Today has seen a cascade of very important announcements by government and industry. We have three huge news items that you really do need to read. Better still, have your say!

In this bulletin:

• Draft Building Safety Bill - IRPM Summary
• New Code of Practice Steering group launch consultation on future Code
• IRPM call for member views on Government consultation on Fire Safety Order 

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Draft Building Safety Bill - IRPM Summary

Government today published its long-awaited draft Building Safety Bill. IRPM has condensed the 185 page document into this much shorter summary of essential ‘need to know’ information.

Government intends to consult widely on these proposals and this is your chance to feed back your views. Please do take time to look this over and send us your thoughts. This is the biggest change to the way we will manage buildings for a generation.

Click here to download the full draft bill. 

Summary

The Bill will introduce a new era of accountability, making it clear where the responsibility for managing safety risks lies throughout the design, construction and occupation of buildings in scope, presently considered to be 18m or six storeys upwards in height. The bill is in five main sections:

Part 1 – introduction

Part 2 – provisions about the regulator and higher-risk building definition

Part 3 – amends the Building Act 1984, providing for the regulator to be the building control authority in relation to higher risk buildings

Part 4 – about occupied higher-risk buildings, and imposes duties on accountable persons and building safety managers

Part 5 – supplemental provisions including a new homes ombudsman scheme

Which buildings does this apply to?

“Higher-risk building” means a building of a prescribed description. This will be prescribed under regulations set by the Secretary of State after appropriate consultation. The bill is therefore silent on 18m or 6 storeys, though MHCLG’s press release does state those heights, at least for the present.

Which risks does this apply to?

“Building safety risk” means a risk to the safety of persons in or about a building arising from the occurrence as regards the building of any of the following

-          fire

-          structural failure

-          any other prescribed matter. The regulator may make a recommendation to prescribe a matter under section only if it considers that if the matter occurred in a higher-risk building it would have the potential to cause a major incident.

Higher risk buildings, be they leasehold blocks or build to rent, must be registered by the accountable person with the new regulator and the regulator must publish a list of registered buildings.

Who will be the regulator?

The Health and Safety Executive. MHCLG said

Central to ensuring the regime is effective will be a powerful new Building Safety Regulator housed within the Health and Safety Executive. It will have responsibility for implementing and enforcing the more stringent regime for higher-risk buildings and will oversee the safety and performance of all buildings… …The new Building Safety Regulator will work closely with industry to drive a change in culture that prioritises residents and ensures their safety.

The regulator’s objectives area) securing the safety of people in or about buildings in relation to risks arising from buildings, and (b) improving the standard of buildings.

The regulator must provide such assistance and encouragement to residents, accountable persons and duty holders as it considers appropriate with a view to facilitating their securing the safety of people in or about higher-risk buildings.

Who is the Accountable Person?

The “accountable person” for a higher-risk building is

1. a person who holds a legal estate in possession in any part of the common parts, or
2. a person who is under a relevant repairing obligation in relation to any part of the common parts.

The latter seems likely to include managing agents who are written into tri-partite leases. Build-to-rent operators and agents must also look to their obligations under contract to establish any responsibilities under this bill.

The accountable person can be an individual or a body corporate.

Liability of officers of body corporate

Where an offence under Part 2 or 4 is committed by a body corporate

1. is committed with the consent or connivance of any director, manager, secretary or other similar officer of the body corporate, or any person who was purporting to act in any such capacity, or
2. is attributable to any neglect on the part of any such person

that person as well as the body corporate commits the offence and is liable to be proceeded against and punished accordingly.

This piercing of the corporate veil will place serious obligations not just on professional landlords and managers but also on individual leaseholders who are officers of a management company that owns the freehold/head leasehold or holds repairing obligations as per the definition of accountable person. We have long expressed concerns over resident directors being reluctant to stand as an officer and become liable for the accountable person role.

Duties of the accountable person

The accountable person for an occupied higher-risk building must make an application for a building assurance certificate in relation to the building.

The application must be accompanied by

1. a copy of the most recent safety case report for the building
2. prescribed information about the mandatory occurrence reporting system operated by the accountable person
3. prescribed information demonstrating compliance by the accountable person with their duties
4. a copy of the residents’ engagement strategy.

