worst of all, this Act is a vast piece of legislation of which only part is in force.

To be frank, I envisage increased problems as new sections of the Act come into force and practitioners become aware of yet further issues that will arise as we continue this journey.

The conveyancing community will need to stay connected and keep asking questions as they continue to navigate their way through this storm.

This article has been written by Ian Quayle, IQ Legal Training and the opinions and views stated in this article are those of Ian Quayle and not Howden Insurance Brokers Limited (“Howden”). Howden is an insurance broker and is not authorised or regulated to advise on The Building Safety Act 2022. Howden shall not (i) owe or accept any duty, responsibility or liability to you or any other person; and (ii) be liable in respect of any loss, damage or expense caused by your or any other party’s reliance on this article.