Technical Update - July 2020 - TPI Update

The month in brief

Welcome to the July issue of your Technical Update. This will be the final update in this format and there will be no issue in August. Instead, look out for the new IRPM Update which will drop into your inbox in an exciting new Flickbook design in early September.

Your new-look update will be more flexible and enable us to include more interactive content. We hope you will find the new layout more accessible and easier to read either at your desk or on-the-go across all your devices.

This month we have seen the advent of serious change in our sector. The Government has published its draft building safety bill, which we cover in detail in our Topic of the Month. The Law Commission has delivered its report on three key aspects of leasehold reform, and a new Fire Safety Order and a Code of Practice for property agents are both out for consultation.

Changes to the planning regime were announced in England and Scotland in July and in the PRS possession proceedings are due to restart in August. And in addition to all this, IRPM members are still navigating the many changes that are needed to bring us all back to work safely as lockdown is further eased.

We report on all this and more in this issue, so if you have a comment or an opinion to share, why not join the IRPM LinkedIn Forum and let us and your fellow property managers know about it. And if you have an idea for an article, please contact the Editor at [email protected]

IRPM News

CEO’s column | New IRPM Online Seminar 2020 is announced | IRPM calls for member views on Fire Safety Order | IRPM Online CPD training update | Property managers’ conference set for Easter 2021 | Third Tech Insight white paper published

Leasehold / block management

New agents’ Code of Practice out for consultation | New permitted development right for two-storey block extensions

PRS & BTR

Possession proceedings to restart in August | Consumer rights in the private rented sector

Social Housing

Housing Ombudsman publishes new Complaint Handling Code

Scotland and Wales

Consultation announced on Scottish Planning Policy

Health and safety

Guidance for block managers on safe use of pools and gyms | Operating and maintaining air conditioning systems | Gas safety during the coronavirus outbreak

Wellbeing

How to offer compassionate bereavement support | Managing a return to the office

Fire safety

Fire Safety reforms now out for consultation | Leaseholders face safety charges under proposed legislation | Tall buildings in England still not remediated | Revised guidance for building control consultation

What’s new in HR?

Coronavirus Job Retention Scheme | Are you eligible for a job retention bonus? | How to prepare for the end of the Brexit transition period?

Legislation

Law Commission reports on leasehold reforms | New laws aim to revitalise town centres

Spotlight on... Benjamin Hume

Legal update

Mark Loveday rounds up the latest case law

Talking points

Is your business at risk without a Lasting Power of Attorney? | Is 'build build build' really the best way forward for England's planning system?

Topic of the month

The draft Building Safety Bill explained

IRPM News

Back with a vengeance!

Andrew Bulmer talks us through a busy summer for the IRPM - and for our sector...

I hope you are well and finding some normality as we live and work safely. Opening up the country is proving trickier in some ways than going into lockdown, but also exciting, with new technology and ways of working that will benefit us for years to come.

IRPM Digital – improving your experience

This is probably the last ever IRPM Technical Update. All being well, the IRPM digital programme gathers pace and your vital update will return in around 5 weeks, in a new format with a new name – ‘IRPM Update’. Radical stuff! But today’s update has far more than just technical content, with news, comment and essentials from around the UK, so we’re dropping the T-word. The new format will make it much easier to find the content you are interested in and to read on mobile devices, anytime, anywhere.

IRPM exams are back!

When? This autumn. Where? Wherever you want. They’re online. Coronavirus has fast-tracked emerging technologies and IRPM is busy integrating OFQUAL-compliant online exam capability into our learning platform. We are mere weeks from shakedown testing and then we can throw open our virtual doors for you to progress your qualifications and career. We will announce dates later this summer when testing is nearing completion. Stand by for further news and get studying again!

The new leasehold Foundation Course is ‘Go for launch’ too. It follows the recently launched Build to Rent Foundation Course, responding to the RoPA call for safety, customer and ethics modules in addition to leasehold sector knowledge. Enjoyable, interactive learning online in bite-size pieces is the future. Look out for the opening date shortly.

Supporting you

The draft Building Safety Bill surfaced last week to a mixed response. See the IRPM same-day summary Law Commission reports, which herald the biggest changes to tenure in generations. This is big, once-in-a-career stuff. Five years from now, we’ll fix a steely gaze on some far distant horizon, strike a pose of authoritative wisdom and grittily declare to tomorrow’s new professionals “Yes, I was there when it all happened”. Long way to go yet though, and IRPM will be there with you, and for you, the whole journey.

Influencing on your behalf

The Building Safety Bill has issues. Generally thought of as a ‘good thing’, it needs work. Government have been frank, in confirming it is very much a draft and are in listening mode. We have already had our first meeting with MHCLG to start ironing out issues. I can say this much; coal-face civil servants genuinely do understand just how complex this is and know the risk of unintended consequences is high. They will be working with IRPM and consulting widely across our industry over this summer, getting right down into the detail. They say two heads are better than one and 5,000 IRPM professional minds collectively really do know it all. Your expert opinion really does matter, so please, please feed back into consultations. For example, the early Covid ‘travel for work’ form, that went right round industry, was inspired by one IRPM member who got in touch. We are currently seeking your input on the Consultation Fire Safety Order, further detail can be found here.

Announcing the new IRPM Online Seminar 2020!!

Save the date: 21 October 212020! IRPM Annual Seminars are legendary, but with so much news to give you, we are moving online for 2020. I’m not going to give the game away just yet, but I can promise you this will be a punchy, fast-paced and enjoyable day of distilled essentials. Our Online Seminar is FREE to IRPM Members. Those who purchased our 2020 Annual Seminar tickets are automatically booked onto our Online Seminar and your tickets are secured for the 2021 Annual Seminar.

IRPM 2021 Annual Seminar is also on!

Back at the QEII in their very biggest hall on 11 May 2021. Far too early for details yet but stay tuned.

Andrew Bulmer is CEO of the IRPM

New IRPM Online Seminar 2020 is announced

We are sorry to announce that we are postponing our market-leading Annual Seminar from 23 September 2020 to 11 May 2021. Despite the easing of lockdown our venue, the QEII Centre in Westminster, is only able to operate at 10% capacity because of social distancing rules. This restriction means we are unable to safely hold our event this year. Instead, we are delighted to announce the new IRPM online seminar, taking place on 21 October 2020. Anyone who has confirmed their tickets for next year will receive automatic entry to the online event so they will not need to take any action.

Our online event will run from a live studio in Central London and can be joined throughout the day from all mobile devices, laptops and desktops. IRPM members will receive FREE entry to the online seminar, which will include break-out sessions, headline speakers and a plethora of critical information delivered in the comfort of your own home.

IRPM Annual Seminars are the best in the business, renowned for swift, punchy, forward-looking sessions on industry changes, latest trends and essential need-to-knows. The IRPM Online Seminar 2020 will take that further, challenging the yawn of traditional conferences and taking advantage of the new format to deliver the very best content at speed, direct to you. The rapidly changing policy landscape means 11 May next year is just too long to wait for us to convene the principal figures and lead on those vital issues and debates.

Further details of the programme and joining instructions will be sent during the build-up to the event. We look forward to welcoming you all to the first IRPM Online Seminar and if you have any questions please email [email protected].

Find out more here

IRPM calls for member views on new Fire Safety Order

In July, the Government launched its consultation on proposals to strengthen the Fire Safety Order, implement Grenfell Tower Inquiry recommendations and strengthen the regulatory framework for how building control bodies consult with Fire and Rescue Authorities.

The fire safety consultation, published alongside the draft Building Safety Bill, is a key part of government’s package of reforms to improve building and fire safety and to deliver the key recommendations from the Grenfell Tower Inquiry.

The proposed changes clarify how the Fire Safety Order applies to different elements of a building and they will make a very significant difference to the way property managers work. So it is very important that IRPM members consider the implications of the changes. Responding has been made very easy, as the consultation sets out the issues and then asks a series of questions, seeking your views.

