The Law Society has released a new guide to help members involved in flat sales and purchases understand the Building Safety Act 2022 (BSA 2022).

The BSA 2022 is part of the building safety legislation produced in the wake of the 2017 Grenfell Tower disaster. It introduces a new building safety regime for certain residential buildings. Part of the Act addresses who will pay the costs of remediating buildings.

The government has said it is committed to protecting leaseholders from the burden of remediation costs. It has introduced developer and government-funded schemes that have significantly reduced the costs for leaseholders.

When the BSA 2022 was first introduced, some firms decided not to take on matters involving affected properties because of the responsibility it appeared to place on them resulting from the novelty, complexity and lack of clarity in the legislation.

Law Society of England and Wales president Nick Emmerson said: “Our guide will help solicitors make sense of the improvements to the legislation that have been made since it was first introduced. It will also provide solicitors with necessary information to make informed decisions about taking on residential leasehold conveyancing matters where the BSA 2022 applies.

“Created in response to members’ initial concerns about the legislation and developed with government and industry stakeholders, it contains background information and high-level guidance, signposting the key sources of information solicitors need to navigate the BSA 2022.”

This guide includes information on:

+ introduction of the BSA 2022

+ who pays to remediate tall buildings affected by fire safety issues

+ general criteria for working on BSA 2022 matters

+ establishing if a building is in scope

+ advising sellers

+ advising buyers and lenders

+ leaseholder-owned blocks

+ the position in Wales

The Law Society has also worked with the Department for Levelling Up, Housing and Communities to provide supplementary FAQs and illustrations of some situations solicitors may encounter in practice.

Information from estate agents

The Law Society points out that the National Trading Standards Estate and Letting Agency Team (NTSELAT) released its requirements for the information estate agents should use in marketing properties and ‘information for sellers’ on 30 November 2023.

The NTSELAT guidance requires that:

+ any issues known about the safety or structure of the building (such as unsafe cladding), and the costs of remediation or other costs, are to be provided in the marketing material compiled to sell the property

+ simple language is used by the estate agents so the scale of any remediation or development work is made clear, even though the issues can be complex

+ if prospective buyers may need to vacate the property to allow remediation or building work to be carried out, the duration and scope of this should be disclosed

+ the actual or expected cost of remediation or mitigation for any relevant building safety issue should be disclosed where the liability for payment falls to the prospective buyer

NTSELAT also recommends to estate agents that where building safety work has already been completed (for example, remediation to unsafe cladding), the agents obtain a copy of the completion certificate.

Information from lenders, surveyors and valuers

There are different types of reports that may provide useful information.

The main means of assessing buildings for fire risk include:

+ fire risk appraisal of external walls (FRAEW) – this is an assessment process designed to evaluate the fire safety performance of external walls

+ fire risk assessment (FRA) – this is a review of a building to assess its fire risks. Under the Fire Safety Act 2021, all multi-occupied buildings of any height in England and Wales must have an FRA taking account of the external walls to enable effective risk management of the building to be put in place

+ external wall system fire review certificate (EWS1) – this was created to assist in mortgage valuations for individual leasehold properties and is not a legal requirement. In December 2022, six major lenders (Barclays, HSBC, Lloyds Banking Group, Nationwide Building Society, NatWest and Santander) signed a statement on cladding that confirm that they will consider mortgage applications on impacted buildings before they have been remediated, where they are in a developer or government remediation scheme, or covered by the leaseholder protection as evidenced by a leaseholder deed of certificate. This has reduced the need for EWS1s to help satisfy mortgage applications. In December 2023, three more lenders (Skipton Building Society, TSB and Virgin Money) supported the statement. This statement has effectively been replaced by the requirements of the individual lenders in Part 2 of the UK Finance Handbook

Buyers can ask their own surveyors to advise them on the contents of FRAs or FRAEWs that have already been carried out.

Not all surveyors will be able or prepared to provide this advice.

Valuers will usually be instructed by the lender. They will not ordinarily provide comment on building safety status.

The valuer may provide a copy of the EWS1 report if this is available.

Valuers may provide professional reports that have been provided to them, if they have the required permissions. They may also request that additional reports are prepared.

As usual, you must report to the lender immediately if you are provided with information that conflicts with any assumptions made in the valuation, in the unlikely event it is provided to you.

Paragraph 4.4 of the UK Finance Handbook recommends that you advise the borrower:

+ not to rely on the valuer’s report in deciding whether to buy, and

+ that they should only make their decision to purchase based on a fuller inspection that they commission for their own use

The new guide can be accessed here.