The Building Safety Bill that is currently working its way through Parliament proposes to introduce wide ranging changes to the way that high rise buildings are constructed and maintained.
Developers need to be aware of the proposed changes. This article explains how the law will change in relation to existing developments and the rights that buyers have against developers. A separate article will follow dealing with how the Building Safety Bill applies to new projects that have not yet been built.
What will change?
There are three main changes that developers need to be aware of in relation to existing properties:
- Change to the Defective Premises Act 1972 (DPA)
- Introduction of Section 38 of the Building Act 1984
- Change to the limitation period
The Defective Premises Act 1972
The DPA gives the owners of residential properties who find themselves faced with significant costs for rectifying defects the ability to recover those costs from anyone involved in the construction of their home.
The DPA requires any person or business who undertakes work in connection with the building of a new dwelling to carry out their work in a workmanlike or professional manner and requires them to use “proper materials”. They must also ensure that the dwelling is fit for habitation.
The test as to whether a dwelling is fit for habitation is fairly wide ranging and will depend on the facts of each case. Any major defects will be captured (particularly if they would amount to a breach of Building Regulations) but also where an accumulation of smaller defects exist that causes the occupier significant distress and inconvenience then this may be sufficient to satisfy the test. Recent case law has shown that relatively modest defects can give rise to a claim under the DPA.
Any owner of a residential property can make a claim under the DPA. They do not need to be the first owner. However, as the law currently stands, a claim must be brought within 6 years from completion of the dwelling (this is known as “the limitation period”).
The Building Safety Bill also introduces a change to the DPA that means that, for the first time, a home owner can bring a claim against a contractor in relation to repair work undertaken on their home.
Section 38 of the Building Act 1984 (BA)
The Building Safety Bill also introduces a new provision that allows purchasers of new dwellings to bring a claim for physical damage caused by a breach of building regulations. This further adds to the obligations being imposed on developers.
Limitation periods
One of the main changes that will be introduced with the Building Safety Bill is an extension of the current 6 year limitation period to 15 years for claims arising under the DPA and S.38 of the BA. The extended limitation period will apply retrospectively from the date the Building Safety Bill comes into force. This will open up the possibility of home owners bringing claims against developers where those claims might have expired under the current limitation periods. This is also likely to extend a developer’s liability beyond the period of any new home warranty.
Timing of the Building Safety Bill
The Building Safety Bill is expected to take nine to twelve months to pass through Parliament and come into force. It is therefore unlikely to be enacted until mid-2022. However, developers would be advised to start taking steps immediately to deal with the potential increase in rights that it affords to home buyers.
Commentary
The changes introduced by the Building Safety Bill have been driven by the recent concerns about flat owners facing large repair bills for fire safety defects which they are unable to recover from developers. The changes will open up routes for those home owners to recover these costs.
Whilst the changes result from the fire safety crisis, the changes introduced by the Building Safety Bill will not just impact homes in high rise buildings. It will mean that the owners of all new dwellings, including houses, can bring claims against developers. It will also allow claims to be made for defects unrelated to fire safety issues.
Developers will rightly be concerned about these changes as they give home buyers much wider rights to bring historic claims. Whilst the changes will not actually take effect for some time, developers should immediately amend their document retention policies to ensure that documents and information about all new builds are retained for at least 15 years.