The fire safety consultation contains proposals to:

strengthen the Regulatory Reform (Fire Safety) Order 2005 and improve compliance.
implement the Grenfell Tower Inquiry Phase 1 Report recommendations that require a change in law to place new requirements on building owners or managers of multi-occupied residential buildings, mostly high-rise buildings.
strengthen the regulatory framework for how building control bodies consult with Fire and Rescue Authorities and the handover of fire safety information.

The consultation closes at 11:45pm on 12 October 2020 and the IRPM will be responding on behalf of members – but we need your input.

Make sure your voice is heard on this very important piece of safety policy and send us your responses in Word format by Wednesday 30 September 2020 to [email protected]

To read more on the proposed reforms to the Fire Safety Order, scroll down to Fire Safety. You can find a full package of documents to support the consultation on the MHCLG website here.

IRPM Online CPD Training Update

We all experience intense periods of stress, where it feels as if everything is getting on top of us. Work begins encroaching into our home lives – working just a couple of extra hours in the evenings turns into working weekends, just to feel we’ve got everything covered…

Slowly, things begin to feel they are too much; emotionally, physically, mentally. You start feeling overwhelmed. Drained. You can’t meet with the constant onslaught of demands. Over time, you realise somewhere down the line, you’ve lost that initial spark of passion; your interest and motivation have gone.

These aren’t just signs of stress; these can be warnings that you are on the path towards burnout.

IRPM is committed to supporting our members, and in our series on Health and Wellbeing we are delighted to release a free online CPD library module: Health and Wellbeing - Avoid Burning Out 1.0.

Click and look at this and many other wellbeing courses we have for you.

Our new releases for the month are crucial in the current climate:

•    Health and Wellbeing - Avoid Burning Out 1.0
•    Business Report Writing Skills 1.0
•    Complaint Handling 2.0
•    Become an Effective Leader, Part Two

Property Managers conference set for Easter 2021

Organisers of the Toolkit for Property Managers conference to be held at the University of Oxford’s St Hugh’s College have announced a new date for the event. The conference, originally scheduled for March this year will now be held from April 9-11 2021 with a full programme of more than 40 different sessions available for attendees.

A limited number of places remain for the conference. It is also an opportunity for attendees to undertake an intensive programme of study to achieve their IRPM Associate (level 3) or Member (level 4) qualification, culminating in an exam at St Hugh’s.

Due to government guidance around the Coronavirus outbreak, organisers PM Legal and the IRPM will continue to update delegates. “Cancelling exams is something that the IRPM would never want to do, however these are extraordinary times and this measure is a necessary step in the country’s efforts to stop the spread of coronavirus,” says Andrew Bulmer, CEO of the IRPM.

“Our priority now is to ensure no property manager faces a barrier when it comes to moving onto the next stage of their career and we expect to announce new arrangements for IRPM exams very soon," he says.

For more details visit pmls.co.uk

Third Tech Insight white paper published

In July, the IRPM published the third part of its 2020 Tech Insight programme. Data ethics: plotting a roadmap for the new frontier is a white paper focusing on the challenges now being faced by residential property managers and the wider property sector, as we seek to harness the benefits of digital technology to add value to service delivery and the customer experience.

The IRPM brought together a group of leading industry experts to discuss the ways in which data is now being used in residential buildings and the ethical questions this raises for the property profession. The white paper captures this conversation, highlighting the myriad challenges now being faced and sets out next steps for the property management profession.

Commenting on the launch of the white paper Andrew Bulmer, CEO of the IRPM said: “We are sleep walking into a data abuse crisis that could seriously damage trust between property managers and residents. The same data that will underpin great customer service and Dame Judith’s Golden Thread is also a fantastic resource to be mined and monetised by the unscrupulous. Managers and software firms need to collaborate right now, so that people’s data is not used against them, with property managers the unwitting accomplices.”

All of the white papers in this series are available to view under the News tab on the IRPM website. The final white paper, which considers the issues raised by customer service in the digital age, will be published on 4 August.

Leasehold/block management

New Code of Practice now out for consultation

A proposed Code of Practice for property agents is now out for consultation. Block managers have until midnight on 4 September to read the draft code and register their response.

The draft code is based on 14 recommendations made by Lord Best in his Regulation of Property Agents report published last year. It sets out a set of principles that underpin the standards of professionalism expected of residential property agents and applies to anyone working in property sales in England and to letting agents and property managers. The new regulatory regime, once in place, will also cover auctioneers and property guardians as well as those working in international property sales.

The code, once finalised, will sit above new sector-specific codes for agents working in particular markets such as leasehold, retirement housing and build-to-rent. In future, a serious failure to meet the new standards could mean regulatory action being taken against an agency and/or its staff.

This consultation is very important for property managers and will have a major impact on the way the sector operates in future. To read the full consultation paper and to have your say click here.

New PD right to extend low-rise blocks

The Government has introduced a new permitted development (PD) right, allowing the construction of up to two additional storeys on top of existing, purpose-built blocks of flats. These extensions will automatically be given planning permission via a streamlined application process. The new PD right comes into effect on 1 August 2020.

However developers must satisfy a number of criteria to meet the requirements of the new PD Right. These are that:

the existing building must be a purpose-built block of residential flats;
the building must have been built between 1 July 1948 and 5 March 2018; and
the new storeys must comprise flats.

The new PD right will not apply to mixed-use developments, even if only a small proportion of the building is used as office space or if there are retail units on the ground floor.

There are height restrictions limiting the new PD Right and listed buildings and blocks within 3 km of an aerodrome cannot be extended. In addition, there must be adequate natural light in all habitable rooms of the proposed new flats and floorplans showing the dimensions of each additional room must be provided with the prior approval application. This stipulation aims to address the problems of poorly designed homes that have been built under existing PD rights.

However, the new PD right has come under attack from leaseholder groups such as the Leasehold Knowledge Partnership and the National Leasehold Campaign. Labour leader Keir Starmer has raised a motion to annul this new statutory instrument on the basis that one of the unintended consequences will be to increase the value of blocks for freeholders, while raising the cost of enfranchisement for existing leaseholders.

PRS & BTR

Possession proceedings to restart in August

The Ministry of Housing Communities and Local Government (MHCLG) has confirmed that possession proceedings for landlords in the PRS will resume from 24 August.

Responding to a Parliamentary question, Lord Greenhalgh said: “Work is under way with the judiciary, legal representatives and the advice sector on arrangements, including new rules, to ensure that judges have all the information necessary to make just decisions and that the most vulnerable tenants can get the help they need when possession cases resume.”

As part of this work, landlords will be encouraged wherever possible, not to pursue non-priority cases through the courts. Priority cases include those involving anti-social behaviour, extreme rent arrears, domestic abuse, cases involving squatters, fraud or unlawful subletting.

The other rule changes that have been agreed are that:

The court will have flexibility on setting the date for the court hearing to allow it to fix a date either on or after the claim form is issued to the landlord. (Currently a hearing date is set at the same time as the claim form is issued.)
The requirement to fix a hearing 8 weeks after the claim form is issued to landlords will be suspended.
Landlords will need to provide a rent arrears history in advance of the hearing (rather than providing at the hearing itself).
High Court bailiffs will be required to provide notice of the eviction date to the tenant, in the same way that notice is provided by county court bailiffs. The notice will include information on how the tenant can apply to suspend the eviction and where to go to for advice.

In order to ensure that tenants in rent arrears will not be forced out of their home as soon as the eviction ban is lifted the Government has pledged to develop a pre-action protocol that will to encourage landlords to negotiate repayment plans before taking court action. Landlords and tenants will also be urged to consider mediation, in which an independent third-party assists those involved to reach a mutually acceptable agreement to resolve their dispute, without the matter needing to go to court.

However, Inside Housing reported in July that charities have warned that this is not enough. They fear a potential spike in evictions when the ban is lifted. Tenant groups are calling on the government to make changes to the law, giving judges more discretion to decide whether to grant possession when a tenant has suffered financial hardship due to the crisis.

In Wales, the Government has temporarily increased the notice period landlords must provide from three months to six months to end Assured and Assured Shorthold Tenancies.

