Building Safety Act protections for qualifying leaseholders

The leaseholder protections in the Building Safety Act came into force on 28 June 2022 and mean that, by law, qualifying leaseholders in England can no longer be charged for any costs related to the removal or remediation of cladding.

For non-cladding works, charges will be subject to 4 waterfall restrictions (developer test, contribution test, lease value and cap on service charges).

The Building Safety Act sets out that housing association and local authority landlords are exempt from requirements to demonstrate whether they have the means and wealth to pay for non-cladding costs. However, these costs will now be fixed at a cap of no more than £10,000 for leaseholders outside London, and £15,000 within London (referred to in this document as ‘the cap’). In addition, leaseholders with properties valued at less than £175,000 outside London and £325,000 inside London will be exempt from any costs.

For shared-owners, the cap is proportionate to their equity stake in the property. Sums paid towards interim fire measures, including waking watch costs, over the last five years will count towards the cap.

For more information, please visit the Government’s webpage which includes useful information about the protections and a FAQ. If you are a leaseholder in England, please visit this page to find out whether you will have to pay to replace cladding or to fix other safety problems with your building.

Please also visit the Leaseholder Advisory Service at https://www.lease-advice.org/.

What do you mean by ‘qualifying leaseholder’?

To be classed as a qualifying leaseholder, your property must be situated in a high-risk building (above 11 metres, or five storeys) which contains at least two dwellings, and on 14 February 2022.

  • the property was your main home
  • you owned no more than three UK residential properties in total
What happens if the property you own wasn’t your main home on 14 February 2022?

If you moved out and/or sub-let the property, you are still covered as a qualifying leaseholder if the other criteria above are met.

What work and costs do these protections apply to?

The leaseholder protections cover all work to fix a building safety risk, as defined in the Building Safety Act.

This means qualifying leaseholders will be protected from any defects relating to the construction or refurbishment of a building in the past 30 years that causes a risk to people’s safety from the spread of fire or the collapse of some or all of the building.

There is a distinction between remediation work to address defects and day-to-day services and repairs to keep your building safe. Your service charges will still include costs for day-to-day services and repairs.

If I meet the criteria as a qualifying leaseholder, who is liable to pay for building safety repairs on my building?

The Building Safety Act makes it clear that the developer, building owner/s and landlord/s are liable to pay to pay for building safety repairs. This is often referred to as the ‘funding waterfall’ in relation to who is liable for costs, whereby developers, building owners and landlords should be the first port of calls if:

  • they are either the developer, or they are linked to the development of a building with fire safety defects, or
  • they have net worth of over £2 million per affected building.

Please note that the net worth condition doesn’t apply to Registered Providers.

What happens if you are not a qualifying leaseholder?

Government advice states that non-qualifying leaseholders are protected from the costs of historical safety remediation if your building owner is - or is associated with - the developer who is responsible for that defect. Where this is not the case, you will be liable for remediation costs as per the terms of your lease - but the costs passed on to you cannot be increased to replace money that qualifying leaseholders are protected from paying.

Whenever we can, One Housing is pursuing original contractor as they are directly responsible for carrying out the defective work or providing a defective product, through our independent legal advisors.

Which developers have signed the contract to remediate unsafe buildings that they developed?

Government wrote to developers on 30 January 2023 asking them to sign a contract committing them to remediate unsafe buildings which they developed.

The full list of developers that have signed the contract is available here.

Housing associations have not been asked to sign the pledge. Unlike house builders, housing associations do not typically build their own homes – they purchase them from house builders, or commission them from contractors. One Housing supports the National Housing Federation call for the government to ensure contractors are also required to sign up to the pledge, so that all those responsible for the building safety crisis are taking responsibility for fixing it.

Will you continue to negotiate with the companies that built our homes?

The implementation of the Building Safety Act has resulted in a significant increase in the limitation period available for us to take action via this route from six years to 30 years for homes completed before 28 June 2022, or 15 years for homes completed after 28 June 2022.

We have sought legal advice on the Government’s contract and One Housing is not able to utilise the developer pledge to pursue some of the signatories as they have acted in a different capacity, that is as contractors rather than developers. This means that the developer pledge will not influence our timelines, however we will continue to seek to recover costs from those responsible for historical defects associated with the cladding by other means, including under the Defective Premises Act.

What happens to any future leaseholders if I sell my property?

The Building Safety Act 2022 automatically transfers to any future buyers of the property. This means that all new owners of a property that was eligible for the protections on 14 February 2022 will be covered, even if they bought it after that date.

Does this mean I no longer have to contribute towards any fire safety related work at my building?

There is a distinction between putting right cladding or other fire-safety defects that are related to the construction or refurbishment of a building, and more general day-to-day services and repairs to keep your building safe. Therefore, this means your service charges will still include costs for day-to-day services and repairs (and can include maintaining fire safety measures such as fire alarms, fire doors etc.).

Does this change the requirement for EWS1 forms?

Please also see our EWS1 FAQ page.

As of 9 January 2023, six high street banks have changed their lending requirements, with some no longer asking for EWS1 forms. Those are Barclays, HSBC, Lloyds Banking Group, Nationwide, NatWest and Santander. Each of the banks will require evidence that either:

  • The developer will self-remediate; or
  • The building is covered by one of the recognised Government schemes (the Developer Remediation Contracts, the Medium Rise Scheme, or the Building Safety Fund); or
  • The leaseholder is protected under the Building Safety Act, which can be evidenced by a deed of certificate.

Please note that individual lender eligibility criteria and lending policies will still apply.

More about the Leaseholder Deed of Certificate

You can find out more about the Deed of Certificate, including details of how to complete it, on the government website. You can also download a Deed of Certificate template from the same page.

If you send us a copy of the Deed, we will keep it on file. Please note that, although there is no requirement for us to provide you with confirmation that we have received a Deed, we will do our best to do so.

Your solicitor should be able to provide further advice on the Deed of Certificate and how you can use it to demonstrate to potential lenders that you are protected under the Building Safety Act from historical remediation charges.

My block is below 11m – what does this mean for me?

The Fire Safety Act 2021 brought into scope the requirement that the responsible person of a building of multiple occupancy requires a fire risk assessment of the external walls (FRAEW in accordance with PAS9980 guidance). The Fire Risk Assessment (FRA) will determine if your building needs a FRAEW. FRAs are required to be carried out by landlords to establish what they need to do to prevent fire and keep residents safe. The frequency of these depends on the risk factor for your building.

Government advice states that non-qualifying leaseholders are protected from the costs of historical safety remediation if your building owner is - or is associated with - the developer who is responsible for that defect. Where this is not the case, you will be liable for remediation costs as per the terms of your lease - but the costs passed on to you cannot be increased to replace money that qualifying leaseholders are protected from paying.

Whenever we can, One Housing is pursuing original contractor as they are directly responsible for carrying out the defective work or providing a defective product, through our independent legal advisors.

We will always seek external sources of funding to protect leaseholders such as Government grant funding and seek to recoup any remediation cost from the develop/contractor via legal negotiations.