The Building Safety Act 2022 – the Developer Remediation Contract?

Conveyancers have been awaiting some help from the Law Society on the Building Safety Act 2022 (BSA). Guidance has now been provided.

The guidance is helpful, it does not though provide a routemap as such for how conveyancers can successfully navigate the BSA.

The guidance does not fill in the holes in the legislation. It appears though that the legislation is not “going away” and conveyancers are still left with the decision – to act or not to act?

To go into the guidance completely, and what comes from it, would take more than just a blog or article, however there is one aspect worthy of attention - the Developer Remediation Contract.

The guidance describes a key step for conveyancers is to establish the status of any remediation contract and the works agreed. The obligation on us here would appear to be to ascertain whether a developer has entered into a developer remediation contract and whether the developer has or is about to comply with the obligations under the contract.

The developer remediation contract entered into between developers and government reduces the number of buildings that will require remediation for which leaseholders will be required to pay by way of service charge. The contract requires a developer who has entered into it to identify, assess and remediate buildings as soon as practicable, to report to government on progress made on a quarterly basis, and keep residents informed about progress.

A developer remediation contract is only relevant to buildings over 11 metres and more than 5 storeys (meaning relevant buildings and higher risk buildings).

A conveyancer is not going to be in a position to advise on whether a developer has identified, assessed and remediated buildings as soon as practicable. All a conveyancer can do is:-

• Limit the retainer so the client is aware that such advice cannot be given.
• Where a seller or landlord provides information on identification, assessment and remediation of buildings, to draw to the buyer client, any lender client and any surveyor or valuer acting for either that the information has been provided with a recommendation that specialist advice is sought on works required and the potential costs to be incurred.
• Ensure that documentation provided concerning quarterly reports to the government and information provided by the developer is brought to the buyer client and lender clients attention.
• Where remediation work is identified it is a matter for the conveyancer whether advice or explanation is provided as the nature of the remediation work and where the building is a relevant building whether and to what extent Schedule 8 will provide protection (Schedule 8 contains protections for long leaseholders, or classes of long leaseholder, designed to stop certain service charges relating to building safety defects from being passed to them. These protections only apply where a building is at least five storeys or 11 metres high and contains at least two residential units.)
• The Guidance refers to Residential Long Leaseholders and denotes their obligation to pay service charges towards what are described as major works as referred to in the residential long lease of the property.