The Building Safety Bill – An Overhaul Of Limitation Periods Under The Defective Premises Act 1972
The objective of the Building Safety Bill (“Bill”) is to “implement the Government’s ambition for long-lasting reform of the building safety system” in the wake of the tragedy at Grenfell Tower.
The Defective Premises Act 1972 (“DPA”) came into force nearly fifty years ago on 1 January 1974. It has remained largely unamended since its enactment - until now. The Building Safety Bill now going through Parliament will introduce significant changes to the DPA.
The objective of the Building Safety Bill (“Bill”) is to “implement the Government’s ambition for long-lasting reform of the building safety system” [i] in the wake of the tragedy at Grenfell Tower.
The Bill has been the subject of much of debate. As a result, various proposed amendments to the DPA have been announced over the past year and continue to be announced in the run up to the Bill being enacted. The Bill was laid before Parliament on 5 July 2021 and is likely to gain Royal Assent and become law by July 2022.
The Department for Levelling Up, Housing and Communities (“DLUHC”) - formerly the MHCLG - recently published a 'Redress: factsheet’ in relation to the Bill.
The fact-sheet addresses two issues:
- Changes being made to the Defective Premises Act 1972; and
- The "switching on" - after 37 years(!) - of Section 38 of the Building Act 1984.
Defective Premises Act 1972
Section 1 of the DPA imposes a duty on those involved “in connection with the provision of a dwelling” to carry out the work in a workmanlike or professional manner, with proper materials and so that the dwelling "will be fit for habitation when completed".
The standard of design and workmanship will be judged by the standards prevailing at the time the work was done. If the work is completed to an unacceptable standard, a claim for compensation can be brought against parties involved in the original construction by:
- the person who originally commissioned the dwelling, or
- any person subsequently acquiring a legal or equitable interest in the dwelling (this could be the freeholder of a block, a homeowner, or a leaseholder).
Currently however, a claim under Section 1 of the DPA must be brought within six years from either the date of completion of the dwelling or, where remedial work is carried out, six years from the date of completion of that remedial work. Also, a claim can only be brought in relation to the “provision” of a dwelling (i.e. a new build or conversion) and, as such, Section 1 does not usually apply to refurbishment works.
Proposed Changes to the DPA
Through the Bill, the DLUHC are extending the limitation period for claims brought under Section 1. What is highly unusual is the intention that the new limitation period will apply both prospectively and retrospectively.
Completed Works
For work already completed, the limitation period for bringing a claim under Section 1 will be extended, retrospectively, from six to 30 years. This means that potential claimants will be able to bring claims in relation to work completed up to 30 years prior to the date on which the Bill comes into force (i.e. circa 1992).
Future Works
For work yet to be completed / completed after the Bill comes into force, the limitation period will be extended prospectively from six to 15 years.
DLUHC are also materially extending the scope of work that is subject to the duty under the DPA, to include refurbishment and other work to an existing dwelling - albeit this change will only apply prospectively.
Hannah McDonald
Associate Construction, Engineering & Projects
+44(0)1483 252524 hannah.mcdonald@crsblaw.com
Building Act 1984
Whilst Section 7 of the Building Act 1984 (“Building Act”) has been widely referred to in the wake of Grenfell (it creates a rebuttable presumption of non-compliance with the regulations for failure to comply with an approved document) a lesser-known part of the Building Act is Section 38. That is because Section 38 has never been enabled (i.e. legally "switched on") despite the passage of 37 years since this provision was first legislated in the Building Act.
Section 38 provides for a claim to be brought for physical damage caused by a breach of Building Regulations, with a limitation period of 15 years prospectively;
“38 Civil liability.
(1) Subject to this section—
(a) breach of a duty imposed by building regulations, so far as it causes damage, is actionable, except in so far as the regulations provide otherwise,…”
The DLUHC has now announced that Section 38 will come into force (via the Bill) alongside the changes being made to the DPA. Whilst Section 38 applies to all buildings, i.e. not just dwellings, it should be noted that the newly activated provision will only apply prospectively.
Latest Developments
The essence of the fact sheet guidance is that building owners are responsible for the safety of their buildings and should meet the costs of rectification - wherever possible - without passing such costs on to leaseholders. As such, building owners are to be expected to use the provisions of the DPA, and the Bill actually creates a legal requirement for building owners to do so.
Building owners passing on the costs of unsafe cladding to leaseholders is a hotly discussed topic, and one which saw further development with the recent letter from new Secretary of State for Levelling Up, Michael Gove, to the residential property developer industry. He is seeking to agree financial contributions to fund the remediation of unsafe cladding in buildings between 11 and 18 meters high. The sum required to fund the necessary remediation work is currently estimated at around £4 billion.
Mr Gove has given the developer companies until March 2022 to agree a fully funded plan of action to include the remediation of unsafe cladding in buildings between 11 and 18 meters high. In the absence of a solution achieved by then, he will take all necessary steps to secure the necessary funding from these companies. Steps include restricting developers’ access to government funding and future procurements, using planning powers, pursuing companies through the courts or, if necessary, imposing a “solution in law if needs be”. That is almost certainly code for industry specific new tax measures.
If the above steps are put into practice it is not clear at this stage what that may look like. There remains a lot of uncertainty both for developers (who must plan for new contingencies), and for leaseholders who are living in flats with unsafe cladding.
The past twelve months have seen a significant amount of progress and development in relation to building and fire safety, and we expect to see further changes over the coming months.
The Bill has passed the committee stage after examination in the House of Commons and has received its first reading in the House of Lords. The second reading in the House of Lords is tabled for 2 February 2022. Barring any major delays, Royal Assent is expected later this year, with the proposed changes to the DPA and the Building Act following shortly thereafter.
[i] MHCLG (as it then was) Building Safety Bill Impact Assessment dated 20 July 2020
The past twelve months have seen a significant amount of progress and development in relation to building and fire safety, and we expect to see further changes over the coming months.
Hannah McDonald
Associate Construction, Engineering & Projects
+44(0)1483 252524 hannah.mcdonald@crsblaw.com
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