This week the team analyses the most recent amendments to the Building Safety Bill, following Michael Gove's announcement on 14 February 2022. We also provide a progress update on the Commercial Rent (Coronavirus) Bill, which is due to be passed by 24 March 2022. All this alongside the recent insights across the firm together with a dose of positive news.
Building Safety Bill – amendments aimed to protect leaseholders from ruinous cladding costs
Michael Gove, Secretary of State for Levelling Up, Housing and Communities, recently announced that the government intends to force the property and construction industry to pay to remove unsafe cladding and protect leaseholders from exorbitant costs. In a bid to make good on that promise, on 14 February 2022 a raft of amendments to the proposed Building Safety Bill were introduced.
The effect of the proposed amendments in terms of service charges for remediation works will be as follows:
- Resident leaseholders in a building of at least 11 metres or 5 storeys will not have to pay for cladding remedial works
- No service charges will be payable in respect of cladding or non-cladding related remedial works where the landlord or an associated company is responsible for the defect;
- For non-cladding related remedial works where no third party can be held responsible, service charges for resident leaseholders will be capped at £15,000 in London or £10,000 outside London, rising to £50,000 if the flat is worth £1-2m and rising further to £100,000 if the flat is worth more than £2m;
- For shared ownership leaseholders the cap is fixed at their percentage share of the caps listed above (e.g., if they own a 50% share in London the cap is £7,500);
- Service charges paid in the last 5 years relating to building safety defects (including waking watch costs) will count towards this cap.
The proposals also allow for relevant persons (including leaseholders, the Building Safety Regulator, local authorities and fire and rescue authorities) to apply for a Remediation Contribution Order whereby the First Tier Tribunal can require a company associated with the landlord to make a payment towards cladding and other fire safety measures which are required, if it is just and equitable to do so.
Separately, the regulator, a local authority and a fire and rescue authority can apply to the Tribunal for a Remediation Order, requiring a landlord to remedy building safety issues.
The amendments will create various far reaching legal enforcement tools, including the power for the Court to make an order in relation to company winding-up proceedings, requiring a company associated with the landlord to make such contributions to the company's assets as the Court considers to be just and equitable. This provision is proposed to be retrospective and apply to historic winding-ups.
The new measures seek to revamp the approach to building safety and give leaseholders more protection against unfair costs. The measures are due to be debated in the House of Lords during the Committee Stage of the Building Safety Bill which begins on Monday 21 February 2022, following which there should be more clarity on the final form of the proposals to be enacted.
The Commercial Rent (Coronavirus) Bill: a progress update
The long-awaited Commercial Rent (Coronavirus) Bill (the Bill) is still currently on track to be passed by 24 March 2022. The Bill, which will provide measures for resolving Covid-19 related rent arrears disputes, has been steadily working its way through Parliament since November 2021.
The Bill has now undergone its first and second reading in the House of Lords and the Committee stage, which was completed on 10 February 2022. In a bid to influence the Bill, which has been heavily criticised by property litigation practitioners, the Property Litigation Association and Property Bar Association made joint submissions to the Select Committee which it is understood have been welcomed, albeit the extent to which the Bill will be amended to take them into account remains to be seen. The Bill will now move to the report stage which will give all members of the Lords a further opportunity to examine and scrutinise the current version of the Bill and vote on any proposed amendments. Following the report stage the amended Bill will move to its third reading, which will be the final chance the Lords have to make changes to the Bill.
The progress of the Bill can be tracked here: https://bills.parliament.uk/bills/3064
Insights from across the firm
In a recent podcast, Trowers & Hamlins' Sara Bailey speaks to Martyn Evans on the importance of good development and the societal impact of the built environment.
A briefing note on the National Security and Investment Act 2021, which expands the Government's powers to scrutinise and intervene in certain acquisitions and investments.
Coinciding with TUPE's 40th birthday, Trowers & Hamlins is hosting a webinar on TUPE and Procurement, on 22 February 2022.
Trowers & Hamlins have partnered with ecology consultants, BioGains, to bring you planning updates on biodiversity net gain requirements for new development, by webinar on 23 February 2022.
Positive news stories
A baby bonobo has been born at Leicestershire's Twycross Zoo. Upendi, which means love in Swahili, was born to 25 year old mum, Cheka, just in time for Valentine's Day and World Bonobo Day.
A café and farm in South Devon have found a way to turn food scrapped from plates into usable compost in less than 24 hours using a heat and enzyme producing machine.
From September, free Welsh language lessons will be offered to 16-25 year-olds, teachers and teaching assistants living in Wales.