Commenting on the change, which has been criticised by landlord groups, Housing Minister Julie James said: “The effect will to be to further delay evictions during the ongoing public health emergency; fewer people will face eviction into homelessness at a time when local authorities are less able to respond to these situations; those renting their homes will benefit from increased security and reduced anxiety; and individuals at risk of eviction will be provided with increased time to seek support to resolve any problems.”

Consumer rights in the private rented sector

A new report, titled Consumer rights in the private rented sector, looking at the problems being faced by tenants in the private rented sector was published by the Smith Institute in July.

The report’s lead author was Lewis Shand Smith, who was Chief Executive and Chief Ombudsman of Ombudsman Services from 2009 until 2018, and is a past Chair of the Ombudsman Association.

One in four families with children in this country now rent from a private landlord. One in four of the homes let in the private rented sector is classed as ‘non-decent’ by the Government, and tenants collectively pay over £10 billion in rent to live in these sub-standard homes. Meanwhile, rents have risen faster than incomes for too many, and 1.7 million renters now pay more than a third of their income in rent, while the insecurity of private renting means eviction has become one of the most common ways of people becoming homeless.

The report looks at ways to improve the private rental market by recognising the consumer rights that tenants are used to having in other markets, from utilities to financial services, and looking at how those lessons could be applied to the private rented sector.

Proposals for change
With the right framework for raising standards, the report’s authors believe there is an opportunity to create a modern, data-driven approach to giving people greater protection and more power as consumers in the rental market and identifying bad landlords who flout the rules so that:

private renters with fewer options have access to homes that they can be confident will be safe, secure and affordable;
private landlords have greater clarity about their obligations;
where landlords or tenants are not fulfilling their obligations, these breaches are identified and regulation is enforced; and
private renters have easy, free access to a redress scheme when things go wrong.

The report recommends that Government takes steps to protect and empower renters, and allows them to enforce their consumer rights.

Proposals include:

establishing a new Private Rented Sector Regulator with its primary aim being to ensure “consumers are treated fairly” - the Regulator would oversee compliance with standards, supporting local authorities in their enforcement role, and ensure both tenants’ and landlords’ voices are heard;
introducing a new open-ended Private Residential Tenancy, including removing no-fault evictions and increase notice periods for longer term tenants;
reforming redress and dispute resolution by introducing mandatory membership of the Housing Ombudsman Service for private rented sector landlords and lettings agents;
establishing an independent Private Renters Panel to represent interests of renters and engage with Government and the new Regulator on policy development;
requiring all landlords to provide better information for tenants, setting out terms of the tenancy, information about the property, information about the landlord and responsibilities of tenants and landlords; and
how to access redress through the ombudsman service in the event of a dispute.

The authors believe that key to all of these proposals, is that they are developed in partnership; co-designed by landlords, tenants, local authorities and advice agencies. However, the report recognises that many unanswered questions remain. It asks what is the best way to fund new or expanded bodies; how will monitoring and enforcement be achieved; what is the role of local authorities; and how can we best use existing structures?

The report concludes that the PRS will remain a vital component of the housing market. Therefore, the authors believe the same consumer rights, protections and support which are the bedrock of other consumer markets which provide essential services should also be introduced into the PRS.

Copies of the report can be obtained

Social Housing

Housing Ombudsman publishes new Complaint Handling Code

The Housing Ombudsman has published a new Complaint Handling Code that aims to help landlords resolve complaints quickly and use the outcomes from best practice to drive service improvements.

The new code uses a broad definition of “complaint”, which is now described as “an expression of dissatisfaction… about the standard of services, actions or lack of action by the organisation”. The word “complaint” need not be used before issues are tackled.

The Code sets out good practice in a number of important areas:

Universal definition of a complaint.
Providing easy access to the complaints procedure and ensuring residents are aware of it, including their right to access the Housing Ombudsman Service.
The structure of the complaints procedure – only two stages necessary and clear timeframes set out for responses.
Ensuring fairness in complaint handling with a resident-focused process.
Taking action to put things right and appropriate remedies.
Creating a positive complaint handling culture through continuous learning and improvement.
Demonstrating learning in Annual Reports.

Landlords must self-assess their complaints procedures against the Code by 31 December this year and publish the results. Non-compliance could result in the Ombudsman issuing complaint handling failure orders. Guidance on these new orders has also been published and can be downloaded here.

Scotland and Wales

Scottish Government consults on planning

The Scottish Government has launched a consultation on proposed changes to aspects of Scottish Planning Policy which are particularly relevant to proposed residential developments.

The headline proposal is to remove the presumption in favour of development that contributes to sustainable development, which was introduced in 2014 and has been the subject of extensive debate.

The changes set out in the consultation propose that the presumption becomes a significant material consideration where relevant development plan policies are out-of-date, the plan does not contain relevant policies or the plan is more than five years old. It also provides that policies for the supply of housing land will not be considered up-to-date where there is a shortfall in the 5-year effective housing land supply.

The consultation paper can be accessed here and the deadline for responses is 9 October 2020.

Health and safety

Guidance for block managers on safe use of pools and gyms

Indoor gyms, swimming pools and sports facilities were able to reopen from 25 July. Guidance from the Department for Digital, Culture, Media and Sport includes advice for providers on cleaning, social distancing, and protection for staff to help them get leisure spaces back up and running safely.

If you manage blocks that include gyms, pools or other exercise facilities, here are the key points to be aware of as you begin your reopening plans and communicate the changes to your residents:

Ensure an appropriate number of people are in a swimming pool at any one time.
Space out equipment or take some out of service to maintain social distancing.
Enhance cleaning routines and provide hand sanitiser throughout leisure spaces.
Consider how the way people walk through leisure spaces could be adjusted to reduce contact, with queue management or one-way systems.
Ensure adequate ventilation.
Consider using outdoor spaces for individual, team or group activities, making sure to comply with the latest restrictions on public gatherings.
Residents should be encouraged to shower and change at home wherever possible although changing rooms, where they exist, can still be made available.

You can read the full guidance here

Safe operation of air conditioning systems

As lockdown restrictions ease and employers bring their staff back into the workplace, the Health and Safety Executive (HSE) has produced a useful set of guidance to ensure the safe operation and maintenance of air conditioning systems.

The HSE has said the risk of Covid-19 spreading via air conditioning systems is low and so it is not advising against using most types of air conditioning systems. However, it does recommend that centralised ventilation systems which remove and re-circulate air to different rooms are reconfigured to avoid recirculation of air between spaces, rooms or zones occupied by different people.

Instead the recirculation function should be disabled, and fresh air used by opening doors and windows where possible should be used instead. Air conditioning systems which mix some extracted air with a fresh air supply do not need adjusting. The HSE guidance reminds employers that they have a legal duty to ensure an adequate supply of fresh air in the workplace and this obligation remains unchanged in light of COVID-19.

Gas safety during the coronavirus outbreak

The HSE has produced guidance for landlords, registered gas engineers and clinically vulnerable tenants during the coronavirus outbreak.

Landlords have a legal duty to repair and maintain gas pipework, flues and appliances, do annual gas safety checks and keep a record of each safety check. But the HSE accepts that carrying out these checks during the pandemic, for example because of tenants who are self-isolating, may be difficult.

Therefore landlords should assess the balance of the risk to the safety of the household and the public presented by the gas system with the risk to tenants’ health from coronavirus.

To read the guidance in full click here

Wellbeing

How to offer compassionate bereavement support

COVID-19 has highlighted the need for employers to provide a compassionate approach to bereavement support, not just for Covid cases but more generally. Suffering the loss of a family member, partner or friend can be devastating, and it’s important to realise each person will react differently to their experiences.

A flexible and sensitive response to bereavement is key, so the CIPD has produced a new guide to compassionate bereavement support. The guide offers practical guidance for both employers and line managers on properly supporting grieving employees, developing supportive cultures and policies, and more.

