Building Safety Act: Key Considerations for Contractors

Much commentary to date in relation to the Building Safety Act 2022 has considered how it applies to clients but it will also have a significant impact on contractors. The Building Safety Act introduced large scale change in relation to the building safety regime generally and to the design, construction, and occupation of high-risk residential buildings. As set out below, there are some key considerations for contractors, arising from the Building Safety Act which should be taken into account when engaged on projects of this nature.  Accordingly, it will be important that the risk and responsibilities in relation to these areas are clearly set out in construction contracts to which the Building Safety Act applies.

Limitation Periods

There has already been significant discussion about the new extended limitation periods under the Defective Premises Act 1972 (for claims in relation to a dwelling) and the implementation of section 38 of the Building Act 1984 (albeit this has not yet been enacted).  This new legislation extends certain limitation periods to 15 years for work carried out after the Building Safety Act came into force (28 June 2022) and 30 years for work carried out before that date (Note that there are some transitional provisions).  We are already seeing this new legislation being reflected in lengthier  contractual limitation periods and by way of warning, we would advise that contractors seek to avoid extending liability beyond the statutory position.  In addition, contractors should carry out a review of historic projects, in order to understand potential exposure to new claims as a result of these extended limitation periods.

Gateway Process

Contractors will need to become familiar with the requirements of the new gateway process and be aware of the delays that could flow from this new series of stop/go points.

Contractors will have limited involvement in gateway one as this applies at the planning application stage. However, gateways two and three will fundamentally change the procedure of the construction of a high-risk building and could cause significant delays, especially where building control approval under either gateway two or three is denied.

Gateway two makes it mandatory to have building control approval before building work can start. Whilst the overall responsibility for submitting a building control approval application will sit with the client, the client can delegate this action to the principal contractor. Therefore, contractors may need to understand how to submit a successful application to the new Building Safety Regulator. Secondary legislation[1] has been published which details the specific information a building control application must contain, for example the application must include; a detailed description of the proposed work including intended use, the number of residential flats and provisions for drainage, a plan; a competency declaration; a construction control plan; a change control plan; and a fire and emergency file.

Gateway three introduces another hard stop when the building work is completed, and prior to the building being granted approval for occupation.  At this stage, the applicant must apply for a certificate of completion, which will demonstrate that the building regulations have been complied with and that the building is safe to occupy. It is likely that clients will require that completion of the gateway three process occurs before practical completion.  It will therefore be important that the contractor’s entitlements to an extension of time and loss and expense are extended to include delays in gateway three (and two) approval for circumstances which are not under the Contractor’s control or at the Contractor’s risk. The regulator has up to 12 weeks to assess an application for a new high-risk building, so it will also become important that this period is built into the programme.

In addition, on application for a completion certificate, principal contractors will be required to provide a compliance declaration confirming that they have complied with their duties.  There is also a requirement for the client to confirm that to the best of the client’s knowledge, the higher-risk building complies with all applicable requirements of the building regulations.  As a result, we expect to see contractual requirements for contractors to provide compliance statements and statements confirming that the project complies with building regulations.  This will need to be managed carefully.

Duty holder regime

The new duty holder regime has now been finalised[2] and requires the appointment of a principal contractor on all projects to which the Building Regulations apply.  Contractors also have to comply with the duties of a contractor and to the extent applicable, the duties of a designer and principal designer. We will consider the duty holder regime further in another briefing note but some key points for contractors include:

1. Contractors are under a strict obligation to ensure that the building work they carry out is compliant with all relevant requirements (i.e. building regulations). Unlike the duty applicable to designers, this is not limited to taking “all reasonable steps” to ensure compliance.
2. Similarly, the Principal Contractor must plan, manage and monitor work and co-ordinate matters to ensure the building work complies with all relevant requirements, whereas the Principal Designer obligation refers to “all reasonable steps”.
3. Where a contractor (or designer) is carrying out only part of the works, they are under an obligation to consider ‘other work which directly relates to the building work’ and report any concerns as to compliance with the building regulations, to the Principal Contractor or Principal Designer. There is a risk that this obligation could open the door to a positive checking requirement by the Principal Contractor, on the work of others.

The Golden Thread

Contractors will need to be proactive in maintaining and contributing to the golden thread of information. To establish the thread, clients are required to make arrangements for an electronic facility which holds and maintains  the golden thread information, with access given to designers and sub-contractors.  The golden thread information must then be handed over on completion or the issue of the making good defects certificate

Contractors will need to take positive steps to contribute to the golden thread and provide (and obtain from subconsultants and subcontractors) information consistent with the format that is adopted on the specific project.  It is again likely that clients will require the golden information to be provided and complete prior to practical completion.

There are also related requirements for a system to be established and maintained throughout the construction phase to enable prompt reporting of every safety occurrence to the principal duty holders, with the principal contractor also required to ensure an appropriate frequency of inspections for safety occurrences throughout the construction phase.

Finally, the principal contractor is also required to create and maintain a log to record information in respect of changes to the project, with an explanation as to how the change complies with the Building Safety Act and Building Regulations.  Ultimately it may be necessary for the change to be notified or (if a major change) approved by the BSR which could cause further delays.

Competency

The focus on competency has increased. The principal contractor will be responsible for ensuring the competency of its sub-contractors and supply chain. Therefore, a more “belt and braces” approach to training, sub-consulting and subcontracting processes will be required, in order to positively evidence  competency as principal contractor, and the competency of its supply chain.

Construction products

The government has set up the National Construction Products Regulator to oversee a more effective construction products regulatory regime. Whilst this regulator is primarily focused on product manufacturers, contractors will need to keep a close eye on decisions of the regulator in respect of particular products and ensure that products discredited by the regulator are not procured and used on site.

Guidance which has now been withdrawn stated that the regulator would be able to enter, inspect and search premises and seize and retain products or evidence of non-compliance with construction product requirements. Whilst this guidance has been withdrawn it provides an indication of the powers likely to be granted to the regulator.

Key Considerations

The points mentioned above should be considered by contractors when negotiating new contracts, working on relevant existing projects and generally in respect of all projects.  For example, it will be important that the approach to the duty holder regime, the impact of the gateway regime and the approach to the golden thread, are clearly set out contractually.

Standard forms of contract have yet to be updated to reflect the Building Safety Act (the JCT intends to reflect this in the 2024 suite). Contractors should therefore request clarification as to how the Building Safety Act will impact any particular contract and consider preparing standard amendments to request in applicable contracts.

This is the latest in a series of updates on the Building Safety Act.  We will be providing further updates in due course.

[1] The Building (Higher-Risk Buildings Procedures) (England) Regulations 2023

[2] See the Building Regulations etc. (Amendment)(England) Regulations 2023