The Building Safety Act (2022) is a major amendment that is set to make homes across the UK safer by giving residents and homeowners more rights, powers, and protections. The tragedy of Grenfell prompted authorities to put in place new laws to prevent such catastrophes in the future. The result was the Building Safety Act (2022). The Act only applies to homes in England, but authorities across the country are working with devolved legislatures around the UK to see how the changes can be expanded. A major part of this act deals with new build warranties.
In this article, we look at how the Building Safety Act (2022) will affect new build warranties.
Which Changes Will be Made to New Build Warranties?
With the new legislation, new build warranties will run for 15 years instead of 10 years. This will be the new minimum period for new build warranties. The government is yet to specify the period of liability during which the developer will be directly responsible for fixing issues in the property. However, the statement on the government website implies that they intend to keep the builder accountable for longer.
Developers who fail to take out the 15-year new build warranty will have to pay a financial penalty of £10,000 or 10% of the sale value of the building. Developers who have a reasonable excuse for failing to take out the warranty may not have to pay this fine. It is worth noting that similar legislation will extend the retrospective liability from 6 years to 30 years.
It is also important to remember that these warranties aren’t just for newly built properties. Existing properties that have building work done to create a new dwelling will also have to be covered by a 15-year warranty prior to sale. For example, if you convert offices or large houses into flats, you will have to take out a new build warranty.
The Secretary of State will determine the minimum standards for what will be included in the warranty. The government chose to set the levels of coverage in regulations rather than in the proposed bill so that they can consult widely on the types of defects and costs. Since these details will be in regulations, they can be updated easily to reflect future changes.
The Secretary of State will also specify the parties that will benefit from the warranty. And they will need to provide the ability to transfer the benefits of the warranty. For example, if the building is sold during the warranty period, the benefits may be transferred to the new owner.
Why Are Building Safety Laws Being Changed?
The main reason for these changes is to provide a higher level of protection for buyers of houses by ensuring they are covered for at least 15 years. The bill also increases the redress options for homeowners and leaseholders. This way, they won’t have to pay for defects that they didn’t cause. Instead, the warranty provider will cover these costs.
The Building Safety Act also outlines measures to improve the way homes are built in the UK. For example, it has set requirements for the competence of key personnel in construction.
When Will These Changes Come into Effect?
The Building Safety Act was granted Royal Assent on 28 April 2022. The first parts of the act came into effect on 28 June 2022. From this date, homeowners and leaseholders will be able to make structural defect claims for pre-existing buildings up to 30 years after the completion of the building.
Developers of new build homes must provide buyers with a new homes warranty lasting for fifteen years; however, this requirement will come into force under secondary legislation, expected in the next twelve to eighteen months.
At the latest, all changes will come into effect in 2024.
Who Does the Building Safety Act Apply to?
The Building Safety Act applies to builders in England only, although it is likely that other regions will adopt the same changes soon. Since housing is a devolved matter, the devolved legislatures and administrations will have to make changes on their own. The act and its secondary legislation will apply to developers, architects, construction workers, and contractors.
What Should You Do to Prepare for the Building Safety Act?
The Building Safety Act will affect many across the construction sector, so it is necessary to take steps to prepare for it. Parts of the Act are already in force, but many secondary legislations are yet to be implemented. It is important to keep up with the changes so that you always stay compliant with the law. You should also review the current terms of your warranty to determine future compliance conditions. Homeowners also need to re-evaluate third-party contracts.
According to the Building Safety Act, high-risk buildings can only be occupied after they are registered with the Regulator. The act defines high-risk buildings as those that are at least 18 metres high. This height is measured from the ground to the floor of the highest occupied storey. Developers should also remember that they must start working on the project within 3 years after the Building Control approval.
The Building Safety Act has been debated for months, but it was finally given the Royal Assent on 28 April 2022. It will however still take a few months to be implemented. The Act is designed to protect homeowners and leaseholders. It requires insurance companies to provide new build warranties for at least 15 years. Previously, the minimum validity period for new build warranties was 10 years. Developers who fail to take out these warranties before selling their buildings will have to pay a fine of £10,000 or 10% of the sale value of the building (the greater value will apply). These changes are only being implemented in England, but other devolved legislatures are likely to pass similar legislation.