A legal right to paid bereavement leave for working parents who lose a child under the age of 18, has recently been established by Jack’s Law. In an open letter to the Business Secretary, Alok Sharma, the CIPD has recently called on the Government to introduce the right to bereavement leave and pay to all employees experiencing the loss of a close family member.

Click here for the guide.

Managing a return to the office

While government advice is now to ‘return to work if you can’ many people are concerned about the prospect of a return to the workplace. Commuting remains a source of anxiety and working from home or an increased adoption of flexible working may also now be preferred.

However, organisations must continue to plan and prepare for a safe return to the workplace and so the CIPD advises employers to ensure they can meet three key tests before bringing people back to work:

Is it essential? Where employees can work from home they should continue to do so until effective safety measures and clear employee guidance and consultation is in place.
Is it sufficiently safe? People’s health and safety is paramount, and any return should be gradual to test measures can work for larger numbers.
Is it mutually agreed? Clear dialogue between employers and employees is vital in ensuring concerns can be raised and individual needs considered.

For more information and guidance from the CIPD, click here.

Fire safety

Fire safety reforms now out for consultation

The fire safety consultation, published in July alongside the draft Building Safety Bill, is a key part of the Government’s package of reform to improve building and fire safety in England. It is also part of its stated commitment to deliver on the key recommendations from the Grenfell Tower Inquiry.

The consultation contains proposals to:

strengthen the Regulatory Reform (Fire Safety) Order 2005 and improve compliance;
implement the Grenfell Tower Inquiry Phase 1 Report recommendations that require a change in law to place new requirements on building owners or managers of multi-occupied residential buildings, mostly high rise buildings; and
strengthen the regulatory framework for how building control bodies consult with Fire and Rescue Authorities and the handover of fire safety information

A full package of documents to support the consultation has been published, which you can download here:

The Regulatory Reform (Fire Safety) Order 2005 call for evidence: summary of responses

Read the full consultation here.

Leaseholders face safety charges under proposed legislation

Leaseholders living in blocks over 6 storeys / 18m will have to pay a new building safety charge separate to their service charge bills, if draft legislation published in July passes into law.

The government’s new draft Building Safety Bill, includes new arrangements for the charge to be levied separately to service charges, to make costs “readily identifiable and accounted for”. This will involve holding funds in a separate trust account and invoicing and accounting for them independently of the main service charge account. IRPM has already raised the additional administrative burden of this arrangement and will confirm the precise banking arrangements required in due course.

Building owners will be required to consult with leaseholders on estimates for building safety works in a manner akin to Section 20 of the Landlord and Tenant Act 1985, with leaseholders able to challenge charges they consider “unreasonable”. Section 19 geeks may spot that section 19 Pt2 is missing, potentially removing the right to challenge the reason for the charge but merely its reasonableness under Pt1.

The new building safety charge will cover the cost of any building safety work that is needed in relation to fire and structural safety, as well as the costs of employing a building safety manager, and any fees and charges payable to the new regulator. Other H&S matters such as slips and trips, lighting of dark pathways, etc. are to remain in the main service charge account. Thus, two different headings for H&S will appear on two different invoices to the leaseholder - a possible source of confusion. While much of the cost recovery provisions are modelled on existing service charge provisions under the 1985 Act, a key difference is that charges must be paid within 28 days of a bill being issued.

There is a lot of detail in the new bill and while we can see the thread of logic behind much of it, it is very clear that the bill is not yet in its finished form. Hence IRPM are asking its 5,000 professionals to dig into the draft bill and stress test it for the real world, then send concerns to Andrew Bulmer at IRPM.

Tall buildings in England still not remediated

Only six additional buildings where ACM cladding has been removed due to safety concerns, have been remediated since May. Monthly data shows that work had fully completed on 158 of 455 affected buildings by the end of June. A further 51 high rise buildings have had cladding removed but projects to replace it have not yet been completed.

According to Inside Housing, 78 social housing blocks have completed remediation; 67 have started and 10 are yet to begin. In the private sector, 29 have completed, 70 have started work and 107 are yet to begin.

Revised guidance for building control consultation

Revised procedural guidance on the way in which building control bodies consult with fire and rescue services on plans for building work has been issued. The guidance also covers the arrangements for the handover of fire safety information. A circular letter from the Director of the Building Safety Programme at the Ministry of Housing, Communities and Local Government (MHCLG) draws attention to the changes.

The revised guidance clarifies the procedural steps that building control bodies should take to ensure effective consultation, based on the existing legislative requirements, which are unchanged. Building control bodies should follow this guidance as good practice.

Article 45 of the Regulatory Reform (Fire Safety Order) 2005 (‘the Fire Safety Order’) and Regulation 12 of the Building (Approved Inspector) Regulations 2010 (as amended) set out requirements respectively for local authorities and Approved Inspectors to consult the enforcing authority under the Fire Safety Order on plans for building work.

Regulation 38 of the Building Regulations 2010 (as amended) sets requirements for the handover of fire safety information by the person undertaking the work to the Responsible Person under the Fire Safety Order.

The guidance, published by Local Authority Building Control (LABC), with the National Fire Chiefs Council (NFCC) and the Association of Consultant Approved Inspectors (ACAI) and in conjunction with the Joint Regulators Group, can now be found on the LABC website here:

What’s new in HR?

Coronavirus Job Retention Scheme

If your business is using the Coronavirus Job Retention Scheme (CJRS) here is a reminder of the key dates you will need to be aware of and the actions you might need to take.

31 July - submit your CJRS claim for periods ending on or before 30‌‌‌ ‌June 2020. This is the last date you can make those claims. You need to have made a claim at any point on or before 31‌‌‌ ‌July to be able to make a claim for future months.
1‌‌‌ ‌August 2020 – from this date the scheme will no longer fund employers’ National Insurance (NI) and pension contributions for furloughed employees. You will have to make these payments from your own resources.
1‌‌‌ ‌September 2020 – from this date you will have to start contributing to the wages of your furloughed employees. Grants will be for 70% of usual wages in September and 60% in October, but furloughed employees will continue to be entitled to receive at least 80% of their usual wages. You will have to make up the difference from your own resources.

Live webinars offering more support on changes to the scheme, and how they impact you, are available to book online – go to GOV‌‌‌‌.UK and search 'help and support if your business is affected by coronavirus'.

Are you eligible for a Job Retention Bonus

This is a one-off payment of £1,000 to employers that have used the Coronavirus Job Retention Scheme (CJRS) for each furloughed employee who remains continuously employed until 31‌‌‌ ‌January 2021. The bonus will provide additional support to retain employees.

To be eligible, employees will need to:

earn at least £520 per month (above the Lower Earnings Limit) on average for November, December and January
have been furloughed by you at any point and legitimately claimed for under the Coronavirus Job Retention Scheme
have been continuously employed by you up until at least 31‌‌‌ ‌January 2021.

Employers will be able to claim the bonus from February 2021 once accurate RTI data to 31‌‌‌ ‌January has been received. More information about this scheme will be available by 31‌‌‌ ‌July and full guidance will be published in the autumn.

How to prepare for the end of the Brexit transition period

XPertHR has produced a useful guide to help employers navigate the new working arrangements that they may need to put in place from 2021. You will need to subscribe to the website for full access to the article – but even without a subscription, the bullet points act as a useful aide memoire for employers.

All employers should be aware that a transition period is now in place until 31 December 2020, and during this period the right of free movement for UK nationals and EEA nationals in the UK will continue.
Carry out an audit of the workforce to establish which employees are EEA nationals in the UK or British nationals in the EEA.
Understand the settlement scheme for EEA nationals in the UK and the process for applying for settled or pre-settled status.
Consider the position of employees on international commuters in relation to qualification for settled status.
Monitor the introduction of schemes for UK nationals working in the EEA to obtain the equivalent of settled status.
Understand the Government's proposals for a new UK immigration regime and how this will impact the organisation at the end of the transition period.
Consider the position of business travellers from 1 January 2021 and start to track employees' travel.
Identify potential skills gaps and labour shortages and plan how to address these.
Communicate with the workforce on the potential impact of Brexit and support available to employees.
Consider providing assistance with applications for settled and pre-settled status, and the equivalent applications for UK nationals in the EEA.

