Proposed Amendments to the Building Safety Bill

Further to our article Building Safety Bill: A new landscape for claims under the defective premises act 1972? in July 2021, various iterations of the Building Safety Bill (Amendment paper) are being submitted by the House of Commons Committee and we wanted to pick up and highlight two key issues the first which seeks to impose an even longer time period for actions to be brought under the Defective Premises Act 1972 and the Building Act 1984 and the second which is looking at implied terms being incorporated into residential contracts. We attach a copy of the most recent paper here.

Extended Limitation periods under the DPA and Building Act – There are two suggested amendments one to extent the time to 25 years and the other to extend it to 30 years. Very little justification is given for this proposed amendment other than to say that it changes the time period.

Implied terms – There is a proposed series of amendments to bring in Implied terms with a time period of 25 years to bring a claim for a breach of the proposed Implied Terms. The proposal appears to be for the Implied Terms to apply to all residential building and residential renovation projects. A “residential building contract” is defined as a contract made in the course of business involving work on or in connection with the construction of a residential unit (whether the dwelling is provided by the erection or by the conversion or enlargement of an existing building); and a “residential renovation contract” as a contract made in the course of business involving work on an existing residential unit, except where it is expected that, on completion of the work, it will have ceased to be a residential unit or will otherwise have ceased to exist.

The suggested Implied Terms to these contracts are set out in the paper but we set out some keys ones below which may concern designers as there appears to be a fitness for purpose clause as well as a reasonable skill and care clause and references to reasonable standards but no guidance as to what that may mean in practice.

Implied terms in residential building and residential renovation contracts

1. Every residential building contract is to be taken to contain terms that—
(a) the residential unit is fit for the purpose of ordinary residential occupation and is likely to remain so for a reasonable period if kept in appropriate repair;
(b) the residential unit in question is constructed in all material respects as described or stated on the approved plans;
(c) the residential unit is not subject to any building safety risk;
(d) the materials incorporated in the residential unit are as described in any approved plans;
(e) the materials incorporated in the residential unit are of satisfactory quality;
(f) the design of the residential unit is of a reasonable standard;
(g) the design of the residential unit is prepared with reasonable care and skill;
(h) all works in connection with the construction of the residential unit are executed with reasonable care and skill; and
(i) the residential unit complies in all material respects with all applicable statutory requirements and with all applicable building regulations in force as at the date of completion.

2. Every residential renovation contract is to be taken to contain terms that any renovation works—
(a) do not render the unit unfit for the purpose of ordinary residential occupation;
(b) do not create any building safety risk;
(c) do not involve the incorporation of materials in the residential unit which are not as described in any approved plans;
(d) do not involve the incorporation of materials in the residential unit which are not of satisfactory quality;
(e) are executed with reasonable care and skill; and
(f) do not render the residential unit materially non-compliant with any applicable statutory requirement or with any applicable requirement of building regulations in force as at the date of completion.

4. A residential unit is fit for the ordinary purpose of residential occupation if it would be regarded as such by a reasonable person and taking into account—
(a) the ordinary costs of repair and maintenance of that residential unit by reference to that unit’s location and specific characteristics;
(b) any marketing materials provided before the sale of the residential unit in question; and
(c) whether that unit was marketed, designed or intended to be occupied by any particular class of persons, whether by age, by gender or by physical or mental disability.

5. For the purposes of this section—
(a) a matter is material if it would be considered material if known or discovered by a reasonable purchaser of that residential unit before completing a purchase of that residential unit on ordinary commercial terms;
(b) a design is of a reasonable standard if a designer of average competence would have produced the same or a similar design;
(c) a material is of satisfactory quality if it would meet the requirements for satisfactory quality of goods under section 9 of the Consumer Rights Act 2015; and
(d) a material is as described if it would meet the requirements for description of goods under section 11 of the Consumer Rights Act 2015.

The member’s explanatory statement states: “This new clause strengthens consumer rights for future buyers by requiring houses and flats to be built, and renovated, to reasonable standards of quality in a way which is compliant in all material respects with the law and with building regulations.” There is a further proposed amendment for mandatory insurance in respect of the Implied terms.

Comment
It is not yet certain that these proposed amendments will make their way into the Act but the concerns that have been expressed in relation to the extension of time limits to 15 years will be exacerbated by the additional time periods proposed here including the practicalities around document retention, available and reliable witness evidence and solvency and continued existence of parties involved after such a long time. Further the Implied Terms may well make an already hardened market even tougher. They are also following a general theme of expanding the scope of the Act to more than just buildings over 18m which is something we have seen in the draft secondary legislation which will accompany the Act in due course.

Beale & Co has been hosting a number of roundtables and discussions on the Building Safety Bill as the Built environment prepares for this new legislation so please do not hesitate to contact us if this is something that would interest your organisation.