What is the safety case?

A safety case is the accountable person’s assessment of the building safety risks relating to the building, plus any steps that have been taken in relation to those risks.

The accountable person for an occupied higher-risk building must assess the building safety risks relating to the building. Further assessments must be carried out at regular intervals, if the current assessment is no longer valid, or at the direction of the regulator.

The accountable person must take all reasonable steps for the following purposes

1. preventing a major incident occurring as a result of a building safety risk materialising
2. reducing the severity of the incident

Those steps may involve the accountable person carrying out works to any part of the building promptly. The regulator may direct the accountable person to take specified steps within a specified period.

The accountable person for a higher-risk building must keep copies of prescribed documents in accordance with prescribed standards. Where an accountable person does not hold a copy of a prescribed document, they must obtain it except where it is not practicable to do so.

Residents’ Engagement Strategy

The accountable person for an occupied higher-risk building must prepare a “residents’ engagement strategy” and a copy must be given to every flat owner and resident aged 16 or over. The SecState will make a regulation on the way information can be provided.

The duty to give a copy of the strategy to a resident does not apply if the accountable person is not aware of the resident and has taken all reasonable steps to make themselves aware of residents of the building. The strategy will include

1. information that will be provided to relevant persons about decisions relating to the management of the building
2. the aspects of those decisions that the accountable person will consult relevant persons about
3. the arrangements for obtaining and taking account of the views of relevant persons
4. how the appropriateness of the accountable person’s methods for promoting participation will be measured and kept under review

The accountable person for an occupied higher-risk building must establish a system for the investigation of relevant complaints. The building safety manager for the building must operate the complaints system and may have to refer some complaints to the regulator.

Appointment of building safety manager

The accountable person for a higher-risk building must before the building becomes occupied appoint a person to be the building safety manager for the building.

The building safety manager must manage the building in accordance with the safety case report for the building.

The BSM may be an individual or a corporate role. The accountable person must be satisfied that the BSM has the skills, knowledge, experience and behaviours to carry out the functions of a building safety manager. Where the BSM is not an individual, the accountable person is satisfied of the person’s capability to perform the functions of a building safety manager, and the BSM must appoint an individual acting under its control to be the nominated individual for the building.

Duties on residents

A resident of an occupied higher-risk building aged 16 or over

1. must keep in repair and proper working order any relevant resident’s item (any electrical or gas installation or appliance that is in the dwelling in which the resident resides or is controlled by a resident of the dwelling)
2. must take reasonable care to avoid damaging any relevant safety item (an item that is in, or forms part of, the common parts and is intended to improve the safety of persons in or about the building
3. must comply with a request, made by the accountable person for the building, for information reasonably required

Where it appears to the accountable person for an occupied higher-risk building that a resident has contravened their duty, the accountable person may give the relevant person a notice and apply to the court.

The county court may make an order requiring a resident to provide specified information, do or stop doing a specified thing, by a specified time.

Access to dwellings

The county court may, on an application made by the accountable person, make an order for access to a flat if satisfied that

1. a request in writing for entry to the premises at a reasonable time has been made to the resident,
2. entry to the premises has not been given
3. it is necessary to make the order to enable the accountable person to carry out their duties.

An order would require the resident to allow the accountable person, or a person authorised by the accountable person, to enter the premises at a reasonable time on a specified date or within a specified period.

Recovery of safety related costs

A substantial new section is to be added to the L&TA85, after section 17. The new sections, 17A to 17X apply to long leasehold dwellings in higher risk buildings, adding ‘implied building safety terms’ to a lease.

The terms require

1. a landlord who is the accountable person to carry out those duties or to co-operate with the accountable person if someone else.
2. a leaseholder to pay the landlord any ‘building safety charges’, to allow the landlord access for building safety measures and to carry out the duties of a resident under the Act.