To subscribe to XPertHR or to sign up for a limited number of free downloads, click here.

Legislation

Law Commission reports on Leasehold reform

The Law Commission has published three reports recommending reforms to leasehold enfranchisement, the right to manage and commonhold. If the recommendations set out in the report are accepted by the Government, leaseholders would be given sweeping new rights over their homes. Existing leaseholders would be able to buy their freeholds and convert to commonhold – and it will be cheaper to do so. The Government will need to decide whether commonhold is made compulsory, incentivised, or optional. The right to buy the freehold (including converting to commonhold) will become significantly less expensive.

The recommendations and reforms set out by the Government fall into two categories: Owners of future homes and owners of existing homes. For owners of future homes, houses will always be sold on a freehold basis – because Government intends to ban the sale of houses on a leasehold basis (subject to certain exceptions).

If the Government takes the decision to ban leasehold tenure for new developments, in future all flats will be sold solely on a commonhold basis. However, if it is decided to incentivise commonhold rather than placing an outright ban on leasehold, flats could be sold on either basis. The Government intends to restrict ground rents to zero and so even if homes are sold on a leasehold basis, they will come with no obligation to pay ground rent.

A zero ground rent regime means that, if flats continue to be sold on a leasehold basis, it will be significantly cheaper for leaseholders to extend the lease of their flat because restricting ground rents to zero, the options set out for reducing enfranchisement prices, and the Law Commission recommendations to reform the process, will all limit the amount that leaseholders have to pay. The proposals will also make it significantly cheaper for leaseholders (with their neighbours) to buy the freehold of their block and if they wanted to, leaseholders would then be able to convert to commonhold.

In future, with commonhold as a viable option, the Law Commission considers it far less likely that leaseholders will want or need to exercise the right to manage (which involves taking over the management of a block but not buying the freehold) because the cost of buying the freehold will be a lot cheaper than it is now.

On existing homes, the Law Commission points out that while there can be an ambition for freehold to become the basis of home ownership in the future, it is crucial to recognise that leasehold will continue to exist for some time. So for those leaseholders, various problems that have been raised in recent years must be resolved. These include being given the right to buy the freehold or extend their lease, and in the case of flats, to convert to commonhold and to take on the management of their block.

The Law Commission believes that its recommendations on enfranchisement and the right to manage will considerably improve the position of existing leaseholders, and any future leaseholders, in a number of respects. In particular:

a lease extension will result in a lease being extended by 990 years at a peppercorn rent, so that the need to extend a lease only arises once and no ground rent is payable;
more leaseholders will be able collectively to purchase the freehold of their block or take over the management of the block because leaseholders cannot currently do so if more than 25% of the block is commercial property, and it is recommended that the threshold is raised to 50%;
it will be possible to purchase the freehold or take over the management of multiple buildings (for example, in an estate);
the process for making an enfranchisement or right to manage claim will be easier, quicker, and cheaper, with procedural traps removed;
leaseholders making an enfranchisement or right to manage claim will no longer have to pay their landlord’s costs (in the case of enfranchisement, if Government sets enfranchisement prices at market value); and
leaseholders making an enfranchisement claim will be better able to convert from leasehold to commonhold, if they wish to do so.

In addition, the options for reducing enfranchisement prices set out in the Law Commissions Valuation Report published in January, would reduce the amount that leaseholders have to pay to buy the freehold or extend their lease

Responding to the proposed reforms, the Association of Leasehold Enfranchisement Practitioners (ALEP) which helped provide technical feedback to the Law Commission, described the report as “welcome reading to the entire sector”.

ALEP director Mark Chick said: “The reports set out some radical changes which would cause profound implications to current leasehold enfranchisement systems – of course, the decision is ultimately in the Government’s hands, but today’s recommendations set out viable ways to shape reform. We are also very pleased to see that the Law Commission has taken on board a number of the suggestions ALEP has been making for many years.”

Notably, the leasehold enfranchisement report recommends the abolition of the two-year ownership requirement. ALEP welcomes the simplification of this system. “Abandoning this policy will create a fairer system for all and allow leasehold enfranchisement claims to take place more quickly and efficiently. It will give leaseholders the flexibility of being able to carry out an enfranchisement claim as soon as they acquire their lease, rather than having to wait for two years as per current legislation,” said Mark.

National Leasehold Campaign founder Katie Kendrick is also very supportive of the proposed reforms. “The NLC is delighted that the Law Commission’s reports recognise how badly the current leasehold system is stacked against leaseholders and is recommending adoption of commonhold not only as a viable alternative but the preferred tenure,” she told the IRPM.

Katie believes the Law Commission report marks a significant milestone for leaseholders. "If the proposals are adopted it would transform home ownership in England & Wales and bring us in line with the rest of the world. The detailed report on Commonhold is designed to ensure Commonhold does work, and therefore we will no longer need Leasehold. Whilst we appreciate this is going to take time to achieve, ultimately, we welcome this sunset clause on leasehold," she said.

In the meantime, the Law Commission’s reports regarding RTM and Enfranchisement are also progressive as they aim to empower leaseholders to take control of the management of their homes. They include a proposal for mixed use blocks is the removal of the arbitrary 25% rule. This will empower a significant number of leaseholders to regain control.

To read all three reports in full, click here

New laws aim to revitalise town centres

New laws put before Parliament in July aim to help deliver new homes and revive town centres across England. Housing Secretary Robert Jenrick announced the new rules, which will come into effect by September and will mean full planning applications will not be needed to demolish and rebuild unused buildings. The aim is to make it quicker and easier to convert commercial and retail properties, providing more space for homes and helping high streets adapt fast to what consumers and businesses need.

Homeowners will also be able to add up to 2 additional storeys to create new homes or more living space for growing families through a fast track approval process, but still with a requirement to carefully consider the impact on neighbours and the appearance of the extension.

The intention is to reduce pressure to build on greenfield sites and deliver more homes that fit the character of local areas, without the red tape.

Click here for more information

Spotlight on… Benjamin Hume

In this new regular feature, we talk to Ben about his approach to property management and get an insight into his business in Hampshire.

In the last couple of months, Benjamin Hume has become a familiar face. His LinkedIn vlog, in which he talks openly and honestly about personal wellbeing, has been watched many more times than he expected, and he recently featured in one of our IRPM Chats.

Having worked in retail sales, a bank call-centre and a letting agency prior to becoming a property manager, Ben has developed excellent inter-personal skills. His ability to communicate effectively with both clients and residents, plus his capacity for problem-solving while working for a regional block management firm, led him to the conclusion that he should set up his own company.

In 2017, he established Evolve Block Management based in Ringwood. He now employs four members of staff and the business has grown rapidly. With just three blocks on the books four years ago, Ben and his team now manage 60 blocks between them. The company operates along the south coast corridor, with clients in Hampshire, Wiltshire and Dorset, and Evolve has recently opened new offices in Southampton and Poole.

Ben has worked hard to find staff who understand the people management aspect of the property manager’s role, which he believes is crucial to the success of any block management business. “Working with clients can be a psychological tug of war,” says Ben, “understanding why people react the way they do to certain situations and tailoring your response to them in order to resolve the situation is vital. Most professional property managers have excellent technical skills but the key to being a great managing agent is to problem solve the people, not the building!”

Establishing and running his own property management business hasn’t always been plain sailing for Ben and he realised he was taking the stresses of the job home with him. The Covid-19 pandemic and the need for Ben’s whole team to work remotely during lockdown have made him think hard about the importance of wellbeing at work. Ben decided to share his thoughts with his peers on LinkedIn and was amazed by the response his first vlog received. “I got messages from lots of other property managers who told me they were really glad to hear someone talking about the way they were feeling too,” he says. The vlog also struck a chord with the management team at the IRPM and we asked Ben to share his thoughts in the IRPM chat on wellbeing which you can listen to by clicking on this link. Ben is now planning to make his vlog a regular feature.

