The main leaseholder protection granted by the Building Safety Act 2022 (BSA) is that it helps to protect leaseholders to an extent from bearing the financial burden of remedying historic building safety defects in relevant buildings.
The BSA confirms that developers must pay to fix buildings that they had a role in developing or refurbishing, even where they no longer own the building. – (to comply with the BSA)
The BSA ensures that building owners who are the developers, or owners who are associated with the developers, pays for the remediation of historical safety defects and it prevents the building owners from seeking the remediation costs from leaseholders completely.
In order to be a protected leaseholder, the leaseholders need to first determine whether their dwelling is in a relevant building and whether they are qualifying leaseholders.
A relevant building is a building otherwise described as a higher risk building (HRB). HRB’s are buildings containing 2 or more residential units, or they are care homes, hospitals, hotels and secure residential institutions, all of which need to be at least 18 meters in height or seven storeys or more in order to qualify as an HRB.
The height of the building is measured from the ground level upwards, to the top of the floor surface of the top storey building.
Another condition to be met in order to be granted the leaseholder protections is that the HRB must not leaseholder-owned, meaning that the HRB is not run by a resident management company.
The qualifying leaseholder is established by the Leaseholder Deed of Certificate, which is a certificate relating to the status of the leaseholder as of 14th February 2022. Once the certificate is served, it provides protection for future leaseholders as well.
Five conditions must be met to be a qualifying leaseholder:
Defective Premises Act 1972 (DPA) requires dwellings to be fit for habitation.
The timeframe for bringing claims under the DPA has been extended by the BSA in two main ways, allowing more flexibility for homeowners or residents to make a claim against developers, contractors, or professional consultants.
The limitation period has been extended to 30 years for historic claims and for claims accruing after 28th June 2022, there is a 15-year limitation period from the date of the practical completion.
The Government clarified, in April 2023, that if you are a qualifying leaseholder and you extend or vary your lease, the statutory leaseholder protections in the BSA will not apply. This is because when extending or varying your existing lease, you need to surrender your lease and be granted a new lease which include the agreed extensions/variations.
As the new lease will not have been granted before 14th February 2022, the BSA protections provided to qualifying leaseholders will not be applicable.
It is unknown when the Government is looking to further legislate and resolve this issue concerning lease extensions.
Overall, the BSA has provided a variety of mechanisms which hold those responsible for building safety defects accountable, whilst giving more power, rights, remedies and protection to owners and residents of such buildings.
The BSA does not completely prevent building owners/landlords of HRBs seeking contribution to remedial works from qualifying and non-qualifying leaseholders, however it still provides a contribution cap nonetheless, protecting leaseholders to an extent.
For more information please contact our Residential Property Litigation department.