Building Safety Charges (for leasehold blocks) 

Extensive provisions enable recovery of the building safety costs from leaseholders, who will be obliged to pay within 28 days. These costs seem to sit outside leasehold existing service charge provisions (and commonhold contributions) and may simply be contractual costs under the lease. This would make a difference to the debt recovery process in leasehold. Much of the legislation will be familiar to those in the leasehold sector. A similar 18-month rule applies. There is a test of reasonableness on costs that seems analogous to s19 for service charges and a consultation process analogous to s20, with thresholds to be determined. Funds will need to be held in a designated trust account, whereby any other funds in the account are also trust funds. You can map the new sections closely, but not always exactly (there are some differences), to existing legislation as follows:

-          17Q echoes s20B of the LTA 85

-          17R echoes s20C

-          17S echoes s21B

-          17T echoes s27A

-          17U echoes s42 of the LTA 87

Some exemptions may apply to qualifying building safety works where the works are required to be undertaken pursuant to a compliance notice or an urgent action notice issued by the regulator.

Special Measures Manager

If there has been a serious failure, or repeated failures, by the accountable person to comply with their duties or to hold any amounts received in respect of building safety charges in accordance with the relevant requirements, the regulator may apply to the tribunal for an order to appoint a special measures manager. These provisions vaguely echo the 87 Act appointment of a manager and there are cost recovery provisions within this for the manager to be paid.

In the event that a manager has been appointed under the 87 Act, the special measures manager would have supremacy over safety matters.

New Homes Ombudsman Scheme

A new homes ombudsman is to be set up, with jurisdiction across the UK, giving powers to compel developers to become members and to adhere to a Developers’ Code of Practice.

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New Code of Practice Steering group launch consultation on future Code

Following the appointment of Baroness Dianne Hayter as Chair of the Code of Practice Steering Group, the consultation on the future overarching Code of Practice for Residential Property Agents is now open for industry and consumer input.

The consultation, which opens today (Monday 20 July), is based on the 14 recommendations made by Lord Best in his Regulation of Property Agents report of last year, and with the intention of being used by the future Regulator to both authorise and oversee agents.

The objective of the overarching Code of Practice is to set out the principles that underpin the standards of professionalism including conduct and competence that a future Regulator and the public should expect of residential property agents. This will address both firms and individuals.

The overarching code is proposed to have two sections, ‘Dealing with Consumers’ and ‘Managing Businesses and Staff’, and the principles in these will provide a framework for ethical and competent practice. It addresses such issues as encouraging and respecting diversity; treating consumers fairly; agent training and development, conflicts of interests, complaints handling, handling client money and data protection. It also sets standards for transparency of communication and reporting property safety issues.

Sitting underneath this main Code and principles, will be sector codes covering specific agent services such as leasehold and block management, which will be developed later on this year.

It is intended for the overarching Code to apply to all estate agents across the UK; letting and managing agents in England; and all others carrying out residential property agency work, whether traditional high street, online or hybrid, even if it is not their largest or traditional core function. 

The RoPA Code Steering Group will review the responses at the end of the consultation and these will be fed into the final version of the overarching code. 

Please click here to to complete the consultation.

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 IRPM call for member views on Government consultation on Fire Safety Order 

Government has today launched its consultation on proposals to strengthen the Fire Safety Order, implement Grenfell Tower Inquiry recommendations and strengthen the regulatory framework for how building control bodies consult with Fire and Rescue Authorities.

The fire safety consultation, published alongside the draft Building Safety Bill, is key part of government’s package of reform to improve building and fire safety in all regulated premises where people live, stay or work and to deliver key Grenfell Tower Inquiry recommendations.

The changes will make a significant difference to the way property managers will work and intends to clarify how the Order applies to different elements of a building. It is very important that property management professionals consider the implications of the changes. Responding is made much easier as the consultation sets out the issues and then asks a series of questions, seeking your views.

The consultation closes at 11:45pm on 12 October 2020. IRPM need your responses please by Wednesday 30th September 2020. Please send your responses in Word format to info@irpm.org.uk

The fire safety consultation contains proposals to:

• strengthen the Regulatory Reform (Fire Safety) Order 2005 and improve compliance
• implement the Grenfell Tower Inquiry Phase 1 Report recommendations that require a change in law to place new requirements on building owners or managers of multi-occupied residential buildings, mostly high rise buildings
• strengthen the regulatory framework for how building control bodies consult with Fire and Rescue Authorities and the handover of fire safety information

Click here for the link to the MHCLG website, where you can find a full package of documents to support the consultation. Alongside the fire safety consultation documents we have published for reference the impact assessment.