So what are Ben’s top tips for promoting wellbeing? Here are some of the small changes he has made to his working life that have made a big difference to his stress levels and the way he interacts with other people:

Get organised – It is really important to set aside time for routine tasks that can get pushed aside ans then come back to bite you! No one should be afraid to ask their line manager for protected time to deal with aspects of the job such as major works planning, rather than simply firefighting when something crops up.
Don’t take your work home with you – this is easier said than done but try to leave work at the door. Our job can be emotionally draining so leave that baggage behind if you can and do something at the end of the day to take your head right out of work. Go to the gym, take the dog for a walk – anything that helps you relax.
Punctuate the day – don’t work through your lunch hour but take a break – even if it’s only for half an hour. And if it’s all getting too much, go for a walk round the block to clear your head.

During lockdown, Ben made sure he checked in with his staff via video conference every day, to keep them engaged with the business and make sure they “didn’t feel forgotten”. He also made socially-distanced welfare visits to his team’s homes, “because sometimes you need to see someone face-to-face to really check that they are ok. Zoom is great but it’s not the same as personal contact” he says.

In our next issue we’ll be talking to Ben again as we discuss wellbeing in more detail. In the meantime, you can watch his vlogs on LinkedIn. To join the group, just follow the link and select ‘request to join’.

Legal Update

A roundup of cases has not appeared in this column since April. Undoubtedly the most important case for property managers during the lockdown is the long-awaited decision in Duval, writes Mark Loveday.

Duval v 11-13 Randolph Crescent Ltd [2020] UKSC 18, Supreme Court, 6 May 2020.

In this landmark case, the leaseholder of a basement flat (W) sought a licence to remove part of a load bearing wall. Clause 2.6 of her lease was a qualified covenant not to make alterations without the consent of her landlord (L). Clause 2.7 was an absolute covenant against cutting into and roof wall or ceiling. W accepted the work would be in breach of Clause 2.7. L was minded to consent to the work, but another leaseholder (D) objected.

D argued that if L allowed the works, this would breach a “mutual enforceability” covenant in D’s own lease. This provided that L would enforce the covenants in the leases of other flats in the block (upon being indemnified by D as to its costs). D also claimed there was an implied term that L would not put it out of its power to enforce Clause 2.7 by licencing what was otherwise a breach.

What was the decision of the court?

The Supreme Court, like the Court of Appeal before it, agreed with D. Although L’s obligation under the mutual enforceability clause was contingent, it is well-established that there was a further implied obligation that L would not prevent the contingency from occurring. It was “uncommercial and incoherent” to say that this provision should be deprived of practical effect by L allowing a lessee to carry out work before another lessee could make a request and provide the necessary security.

Why is this case important for property managers?

The case has wide implications. Managing agents are frequently involved in advising landlords about requests by leaseholders for consent to carry out works in their properties. Mutual enforceability covenants are standard in modern leases and many of the covenants they relate to are framed in absolute terms. In particular, they frequently include an absolute ban on structural alterations. As a result of Duval, landlords cannot grant licences which permit something which is otherwise a breach of covenant and leaseholders have much wider scope to object to works by their neighbours. It does not necessarily just apply to works. There may be an absolute covenant against sub-letting or keeping pets. Moreover, there is no reason (in principle) why it only applies to absolute covenants – if for example, a tenant seeks retrospective consent to works already completed.

Other must-read cases

Triplerose Ltd v Beattie [2020] UKUT 180 (LC), 4 Jun 2020.

The lessees of a flat breached a covenant restricting use to a “private dwelling” when they made it available for short-term occupation via the Airbnb and Booking.com websites (see Nemcova v Fairfield Rents). But they did not breach a covenant prohibiting the carrying on of a trade or business “upon the property”.

Fivaz v Marlborough Knightsbridge Management [2020] UKUT 0138 (LC). A lessee covenanted not to remove the landlord’s fixtures without consent. It was not a breach of this covenant to replace the entrance door to the flat, since the door was not a landlord’s fixture.

Aster Communities v Chapman [2020] UKUT 177 (LC). The landlord applied for dispensation from consultation requirements under s.20ZA Landlord and Tenant Act 1985. The First-tier Tribunal has a wide discretion to impose conditions on giving consent (see Daejan v Benson). These could properly extend to requiring the landlord to pay the lessees’ reasonable costs of instructing an expert to comment on the appropriateness of the works.

Cookson v Assethold Ltd [2020] UKUT 0115 (LC). A was the landlord, C was the lessee. The UTLC held that nothing was owed by C to A for balancing charges at year end because the “18-month rule” under s.20B Landlord and Tenant Act 1985 applied. A prior interim service charge demand was not a sufficient notice under s.20B (2).

Mark Loveday is a leading Barrister with Tanfield Chambers specialising in leasehold management and enfranchisement work

Talking point

Is your businesses at risk without a lasting power of attorney?

Sarah Nash explains the benefits of LPAs for business owners

Most people understand the benefits of a lasting power of attorney (LPA), which allows an individual to nominate someone to take decisions on their behalf, if they become incapacitated in some way.

Less well known is the ability to put an LPA in place for a business. This makes a lot of sense in the current health crisis, when the sudden illness of a business owner could have serious ramifications for the company and its workforce.

A sensible precaution

As a business owner, if you become unable to make decisions for any reason, it could severely impact a vast number of people and ultimately the fate of your whole operation.

The benefits of having an LPA in place for your business are clear; every person your business encounters could benefit from you having a trusted individual nominated to keep things running.

So why are LPAs for businesses so uncommon? Lack of awareness seems to be a key reason, with many business owners simply unaware this is an option.

Some people fear that even a temporary period of mental incapacity may lead to them permanently losing control of their business interests. Others are content that in circumstances where capacity is lost, the Court of Protection will appoint a deputy, although this process can take several months.

On the other hand, putting a business LPA in place ensures that a person you know and trust will take the reins immediately, and can begin to deal with the usual running of the business.

Make the arrangements now

A business LPA can be straightforward to organise. A Form LPF1 must be completed and signed by a witness, the chosen attorney and a ‘certificate provider’. The form is then registered with the Office of the Public Guardian (OPG).

At time of writing the fee for registering a business LPA is £82. If you arrange a personal LPA alongside a business LPA, then your personal LPA should stipulate that it does not cover your business affairs.

The choice of attorney to be appointed requires a lot of careful consideration. It is therefore important to consult an experienced team of legal advisors, who will offer support in making this decision, and the factors to consider.

Sarah Nash is an Associate Director and the head of Ansons’ Wills, Probate and Trusts team.

Is 'build build build' really the best way forward for England's planning system?

Alister Scott takes a closer look at the most recent proposals to change the UK's planning system.

“Rip up planning red tape to spur house building,” says housing secretary Robert Jenrick, while Prime Minister Boris Johnson argues for a radical shake-up to the planning system to deliver on his “build build build” mantra. There’s a clear political message that England’s planning system is broken and needs change.

Such change should not be based on simply building more, but on an accurate diagnosis of the problems the planning system is experiencing and trying to solve. If it isn’t, there is a risk of a future prime minister saying again that the planning system is broken and in need of urgent reform.

After all, David Cameron in 2011 attacked the planning system as “the enemy of enterprise” and similarly embarked on a package of reforms to speed up housing delivery and economic growth and cut red tape. Yet consistently over 80% of planning applications are approved, challenging any simplistic presumptions that planning inhibits growth.

Political change has been a constant in England’s planning system. Since the landmark 1947 Town and Country Planning Act, some 360 pieces of planning legislation have been enacted. What’s more, since 1997 there have been 18 housing ministers, hindering policy consistency.

Managing change has been made more difficult with significant cuts to planning departments under austerity, compounded by incremental legislative changes that create the very complexity and delays that the government now complains about.

Today, calls for reform have been fuelled by a report by the right-wing thinktank Policy Exchange. With the country needing to build many more houses, the argument goes that replacing our plan-led system that assesses every application with a zoning system would reduce bureaucracy and help speed up decision-making.

