The building safety regime — how is it shaping up so far, and what is yet to come?

After the Grenfell Tower fire, the government vowed to introduce major changes to ensure that new buildings are safe, that defects in existing ones are remedied, and that the right parties bear the cost.

The Building Safety Act 2022 was a major step towards that goal, accompanied by a raft of other laws, initiatives and guidance, much of it following recommendations from the Grenfell Tower Inquiry and the Hackitt Review.

Whilst a good deal remains ongoing or TBC, we can now form a clearer picture of how the regime is bedding in. We consider some developments and themes, and what is yet to come.

Regulatory oversight

The Building Safety Act 2022 (“BSA”) created a new body: the Building Safety Regulator (“BSR”). One of the BSR’s objectives was to assess the safety of the country’s (circa 15,000) existing high-rise buildings. There have been significant delays in working through those, and a low pass rate (as of July this year the BSR had assessed just 2,000 buildings - with 66% of them failing).

To address this, the BSR has adjusted its approach: it is now focussing on a smaller sample of the most high-risk buildings for immediate attention. It has also established a Remediation Enforcement Unit to ensure defects are addressed. and is set to publish new guidance to ensure its staff undertake assessments consistently, and to help building owners demonstrate compliance.

Guidance – constantly under review, not static

One lesson from Grenfell was the need for standards, processes and guidance to be kept under constant review and update to ensure they are effective, clear and workable.

We see that in action with the BSR’s change of focus. Two other recent examples:

• In September, the BSI published an updated version of PAS9980, the framework for assessing the fire risk of external wall systems. The new version replaces the 2022, and is based on current best practice and intended to improve the clarity, structure and consistency of the assessment process. Accompanying guidance is to follow shortly.

• On 30 September, an updated Approved Document B came into effect. Key changes include an expectation that apartment blocks over 18 metres have more than one common staircase, and provisions for evacuation lifts.

Who pays for ensuring buildings are safe?

A key aim of the new regime was that the cost of building safety should be borne not by residents, but by the construction industry, developers and landlords.

What does this this mean in practice — what funding is in place, and what mechanisms to ensure the ‘right’ parties pay?

Government funding

The Cladding Safety Scheme (“CSS”) is currently funding many projects to remediate unsafe cladding in residential buildings over 18 metres, and remains open for applications until March 2030.

In August, the CSS was expanded to take in buildings under 11 metres. This has a narrower scope than the main scheme — remedial work will only be funded for the highest-risk low-rise buildings, and applications are open only until 9 October 2026.

Construction professionals (architects, fire safety consultants, etc)

Even before the BSA, negligent professionals who caused building safety defects could be pursued for the cost of remediation — but the BSA significantly widened the scope for such claims. One major change was extension of the limitation period for Defective Premises Act 1972 claims — from six years to 30 (for buildings completed prior to the BSA coming into force; 15 for those completed post-BSA). The BSA also extended the scope of DPA liability — it now applies not only to new construction but also to work on existing dwellings.

As a result, professionals are now facing a significant number of claims which, pre-BSA, would have been time-barred. These claims can present significant challenges in particular where paperwork and other evidence may not have been retained.

Landlords

The BSA created Building Remediation Orders (“BRO”s), allowing courts to order landlords to remediate safety defects, and (in most circumstances) preventing the cost being passed on to tenants.

The BSA also introduced Remediation Contribution Orders (“RCO”s), under which landlords (and developers) can be made to reimburse the cost of remedial works already undertaken.

Increasing numbers of BRO and RCO claims are now being made, and presenting new and complex issues for the parties and courts to grapple with.

Even where the BSA does not apply, the courts have shown willing to force landlords to remediate fire safety defects. In June this year the High Court dealt with Essendi v London Property Co, a case involving ACM cladding. The building was a hotel rather than housing, so the BSA did not apply. Nonetheless, the High Court ordered the landlord to remove and replace the unsafe cladding, basing this on covenants in the lease. The judge made clear that, ‘post-Grenfell’, an obligation to keep premises in good condition and legally compliant must be taken to include removing and replacing defective materials of this kind.

Developers and linked companies

Cost of remedying existing defects

Under government pressure, many developers signed the ‘Developer Remediation Contract’, committing to remedy safety defects in existing buildings.

Whether or not a developer signed up to the Contract, RCOs can be used to force them to pay for remedial works. The RCO provisions also pre-empt the problem of the developer not having the money to undertake the work: the BSA allows an RCO to be made against an ‘associated’ company in certain circumstances.

