Draft Building Safety Bill sees new charge introduced for leaseholders

Under the new proposed rules on leaseholder payments there will be obligations on building owners to provide accurate estimates for building safety charges, with leaseholders able to refuse payment if the charges are deemed “unreasonable” or if the freeholder does not issue a clear breakdown of costs.
All the money raised through this charge must be held in a designated account with a relevant financial institution, and the funds must be held on trust to pay for the work. If a freeholder does not hold these funds in trust, they will be liable to prosecution by a local authority.
The changes come as thousands of leaseholders across the country face bills of up to £80,000 per flat for work to resolve fire safety issues on their buildings discovered following the Grenfell Tower fire. There have also been a number of complaints about the transparency of some of the fire safety bills that leaseholders have been issued with.

The new building safety charge for leaseholders will cover the costs of building safety work and the monitoring and management of day-to-day safety in the building.

It will also include charges for new measures brought in under the bill, such as the costs of a building safety manager, the costs of compliance with new statutory notices, and fees and charges payable the regulator.

According to the amendment, leaseholders must pay building owners within 28 days of the time the bill was issued.

The draft bill also says that the government is currently carrying out further work to explore appropriate funding models that would mitigate unaffordable costs for leaseholders, and that it will provide an update on these when the final bill is introduced in full.

The new rules around leaseholder obligations for building safety charges come alongside a raft of other measures introduced under the Fire Safety Bill.

Other changes include the creation of a Building Safety Regulator.

The new regulator will be responsible for implementing a new more stringent regulatory framework, which will include being able to enforce sanctions on poorly performing building inspectors.

Building owners will also now be required to register their building for a building assurance certificate with the regulator. These certificates will be needed for new and existing buildings and will be issued when the regulator is happy that a building owner is complying with new statutory obligations.

The Building Safety Regulator will be able to take enforcement action against those that do not comply.

These new enforcement powers include issuing compliance notices for buildings that have been found not to meet regulations, with the regulator able to set a specific date for the improvements to take place. It will also have the option of stop notices, which will require work to be stopped if serious non-compliance is found during the construction phase. Failure to comply with both of these notices could result in a two-year prison sentence or an unlimited fine.

One such requirement is for the accountable person or body for every building to appoint a building safety manager, who will support on the day-to-day management of safety risks on any building. Not having a building safety manager in place could mean that the accountable person – which could be a corporate body – is fined or jailed.

The draft bill will now have to go through the House of Commons and the House of Lords before being put into law after receiving royal assent.