There have already been some moves in this direction, with enterprise zones and brownfield “permission in principle” orders. Permitted development rights have enabled the government to fast-track more commercial-to-residential developments and housing extensions. Boris Johnson has just announced further loosening of the rules on converting other commercial establishments, shops and redundant premises into homes.

But these changes have already been criticised due to the growth of poor quality houses and flats with no windows, isolated from key services and infrastructure. Such homes would never have been given approval in the regular planning system, and also conflict with other policy considerations such as those of the advisory Building Better, Building Beautiful Commission.

Diagnosing the planning challenges

“Build build build” is the wrong starting point. Planning is dominated by a target of building 300,000 homes each year, and the prime minister’s rhetoric reinforces that narrative. But one simple quantity metric on housing is dangerous and limiting when planning encompasses so much more.

The planning system should instead be designed to address the long-term challenges and opportunities our society faces. And that means a more integrated quality-based approach based on a shared vision of the kind of places we want to live in. Let’s identify these challenges in more detail:

There is a housing challenge. Plenty of luxury flats are built but not enough affordable family homes. The key national priorities do not match the types of housing now being built and wanted by developers.
There is a climate challenge. We are not doing anything like enough to meet the 1.5? Paris target, with 3? or more of warming now more likely. The planning system needs to have strong policies that help the transition to a greener lower carbon future with higher priority given to retrofitting of existing housing stock.
There is a biodiversity challenge. The state of UK nature is declining year on year with many species on the brink of extinction. Biodiversity forms the backbone of viable ecosystems on which we depend on for basic necessities, security and health. This diversity makes us more resilient to change and uncertainty in much the same way as investing in a diverse range of stocks protects a financial portfolio from uncertainty.
There is a health challenge. Poor housing stock and noise and air pollution, along with a lack of access to key services, all affect physical and mental health.
There is a poverty and social justice challenge. The gap between the haves and have-nots is widening. Here child poverty is a major issue. The planning system was founded on the need for improved social justice, yet in recent years this has been conspicuously absent from policy.
There is a public engagement challenge. Ordinary people should be able to understand and engage with planning more effectively and help co-produce the kinds of sustainable places they want to live, work and play in. The current system is too complex and too adversarial. A key opportunity is for the public to be more involved in planning processes which should be based on modern interactive “e-planning” and not dense and static PDF files.

These challenges are all interlinked and collectively should form the key principles on which a better and more joined-up planning system should be built. However, what that planning system looks like is not for me or anyone to dictate in a top-down fashion. We urgently need better diagnoses of these challenges and integrated interventions, so that then we can then design better governance and delivery frameworks that are less complex and fragmented.

I fear that the government will continue on its present trajectory, based on the populist but fallacious presumption that planning is restricting housebuilding, and impose yet more change on a public sector ill-equipped to deal with it. In effect, the country lurches from one crisis to another. And that is definitely not good planning.

Alister Scott is Professor of Environmental Geography and an expert in urban planning and infrastructure at Northumbria University. This article was originally published by The Conversation.

Topic of the month

The draft Building Safety Bill explained

In July a draft Building Safety bill was published. The 334-page bill follows on from the government response to Dame Judith Hackitt’s independent review ‘Building a safer future’ which was commissioned following the Grenfell Tower fire in 2017. Here, we take a closer look at the detail.

The draft bill includes details of how a new building safety system will work in practice. It outlines the changes needed for the new legislation to work alongside existing laws including the Building Act 1984. The draft legislation also includes major changes to the powers of local authority building control departments and private approved inspectors to regulate high rise residential buildings.

The Bill will introduce a new era of accountability, making it clear where the responsibility for managing safety risks lies throughout the design, construction and occupation of buildings in scope, presently considered to be 18m or six storeys upwards in height. The bill is in five main sections:

Part 1 – introduction

Part 2 – provisions about the regulator and higher-risk building definition

Part 3 – amends the Building Act 1984, providing for the regulator to be the building control authority in relation to higher risk buildings

Part 4 – about occupied higher-risk buildings, and imposes duties on accountable persons and building safety managers

Part 5 – supplemental provisions including a new homes ombudsman scheme

Which buildings does this apply to?

“Higher-risk building” means a building of a prescribed description. This will be prescribed under regulations set by the Secretary of State after appropriate consultation. The bill is therefore silent on 18m or 6 storeys, though MHCLG’s press release does state those heights, at least for the present.

Which risks does this apply to?

“Building safety risk” means a risk to the safety of persons in or about a building arising from the occurrence as regards the building of any of the following:

fire
structural failure
any other prescribed matter.

The regulator may make a recommendation to prescribe a matter under section only if it considers that if the matter occurred in a higher-risk building it would have the potential to cause a major incident.

Higher risk buildings, be they leasehold blocks or build to rent, must be registered by the accountable person with the new regulator and the regulator must publish a list of registered buildings.

Who will be the regulator?

On the new regulator, MHCLG said

"Central to ensuring the regime is effective will be a powerful new Building Safety Regulator housed within the Health and Safety Executive. It will have responsibility for implementing and enforcing the more stringent regime for higher-risk buildings and will oversee the safety and performance of all buildings… …The new Building Safety Regulator will work closely with industry to drive a change in culture that prioritises residents and ensures their safety."

The regulator’s objectives are

(a) securing the safety of people in or about buildings in relation to risks arising from buildings, and

(b) improving the standard of buildings.

The regulator must provide such assistance and encouragement to residents, accountable persons and duty holders as it considers appropriate with a view to facilitating their securing the safety of people in or about higher-risk buildings.

Who is the 'accountable person'?

The accountable person for a higher-risk building is

a person who holds a legal estate in possession in any part of the common parts, or
a person who is under a relevant repairing obligation in relation to any part of the common parts.

The latter seems likely to include managing agents who are written into tri-partite leases. Build-to-rent operators and agents must also look to their obligations under contract to establish any responsibilities under this bill.

The accountable person can be an individual or a body corporate.

Liability of officers of body corporate

Where an offence under Part 2 or 4 is committed by a body corporate,

is committed with the consent or connivance of any director, manager, secretary or other similar officer of the body corporate, or any person who was purporting to act in any such capacity, or
is attributable to any neglect on the part of any such person

that person as well as the body corporate commits the offence and is liable to be proceeded against and punished accordingly.

This piercing of the corporate veil will place serious obligations not just on professional landlords and managers but also on individual leaseholders who are officers of a management company that owns the freehold/head leasehold or holds repairing obligations as per the definition of accountable person. We have long expressed concerns over resident directors being reluctant to stand as an officer and become liable for the accountable person role.

Duties of the accountable person

The accountable person for an occupied higher-risk building must make an application for a building assurance certificate in relation to the building.

The application must be accompanied by

a copy of the most recent safety case report for the building
prescribed information about the mandatory occurrence reporting system operated by the accountable person
prescribed information demonstrating compliance by the accountable person with their duties
a copy of the residents’ engagement strategy.

What is the safety case?

A safety case is the accountable person’s assessment of the building safety risks relating to the building, plus any steps that have been taken in relation to those risks.

The accountable person for an occupied higher-risk building must assess the building safety risks relating to the building. Further assessments must be carried out at regular intervals, if the current assessment is no longer valid, or at the direction of the regulator.

The accountable person must take all reasonable steps for the following purposes

preventing a major incident occurring as a result of a building safety risk materialising
reducing the severity of the incident

Those steps may involve the accountable person carrying out works to any part of the building promptly. The regulator may direct the accountable person to take specified steps within a specified period.

The accountable person for a higher-risk building must keep copies of prescribed documents in accordance with prescribed standards. Where an accountable person does not hold a copy of a prescribed document, they must obtain it except where it is not practicable to do so.

Residents’ Engagement Strategy

The accountable person for an occupied higher-risk building must prepare a “residents’ engagement strategy” and a copy must be given to every flat owner and resident aged 16 or over. The Secretary of State will make a regulation on the way information can be provided.

