CONSTRUCTION JOURNAL

Why you should prepare now for the Building Safety Act

While the Building Safety Bill is still likely to change before it is enacted in 2023, the construction industry needs to understand how the proposed regime will affect the procurement process

Author:

  • Christine Worthington

19 January 2022

Three professionals leaning over a building plan discussing the contents of the document

The Building Safety Bill, part of the legislative response to the Grenfell Tower fire in 2017, is set to introduce a new regulatory system. This will involve new administrative processes, reporting requirements, oversight and enforcement.

However, the real purpose of the legislation is to shift attitudes and change the behaviour of developers, freeholders and building managers, to ensure tangible, lasting improvements in residents' safety.

The proposed regime

As the Bill is still progressing through the UK parliament, the current requirements may still be revised. However, it makes sense to start planning now for its eventual implementation. The Building Safety Act is likely to come into effect by the end of next year, so any building project due for completion around then should proceed with this in mind.

In the first instance, the measures will apply only to higher-risk buildings, namely those at least 18m or seven storeys high, and which contain at least two residential units.

The Bill introduces requirements to submit safety information to the new building safety regulator, maintain a golden thread of such information throughout a building's life cycle, and appoint an accountable person and a building safety manger.

Developers will need to ensure that:

  • staff understand and comply with the new requirements and are competent to be dutyholders

  • suppliers provide compliant materials

  • software is in place to maintain and access the golden thread easily

  • clear and robust communication protocols are in place between the building safety regulator, the dutyholders, the design team, the suppliers, the contractors and the occupiers.

Through secondary legislation and amendments to the Building Act 1984, the Bill will establish three gateways during the design and construction of higher-risk buildings. These will require dutyholders to submit key information to the regulator at the following stages.

  • Planning: to ensure applicants have considered fire safety issues, planning applications for higher-risk buildings must include a fire statement.

  • Pre-construction: construction cannot begin on a higher-risk building until the regulator is satisfied that the planning proposals comply with the Building Regulations, and do not contain any unrealistic safety management expectations.

  • Completion: once a higher-risk building is constructed, the regulator will assess whether the work has been carried out in accordance with the Building Regulations, undertake final inspections of the completed work, and issue a certificate once approved. This gateway is, like gateway two, a hard stop: the regulator can only register the new building once it has satisfied all requirements. All golden thread documentation must also be handed over to the new building owner.

Author picture, Christine Worthington

Christine Worthington

Contracting under the new regime

It is likely that complying with the new system will affect the choice of construction procurement route.

Construction parties are used to dealing with gateways, such as those related to gaining planning permission. Introducing a stop–go process comes with programme risk and cost implications, however. Which procurement method will suit these best?

Under a traditional route, the client would appoint the design team to seek planning approval and pass gateways one and two. Once through gateway two, the client would appoint the contactor.

This would mean the contractor would not price in the risk or delays relating to gateways one or two, though, as it only has a role after they have been passed. So, the client would need to manage the programme tightly so it can be ready to build quickly after gateway two, and deal with the fact that the contractor will only confirm prices only at this stage.

Alternatively, a single-stage design-and-build contract would be possible, so long as there was a gateway process built into the contract. Typically, this would use a provision to issue a notice to proceed. It would set out that the design-and-build contractor works up to a certain stage and value but does not proceed beyond that unless given a notice to proceed by the client which notice would be given only when the agreed stage is reached, e.g gateway two is achieved.

The contract still needs to address what happens during the period that work is on hold, and the way this affects price and programme. It also needs to cover what happens in the event that the contract does not proceed to the next stage.

The two-stage design-and-build model, however – where the client appoints the contractor under a pre-construction services or an early works agreement before moving forward with a full design-and-build contract – would fit the proposed gateway process well.

The client would appoint the design team to take the design to gateway two. At the same time, the contractor would have an input into design and be confirming prices. Once gateway two approval is received and design and pricing are certain, the client can instruct the design-and-build contractor to move forward to construction.

While these procurement options focus on gateways one and two, developersalso need to understand and address the risks arising at gateway three. As the building cannot come into use until the regulator has issued a completion statement, this will have a substantial impact on the process, with close scrutiny from funders and tenants.

It seems inevitable that gateway three approval will become a condition for practical completion under a building contract. If so, contracts will need to address which party bears the risk of delay by the building safety regulator, and the effect of the gateway three certificate not being given.

'The two-stage design-and-build model ... would fit the proposed gateway process well.'

Further changes to the Bill

While further changes to the current Bill are expected, these are most likely to be around the more controversial elements of extension and retrospective periods of liability.

The current drafting proposes that anyone suffering damage due to a breach of the Defective Premises Act 1972 could bring a claim up to 15 years after completion. This would enable, for example, a tenant to claim for a home that is unfit for habitation and was built within the past 15 years. Given that this could apply retrospectively as far back as 2008, the construction industry and insurers are still seeking ways to protect themselves.

In terms of changes to the gateway process, it will be interesting to see whether the secondary legislation introduces more detailed requirements for the form of information applicants must submit, and whether the building safety regulator will be subject to set timeframes for responses to have been given to a gateway application. It will also help to understand whether the government intends to expand the rules to apply beyond higher-risk buildings.

But as the Building Safety Bill moves towards law, the industry as a whole needs to respond to the proposed changes – and begin to make the substantial cultural shift.

Christine Worthington is a partner at Cameron McKenna Nabarro Olswang

Contact Christine: Email

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