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The Fire Safety Act 2021 has received Royal Assent, which means that it has become law after a controversial passage through Parliament. The Act amends the Regulatory Reform (Fire Safety) Order 2005 and addresses concerns about the construction and materials used in residential buildings. The Act was made in contemplation of the tragedy of Grenfell Tower fire in 2017, in which 72 people lost their lives and many others were injured.
The Act amends the Regulatory Reform (Fire Safety) Order 2005 and clarifies that for any building which contains two or more sets of domestic premises, the provisions of the Fire Safety Order extend to the structure, external walls (“anything attached to the exterior of those walls (including balconies)”) and common parts of the building including front doors of residential areas.
This now means that they must be included in a fire risk assessment carried out by building owners or managers. Measures to remediate any fire risks will be required to protect occupiers of a building.
The Act does not say who should be responsible for the costs of such remediation works. This means that the leasehold owners of the properties could end up footing the bill for potential works through service charge provisions in their leases instead of the developers who constructed the buildings.
The House of Commons repeatedly rejected the Lords’ amendment to the Act, which would have stopped the cost of complying with the Act falling to leaseholders. Leaseholders, therefore, may be called upon to contribute towards the costs for expensive structural changes for fire compartmentation and the removal of unsafe cladding.
As the Bill was being debated, many leaseholders voiced their concerns at the lack of clarity as to who will be bearing the costs to remove dangerous cladding. Leaseholders have said that they feel let down by the Act in that they will be the ones who need to fork out to remove dangerous cladding. Additionally, they have said that they will struggle to sell or re-mortgage their properties, leaving them trapped in an unsafe building which are often uninsured.
The Building Safety Bill (the Bill) is currently making its way through Parliament, which may provide the answers to those concerned about the costs. This Bill proposes a new building safety regulator, and any building over six storeys requires an ‘accountable person’ to bear responsibility for fire safety at the building.
The government has pledged £5 billion to fund remedial works to buildings to remove unsafe cladding on buildings over 18 metres tall. However, campaigners believe that this does not go far enough. Those who live in properties under that height have been offered loans to fund the repairs. It is argued that shorter buildings are seen as less of a risk.
The government has also published its consultation on a new residential property developer tax. This is a tax that developers would pay on profits exceeding £25 million. The Treasury has stated that the tax will run for a decade from 2022 and will aim to raise £2 billion.