The Department for Levelling Up, Housing and Communities (DLUHC) has provided a comprehensive update on progress to remedy the well-documented Building Safety Act 2021 issues facing leaseholders and conveyancers.
The DLUHC provided the update following conversations with key stakeholders and figureheads, namely Rob Hailstone, CEO, Bold Legal Group, and Stephen Desmond, legal trainer and author, specialist in residential leases, and non-practising solicitor.
“Ensuring leaseholders in impacted buildings can buy and sell freely is a key priority for the Department but we will only be successful if it is a joint endeavour between Government and industry,” said the DLUHC, who went on to provide some key takeaways from recent meetings:
- Part IV of the Building Safety Act. The new regulatory regime in Part IV of the Building Safety Act for high-rise buildings (18 metres/7 storeys +) should be viewed separately to the leaseholder protections in Part V of the Building Safety Act (which applies to buildings 11 meters/5 storeys +). Part IV responsibilities will come in to force in October 2023, placing specific responsibilities on Accountable Persons (APs) and Principal Accountable Persons (PAPs) to manage ongoing risk in higher-risk buildings. Part IV will be enforced by the new Building Safety Regulator.
- Building Safety Regulator (BSR). From April 2024, the BSR is expected to start to require PAPs for existing high-rise buildings to apply for Building Assessment Certificates (BAC) and the registration window has already opened. It will take five years for all existing buildings to apply for their first BAC. Further guidance will come out from the BSR in the months ahead about their programme of work which we will share with you. The register and BACs for buildings will be public.
- In regards to various concerns raised about the leaseholder protections in the Building Safety Act, which are already in force, we have noted them and are addressing them appropriately:
- Lease extensions/variations. We are looking to legislate, as soon as parliamentary time allows, to resolve the issue of retaining leaseholder protections where leases are extended or varied.
- Landlord Certificates. We will be using secondary legislation very soon to simplify the Landlord Certificate to make it easier for building owners to complete.
- Storage, digitisation, and completion of certificates. The Department noted issues around storage, digitisation and correct completion of Leaseholder Deeds of Certification and we will consider further.
- Islamic finance. The Department is exploring the issue of how the leaseholder protections interact with properties held under Islamic finance structures.
- Professional Indemnity Insurance (PII). We also noted concerns about PII cover for conveyancers undertaking instructions on impacted buildings, and we are engaging with the insurance industry. We would welcome ongoing feedback from you as firms seek to renew their cover.
- UK Finance (UKF) handbook. We are also fully aware of concerns about the wording of the UKF handbook, both Part I and Part II requirements of specific lenders. We are engaging intensively with UKF to ensure that their ongoing review on Part I has the necessary urgency and engages appropriately with conveyancers, and with individual lenders where issues have been raised.
- Transparency of costs. We also noted the issue of conveyancers needing more information upfront in order to be transparent with consumers about costs in dealing with transactions on impacted properties.
- Regulatory guidance. It is clear that further guidance for practitioners from regulators and professional associations would be helpful in increasing confidence, so we will continue to engage with relevant bodies to support this.
Stephen Desmond commented:
“After many frustrating hours of preparing very detailed submissions on the Building Safety Act and leaseholder protection regulations, I am delighted at the announcement that the regulations pertaining to Landlord Certificates will be simplified. While the devil will be in the detail, these amendments should go a long way to ending the current BSA-related leasehold conveyancing and lending crises.
I am also heartened by the Department’s commitment to ‘a joint endeavour between Government and industry’, as this recognises that future leasehold reforms can be a success if they are introduced in partnership with the conveyancing profession.
While other issues need to be addressed, e.g. in relation to Probate Sales and Shared Ownership
Leases, I am pleased that much-needed reforms are now around the corner.I also support Rob [Hailstone]’s idea of DLUHC setting up a dedicated generic email address for the conveyancing profession to share feedback and suggestions about the Building Safety Act.”
