Hope for Homeowners?

In brief….

Following the Government’s Independent Review of Building Regulations and Fire Safety, the Government are planning to introduce ground breaking reforms which will significantly impact the regulatory landscape for building standards and safety. With the introduction of the Building Safety Bill the Government are seeking to extend developers’ accountability for building defects, bringing hope for residents and homeowners who are currently left to pick up the bill for expensive remedial works.

What is the current position?

The Defective Premises Act 1972 imposes a statutory duty upon “anyone taking on work for, or in connection with, the provision of a dwelling” to ensure that the work is carried out in a workman like manner, with proper materials and that the completed home is fit for habitation.

This means that owners of new homes can bring a claim against builders, property developers, architects, structural engineers and other professionals involved in the building process for defects in the building which render the property uninhabitable. However, the time limit for building owners to bring a claim under the Defective Premises Act is just 6 years. This has caused significant problems for building owners where defects have only come to light years later, particularly with claims in relation to combustible cladding.

In the wake of the Grenfell Tower fire, and the ensuing cladding and fire safety crisis the Government plan to make buildings safer by increasing standards in the construction of homes and ensuring greater accountability and responsibility for fire and structural safety issues throughout the life cycle of a building.

What are the proposed changes?

The proposed Building Safety Bill will make changes to the existing Defective Premises Act and also introduce additional legislative provisions.

The Bill will apply to all high rise residential buildings, hospitals and care homes of at least 18 meters or at least 7 storeys. Under the Bill those involved in the commissioning, design, construction or refurbishment of high rise residential buildings will be responsible for ensuring it is safe and in compliance with building regulations. This will give rise to a large number of claims that would otherwise be time barred.

Extension of duty to cover refurbishment works

The Bill will extend the duties under the Defective Premises Act to include extension or refurbishment works on existing properties provided the works were carried out during the course of a business, and those works have rendered the property uninhabitable.

Implied Terms

There is a proposed amendment to the Bill which, if adopted, will insert implied terms into every residential building and residential renovation contract. The suggested terms are as follows:

All residential units will be:

1. fit for purpose and remain so for a reasonable period;
2. constructed in all material respects as described in the approved plans;
3. not subject to any building safety risk;
4. built from materials as described in the approved plans;
5. built from materials of satisfactory quality;
6. designed to a reasonable standard;
7. prepared with reasonable care and skill and all works will be executed with reasonable care and skill; and
8. comply in all material respects with all applicable statutory requirements and with all building regulations in force as at the date of completion.

A further amendment recommends that no residential property is to be sold by a developer unless the seller has in place a policy of insurance as regards the implied terms.

The implied terms will strengthen consumer rights for home buyers and increase the liability of developers for defects within the properties that they build.

Extended Limitation

The Bill in its current form will increase the limitation period for bringing a claim under the Defective Premises Act to 15 years. Although, subsequent proposed amendments have gone as far as increasing the time period for bringing a claim under the Act to 25 or even 30 years.

Why are we thinking about this now?

The Building Safety Bill is only at the Committee Stage of the legislative process and so it is not clear yet how long it will take to reach Royal Assent and what form it will be in by the time it reaches that stage. Even once the Bill has received Royal Assent it is anticipated that it will only come into force 12-18 months later. So why are we thinking about this now?

Answer: because it is expected that the legislation will apply retrospectively and with a limitation period of (at least) 15 years it could give hope to many building owners who would otherwise have been out of time to bring claims (now) under the current law.

Cardium Law are specialists in construction law, disputes and adjudications. Should you have any queries arising from this article or need our assistance please do not hesitate to contact the article author at terrihattersley@cardiumlaw.com or by telephone on 0207 101 4888.