June saw an important decision on this issue, in the Hallings Wharf case. Remedial fire safety works had been undertaken to a block of flats, the circa £4 million cost funded by the Building Safety Fund (predecessor to the Cladding Safety Scheme). The government sought reimbursement, but the developer EDR had entered liquidation; as such an RCO was sought against Hollybrook, a company with links to EDR. The First-Tier Tribunal made an RCO against Hollybrook. It also rejected arguments on quantum, applying a low threshold for the reasonableness of such remedial work, and saying “the fact that it could have been done more cheaply is not of itself a basis for reducing the amount of an RCO”.

A new levy to fund future remedial works

Going forward, (nearly) all developers will have to contribute to a fund for future remedial works — from 1 October 2026 a Building Safety Levy will be applied to new residential developments (with some exceptions, such as for social housing), with a stated aim of building up a £3.4 billion fund.

Contractors and associated companies

Contractors can of course be held liable for defects in buildings they construct — but, as with developers, will not always have the money for remedial works (or may no longer even exist). The BSA widened the net, creating Building Liability Orders (“BLO”s), which allow an associated company to be held jointly liable alongside the contractor. Recent months have given some further indications of how the courts will deal with BLO claims.

In May, the scope of BLOs was given detailed analysis in Crest Nicholson v Ardmore & Others. Crest had engaged Ardmore to build a residential development. Post-Grenfell, Crest identified fire safety defects, commenced adjudication against Ardmore, and was awarded £15 million for remedial works. Ardmore entered administration, so Crest sought BLOs against companies linked to it. The court considered in detail a number of key issues, and made BLOs against those linked companies, making them liable for the full sum.

Manufacturers and associated companies (even ones overseas)

The BSA also created a new mechanism to pursue the manufacturers of unsafe building products — and again companies linked to them — and the first cases have been coming through.

In May, HB (WM) v Sto Limited & Others saw a group of developers attempting to recover £90 million spent on work to replace unsafe cladding. The product had been manufactured by an English company, Sto Ltd, which was by then in administration; as such, the developers sought BLOs against two Sto group companies based in Germany.

The German Sto companies disputed the English court’s jurisdiction and argued that BLOs cannot be made against foreign companies. The court rejected those arguments, and allowed the claim against the German companies to proceed.

In another case around the same time, Mulalley v Sto Ltd & Sto SE & Co KGaA saw Mulalley similarly seeking to claw back from a German Sto company its expenditure on replacing unsafe Sto Ltd cladding. The German Sto company failed to defend that claim, allowing Mulalley to obtain default judgment, and leaving the court to deal with only the level of damages. In its damages judgment, the court addressed some key points on the scope of such claims. It ordered the German Sto company to cover the lion’s share (87.5%) of the remedial costs.

Further reform is on the horizon: consultation on a white paper closed in May and is likely to lead to new legislation on how products are regulated, tested and certified.

The building safety regime so far, and the direction of travel

The new building safety regime remains very much a work in progress. There are still many challenges gaps, and uncertainties, and a balance to be struck - it is vital that buildings be safe for those who live in them, whilst the system needs to be clear and workable so that much-need homes can actually be built.

There will be major developments to come — from government in the form of new laws, guidance and schemes, and from the courts interpreting provisions and applying their findings to real-life cases — which parties can be expected to fight hard, given the sums at stake.

However, the regime is now very much in effect, and we can form a clearer picture of its real-world impact and the direction of travel. The Building Safety Regulator is fully up and running, overseeing construction of new higher-risk buildings and assessing existing ones — and adjusting its approach pragmatically. Guidance and procedure are being updated to ensure they remain fit for purpose and are workable, examples being the changes to Approved Document B and to PAS9980. The Cladding Safety Scheme continues to fund remediation of high-rise buildings — and has been expanded to low-rise (albeit a quite narrow and brief expansion). We are seeing the courts grappling with important details of the new law — and so far seeming willing to find ways to impose the cost of remedying dangerous buildings on the parties the government intended (and where necessary to cast the net wider, taking in group companies, and even if overseas).

Coming months and years will see further major developments. Time will tell where the regime settles, and how it strikes the balance between the vital aim of keeping people safe in their homes, without passing the cost on to the wrong parties or stifling the industry with excessive cost, bureaucracy and delay.