Amendments to the Building Safety Act introduced through the Leasehold and Freehold Reform Act 2024
Amendments to the Building Safety Act 2022 were enacted through the Leasehold and Freehold Reform Act 2024.
Applies to England
Amendments to the Building Safety Act 2022 were enacted through the Leasehold and Freehold Reform Act 2024 on 24 May 2024. The first three measures below came into force automatically on 24 July 2024 and made the following changes:
Cost of litigation
Section 117 of the Leasehold and Freehold Reform Act 2024 will mean residents in a Right to Manage (RTM)/Resident Management (RMC) company who run their own buildings can apply for a Remediation Contribution Order and split the costs among a wider group of leaseholders (where the lease allows) by permitting these to be passed on via the service charge. This is a limited exemption to the leaseholder protections under the Building Safety Act which otherwise protects qualifying leaseholders from freeholders passing on the costs of litigation.
Repeal of section 125
Section 118 of the Leasehold and Freehold Reform Act 2024 resolves a conflict between Insolvency Law and section 125 of the Building Safety Act, which would have allowed amounts recovered through the courts for remediation costs under the Building Safety Act to be distributed to creditors in the first instance. It is Insolvency Practitioners’ legal duty to prioritise paying off creditors under the Insolvency Act. The new section 118 of the Leasehold and Freehold Reform Act 2024 repeals section 125 of the Building Safety Act and so prevents the Building Safety Act from being used to secure funds for creditors rather than being used for remediation
Notification of insolvency
The insolvency of an accountable person can have implications for the safe management of a building which is subject to the Building Safety Act regime. The new section 125A of the Building Safety Act (as amended by section 119 of the Leasehold and Freehold Reform Act 2024) puts a duty on Insolvency Practitioners who are appointed to the insolvency of the owner of leaseholder of a residential building, which is at least 5 storeys/11m+ high, to notify local regulators (local authorities and fire and rescue services). In the case of higher-risk buildings (buildings which are at least 7 storeys or 18m+ in height), the Building Safety Regulator must also be advised. This will ensure regulators have a route to engage with both the Insolvency Practitioner and/or residents to check the building is being safely managed during insolvency proceedings.
Three further measures came into force on 31 October 2024 via commencement regulations and made the following changes:
Relevant steps
Section 114, in conjunction with sections 115 and 116, of the Leasehold and Freehold Reform Act 2024 clarifies that in addition to remediation works, ‘relevant steps’ or ‘interim measures’ towards remediation can be included in Remediation Orders (ROs) and Remediation Contribution Orders (RCOs) under sections 123-124 of the Building Safety Act. ‘Relevant steps’ can include ‘Waking Watch’ fire safety patrols or ‘Simultaneous Evacuation Alarms’, or similar provisions. This clarification means that relevant landlords will be expected to either implement or pay the costs of relevant steps required to make buildings safe. Landlords may pass on costs for non-cladding defects to qualifying leaseholders via service charges, up to the relevant cap for remediation costs under the Leaseholder Protections. This is dependent on the lease value.
Remediation Orders
Section 115 of the Leasehold and Freehold Reform Act 2024 clarifies that the First-tier Tribunal has the power to use a Remediation Order to require a landlord of an 11m+ building to take relevant steps in remedying a relevant defect, as defined in section 120 of the Building Safety Act. This amendment also clarifies the scope and enforceability of a direction issued by the First-tier Tribunal in relation to an expert report to establish the extent of the defects (or potential defect) and works required.
Remediation Contribution Orders
Section 116 of the Leasehold and Freehold Reform Act 2024 makes it clear that a Remediation Contribution Order, under section 124 of the Building Safety Act, can include: (i) costs incurred in taking relevant steps toward remediation, (ii) costs related to obtaining an expert report (as set out in the amendment above), and (iii) associated costs of alternative accommodation when residents are decanted from relevant buildings on building safety grounds. This sections also provides that local authorities can apply to the Court to recover their costs if they pay to rehouse residents in these circumstances.
For more information, please consult the relevant sections in the Leasehold and Freehold Reform Act 2024.
Updates to this page
Published 24 July 2024Last updated 1 November 2024 + show all updates
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Added measures coming into force on 31 October 2024.
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First published.