The duty to give a copy of the strategy to a resident does not apply if the accountable person is not aware of the resident and has taken all reasonable steps to make themselves aware of residents of the building. The strategy will include

information that will be provided to relevant persons about decisions relating to the management of the building
the aspects of those decisions that the accountable person will consult relevant persons about
the arrangements for obtaining and taking account of the views of relevant persons
how the appropriateness of the accountable person’s methods for promoting participation will be measured and kept under review

The accountable person for an occupied higher-risk building must establish a system for the investigation of relevant complaints. The building safety manager for the building must operate the complaints system and may have to refer some complaints to the regulator.

Appointment of building safety manager

The accountable person for a higher-risk building must, before the building becomes occupied, appoint a person to be the building safety manager for the building.

The building safety manager must manage the building in accordance with the safety case report for the building.

The BSM may be an individual or a this could be a corporate role. The accountable person must be satisfied that the BSM has the skills, knowledge, experience and behaviours to carry out the functions of a building safety manager. Where the BSM is not an individual, the accountable person is satisfied of the person’s capability to perform the functions of a building safety manager, and the BSM must appoint an individual acting under its control to be the nominated individual for the building.

Duties on residents

A resident of an occupied higher-risk building aged 16 or over

must keep in repair and proper working order any relevant resident’s item (any electrical or gas installation or appliance that is in the dwelling in which the resident resides or is controlled by a resident of the dwelling)
must take reasonable care to avoid damaging any relevant safety item (an item that is in, or forms part of, the common parts and is intended to improve the safety of persons in or about the building
must comply with a request, made by the accountable person for the building, for information reasonably required

Where it appears to the accountable person for an occupied higher-risk building that a resident has contravened their duty, the accountable person may give the relevant person a notice and apply to the court.

The county court may make an order requiring a resident to provide specified information, do or stop doing a specified thing, by a specified time.

Access to dwellings

The county court may, on an application made by the accountable person, make an order for access to a flat if satisfied that:

a request in writing for entry to the premises at a reasonable time has been made to the resident,
entry to the premises has not been given
it is necessary to make the order to enable the accountable person to carry out their duties.

An order would require the resident to allow the accountable person, or a person authorised by the accountable person, to enter the premises at a reasonable time on a specified date or within a specified period.

Recovery of safety related costs

A substantial new section is to be added to the L&TA85, after section 17. The new sections, 17A to 17X apply to long leasehold dwellings in higher risk buildings, adding ‘implied building safety terms’ to a lease.

The terms require

a landlord who is the accountable person to carry out those duties or to co-operate with the accountable person if someone else.
a leaseholder to pay the landlord any ‘building safety charges’, to allow the landlord access for building safety measures and to carry out the duties of a resident under the Act.

Building Safety Charges (for leasehold blocks)

Extensive provisions enable recovery of the building safety costs from leaseholders, who will be obliged to pay within 28 days. These costs seem to sit outside leasehold existing service charge provisions (and commonhold contributions) and may simply be contractual costs under the lease. This would make a difference to the debt recovery process in leasehold. Much of the legislation will be familiar to those in the leasehold sector. A similar 18-month rule applies. There is a test of reasonableness on costs that seems analogous to s19 for service charges and a consultation process analogous to s20, with thresholds to be determined. Funds will need to be held in a designated trust account, whereby any other funds in the account are also trust funds. You can map the new sections closely, but not always exactly (there are some differences), to existing legislation as follows:

- 17Q echoes s20B of the LTA 85

- 17R echoes s20C

- 17S echoes s21B

- 17T echoes s27A

- 17U echoes s42 of the LTA 87

Some exemptions may apply to qualifying building safety works where the works are required to be undertaken pursuant to a compliance notice or an urgent action notice issued by the regulator.

Special Measures Manager

If there has been a serious failure, or repeated failures, by the accountable person to comply with their duties or to hold any amounts received in respect of building safety charges in accordance with the relevant requirements, the regulator may apply to the tribunal for an order to appoint a special measures manager. These provisions vaguely echo the 87 Act appointment of a manager and there are cost recovery provisions within this for the manager to be paid.

In the event that a manager has been appointed under the 87 Act, the special measures manager would have supremacy over safety matters.

New Homes Ombudsman Scheme

A new homes ombudsman is to be set up, with jurisdiction across the UK, giving powers to compel developers to become members and to adhere to a Developers’ Code of Practice.

What do you think of the new system?

Tanfield Chambers barrister Mark Loveday is concerned with Part 4 of the draft bill, which introduces new statutory “Building Safety Charges” which are modelled on service charges and mirror many service charge rights (see Leaseholders face safety charges under proposed legislation above)

However, as Mark points out there is a very real difference in principle. “Whereas previous legislation was aimed at limiting service charges and admin charges payable by leaseholders under their leases, Pt.4 creates an entirely new set of charges imposed by statute. Many leaseholders who bought their properties on the understanding that their leases limited the extent of their potential exposure to management costs are in for a nasty shock. They may now be potentially liable for Building Safety Charges as well. Having said that, this may be the only way of cutting through the problem of funding crucial safety works. Someone has to pay for the new accountable persons, safety checks and safety works – and the legislation sets up structures so that leaseholders will have to share the pain”.

Justin Bates, a barrister at Landmark Chambers, told Inside Housing that the change will have “huge and negative implications for leaseholders”. He predicts that flat owners could face “a wave of huge demands”, while some landlords may wait until the charge is introduced before carrying out fire safety works.

UKCAG, which represents leaseholders affected by the cladding scandal, immediately called for the bill to be amended so that residents are not financially liable for building defects.

“Any other outcome would be a shocking betrayal of the government’s repeated promises to suffering residents,” the group said.

Mark Loveday also points to the prospect of real problems around recruiting accountable persons – especially where the premises are owned by the leaseholders themselves.

Property lawyer Cassandra Zanelli agrees that there are undoubtedly sweeping changes to be made in how buildings are managed. However, she too is concerned about the introduction of new charges and agree with Justin Bates that there may be unintended consequences for leaseholders.

“Under the new regime, lessees will be called upon to pay their building safety charges at 28 days’ notice. The works that sit behind these charges are likely to be costly. The natural consequence, therefore, is that lessees may find themselves receiving a demand for their contribution towards building safety charges with 28 days to pay. In certain circumstances, “consultation” as we currently know it will not be necessary,” she warns, adding “It has to be right that lessees (and residents) live in safe buildings…but where does the balance lie between people being safe in their homes, and people being able to afford to live in those homes?

“The Bill provides a route to recovery of these building safety charges. And the Bill seeks to assist in clarifying what’s recoverable in situations where there are drafting issues in leases. But for it to be successful (and for litigation to be as limited as possible), all of those involved in our sector will need to not only to understand and implement changes brought about by the Bill regarding building safety charges but also (and importantly) educate all stakeholders on their responsibilities and obligations,” she says.

This point was also brought to the fore by a survey carried out by freeholder group Savanta among 1000 leaseholders, which found that the majority (75%) weren’t comfortable with the new obligations they could be landed with. They were concerned about not having enough experience to manage building and fire safety, and one in three even said that if they were to be faced with more onerous responsibilities outlined in the draft bill they would be more likely to sell their property than before.

There is no doubt that the draft Building Safety Bill is the biggest change to the way we will manage buildings for a generation and the Government will be consulting widely on these proposals so you have the chance to feed back your views. Please do take time to look this over and send us your thoughts. You can read the proposed legislation in full here.

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The month in brief

Contents

IRPM News

Leasehold/block management

PRS & BTR

Social Housing

Scotland and Wales

Health and safety

Wellbeing

Fire safety

What’s new in HR?

Legislation

Spotlight on… Benjamin Hume

Legal Update

Talking point

Topic of the month

This article is for TPI members only

Become a Member today

The month in brief

Contents

IRPM News

Leasehold/block management

PRS & BTR

Social Housing

Scotland and Wales

Health and safety

Wellbeing

Fire safety

What’s new in HR?

Legislation

Spotlight on… Benjamin Hume

Legal Update

Talking point

Topic of the month

Resource

This article is for TPI members only

Become a Member today

TPI Update - December 2024

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