Here at SAY Property, we’re currently working with landlords and managing agents, to assist them in complying with the requirements of the Building Safety Act 2022 (BSA). In this article we share a few of the significant challenges being faced by the sector.
The Act itself is a huge piece of legislation, not only does it introduce radical changes to the way that building safety has to be approached for buildings in scope (i.e. buildings containing two or more residential units, over 18m or seven stories in height), but it additionally necessitates major changes in the way that property owners and managers have to operate.
The challenge is magnified by the time pressures imposed by the Act, namely that in-scope buildings need to be registered with the Building Safety Regulator by 30th September 2023 and Safety Case Reports need to be prepared by April 2024, as it is from then that buildings will start to be called in for assessment by the Building Safety Regulator.
We have developed a BSA template to assess gaps between where our clients are today and where they need to be to comply fully. Details of some of the key elements have been discussed below.
Understanding the identity of the Principle Accountable Person (PAP) and the Accountable Person (AP)
The Act places the obligations for compliance firmly on the PAP and the AP or AP’s. Where there are complex tenure arrangements e.g. headleases, RTM’s or common part obligations demised to ManCo’s, it can be challenging to establish which party holds which designation and consequently what their duties are under the Act.
The PAP and AP obligations cannot be delegated (despite many building owners looking to their managing agents to deliver compliance). Consequently, where we are working with managing agents, we are helping them to consider which of the BSA services they will deliver and what their fees are going to be (more on this later).
What registration and key building information is held
A major challenge currently is registering the buildings, this needs to have taken place by 30th September. The registration process itself is relatively straight forward requiring some basic building information, however following this (and again by 30th September), the Key Building Information (KBI) needs to be submitted to the Regulator. This is challenging as there are 39 questions, many of which are technical in nature e.g. what materials have been used in the construction of the external walls and what percentage of that type of material is on the building? Answering these questions will require either access to detailed construction information or specialist input.
It is this KBI that will help the Regulator understand risk and decide the order of buildings to call-in.
Procurement of a BSA IT solution
The Government is looking for those responsible for building safety to adopt digital solutions. There are several software packages available and it can be challenging to make a selection. Some of the key factors to consider include quality of the reporting functions and dashboard, integration with safety management systems, functionality around Golden Thread storage and Resident Engagement requirements.
It is important that time is invested in selecting the right package, as once in use, it is potentially very challenging to transfer to another provider.
Specialist Partners
As part of the Safety Case Report, it is necessary to hold a significant amount of information about each building, this historic Golden Thread information and a range of reports and surveys that help develop an understanding of the risks of an incident occurring and how the building is likely to perform in the event of a fire or structural failure. This due diligence will require fire risk assessments external wall (FRAEWs), intrusive fire stopping and compartmentation surveys along with enhanced FRAs.
Given that Safety Case Reports must be ready by April 2024 and there are estimated to be 12,500 buildings in scope, there is limited consultant capacity to undertake this investigative work or indeed to draft the reports. We are advising clients that if they haven’t already done so, they should commission this work as soon as possible.
Service Charges, Fees and Scope of Services
There is a significant cost associated with compliance, fortunately Schedule 8 of the Act allows for recovery of a wide range of related expenditure. These costs need to form a separate schedule within the service charge. Many of our clients are finding that there is work to do to implement these requirements, their property management systems need updating, new coding protocols need to be adopted for invoices and there remains the requirements to comply with the requirements of the Landlord and Tenant Act 1985, specifically in relation to reasonableness.
We are also helping managing agent clients to decide the scope of BSA services they are going to deliver, and to update their management agreements and to calculate the fees they are going to charge. Similarly, landlords are looking to recover their reasonably incurred costs.
What’s Next?
The above provides a brief sample of the range of issues that need to be addressed. Once we have scoped the gaps, we work with our clients to help them meet the compliance requirements. The challenge of complying both organisationally and on individual buildings should not be underestimated.
Charles Seifert FRICS is a Partner at SAY Property Consulting, he specialises in building safety, cladding remediation and service charge dispute resolution.
