Redress measures: information sheet
This guidance provides an overview of redress measures which ensure that those responsible for contributing to the building safety crisis meet the cost of rectifying their mistakes.
Applies to England, Scotland and Wales
Overview
The government has been clear that those responsible for shoddy workmanship or the supply of defective construction products bear the responsibility to make buildings safe. While some parts of industry have done the right thing and funded the remediation of serious defects, too many are seeking to avoid their responsibilities. This is why the Building Safety Act 2022 has provided new rights to redress.
We have introduced an ambitious toolkit of measures to enhance the ability of building owners, landlords and leaseholders to seek compensation for historical building safety defects and the use of defective or unsafe products. These measures ensure that those responsible for contributing to the building safety crisis meet the cost of rectifying their mistakes.
The following measures are included in this information sheet:
- leaseholder protections introduced in the Building Safety Act 2022
- the changes we have made to the Defective Premises Act 1972
- Building Liability Orders
- the construction products cause of action
Leaseholder Protections
Background
The government is clear that those who have been responsible, and continue to be responsible, for building safety defects have a responsibility to put them right. It was fundamentally unfair that, prior to the introduction of the Building Safety Act 2022, leaseholders were landed with bills they could not afford, to fix problems they did not cause.
What has the Building Safety Act 2022 done?
The Building Safety Act 2022 has brought forward legal protections for leaseholders from historical building safety costs in buildings above 11 metres or five storeys. The Act legally protects qualifying leaseholders (those living in their own home or with up to three UK properties in total) from all costs relating to the remediation of unsafe cladding and contains robust and far-reaching protections from non-cladding costs, including those relating to interim measures such as waking watches.
Where those directly responsible (such as developers) cannot be held to account, building owners and landlords will now be the first port of call to pay for historical safety defects, not leaseholders.
More information on the leaseholder protections can be found in the FAQs and guidance.
What is the scope and extent of the leaseholder protections?
The leaseholder protections apply in England only.
Defective Premises Act 1972
Background
Section 1 of the Defective Premises Act 1972 requires that those involved in constructing a dwelling ensure that the dwelling is ‘fit for habitation’ when the work is completed. The courts have held that dwellings need to remain fit for habitation for a reasonable period thereafter. If, following completion of the work, a dwelling is not fit for habitation, a claim for compensation can be brought by the person who originally commissioned the dwelling, or any person subsequently acquiring a ‘legal or equitable interest’ in the dwelling, such as the building owner, a homeowner or a leaseholder.
What has the Building Safety Act 2022 done?
The Building Safety Act 2022 has substantially increased the period in which building owners, homeowners and leaseholders can make a claim for compensation following the completion of the defective work under section 1 of the Defective Premises Act 1972.
The limitation period has been extended retrospectively (that is for work already completed) from 6 to 30 years. This means that claims can be brought for work that was completed up to 30 years prior to the relevant provision of the Act coming into force (so back to 28 June 1992). The limitation period has been extended prospectively (that is for work completed in the future) from 6 to 15 years.
For future work, the Act has significantly expanded the type of work that is subject to the duty under the Defective Premises Act 1972. It will now include refurbishments and other work to an existing dwelling. This means that contractors who undertake any work on any dwelling (or any building containing a dwelling, such as a block of flats, even if the work is done to a non-residential part of the building) will be required to ensure the relevant dwelling(s) are fit for habitation when that work is completed with respect to that work. If they do not do this, a claim for compensation can be brought.
This change allows building owners, homeowners and leaseholders to seek compensation through the civil courts for unacceptable work undertaken in relation to their properties. As this is a new provision, this change only applies prospectively (so to work completed on and after 28 June 2022).
What is the scope and extent of the Defective Premises Act?
The Defective Premises Act 1972 applies in England and Wales only.
Building Liability Orders
Background
Property developers commonly set up a subsidiary company with very few assets to own and manage an individual development, and which can be wound down once the development is completed.
This practice can be used to secure investment in a project, but a consequence is that it leaves the developer group with no long-term civil liability.
Given the current situation, the government has decided to intervene to help those affected find fair redress for building safety issues.
What has the Building Safety Act 2022 done?
The Building Safety Act 2022 has granted a power to the High Courts which allows them to extend specific liabilities for one company to other associated companies and makes them jointly and severally liable, if the High Court considers it just and equitable to do so. This is known as making a Building Liability Order and ensures that the original developer can be required to fund remediation work.
A claimant can request a Building Liability Order when a claim is made under the Defective Premises Act 1972, section 38 of the Building Act 1984 or any other claim which is incurred as a result of a risk from fire spread or structural failure. Anyone or any organisation who could be liable under these types of claims, and those associated with them, could have a Building Liability Order request submitted against them. This includes, but is not limited to, the original developer and contractors who constructed the building.
What is the scope and extent of Building Liability Orders?
Building Liability Orders apply in England and Wales only.
Construction Products Cause of Action
Background
The government is clear that those who have been responsible, and continue to be responsible, for building safety defects have a responsibility to put them right. There were almost no routes which allowed construction product manufacturers to be held accountable for their role in the creation of building safety risks that cause or contribute to a dwelling being unfit for habitation.
What has the Building Safety Act 2022 done?
The Building Safety Act 2022 has introduced a new cause of action that will enable claims to be brought against construction product manufacturers and sellers for their role in causing problems associated with building safety.
The cause of action applies if a product has been mis-sold, is found to be inherently defective or if there has been a breach of existing construction product regulations. If this contributes to or causes a dwelling to become ‘unfit for habitation’, then a civil claim can be brought through the courts. This is subject to a 30-year limitation period retrospectively (where work has already been completed) and applies to cladding products only. The cause of action is also subject to 15-year limitation period prospectively (that is work completed in the future)and applies to all construction products. This mirrors the changes we have made to the Defective Premises Act 1972.
Persons can recover compensation for physical damage (including injury and damage to property) as well as economic losses.
What is the scope and extent of the Construction Products Cause of Action?
The construction products cause of action applies in England, Wales and Scotland only.