UK Fire Safety: Who's picking up the bill on cladding?

Hogan Lovells

Hogan Lovells

The Fire Safety Act 2021 received Royal Assent at the end of last week.  What the Act lacks in size (it’s only four sections long), it makes up for in the controversy it caused during its passage through Parliament.  Its origins lie in the response to the Grenfell Tower fire of 2017 and concerns about the construction of and materials used in residential buildings. Meanwhile,  the government has published its consultation on the new residential property developer tax, intended to help fund cladding remediation works.

What’s the big deal?

The Act amends the Regulatory Reform (Fire Safety) Order 2005.  Now,  where a building contains two or more sets of domestic premises, the provisions of the Fire Safety Order will extend to the structure, external walls (including doors, windows and balconies) and common parts of the building, as well as to all doors between the premises and the common parts.

Bringing these parts of a building within the scope of the Fire Safety Order means that they must be included in a fire risk assessment, and measures are needed to address the fire risk to protect occupiers of the building.
But the devil is, as always, in the detail.  The Act makes no mention of who is to bear the cost of potential remediation works to buildings to make them compliant with the new fire safety requirements.  Crucially, the House of Commons rejected a proposed amendment to the Act which would have stopped the cost of compliance falling to leaseholders.   Leaseholders could now face footing the bill for expensive structural changes including the removal of unsafe cladding. 

What’s next?

In 2018, the Independent Review of Building Regulations and Fire Safety, led by Dame Judith Hackitt, reported its findings in the wake of the Grenfell disaster.  The publication of the Building Safety Bill followed on from that report.  This Bill, in contrast to the Fire Safety Act 2021, is a weighty tome and sets out wide-ranging provisions in respect of building safety.  A new building safety regulator is proposed, and buildings over six storeys will need an “accountable person” to be responsible for fire safety at that building.

The Bill is slowly making its way through Parliament, and is not expected to come into force for a number of months yet.  However, as the Fire Safety Act 2021 remains silent on who bears the costs of ensuring fire safety, the industry is now focussed on how the Bill will answer that million dollar question. In the meantime, as we highlighted in our recent news piece,  the government has now published the consultation on the new residential property developer tax, intended to help fund cladding remediation works. 

The consultation seeks views on the proposed residential development tax to be introduced from April 2022.  The tax is designed to raise at least £2 billion over 10 years and will be levied on the largest residential developers from profits made from UK residential development.       

Make your views heard and respond before the closing date of 22 July. Here is a link to the consultation.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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