Draft Building Safety (Leaseholder Protections) (Information etc.) (England) Regulations 2022

Matthew Pennycook Excerpts

Monday 18th July 2022 General Committees

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

It is a pleasure, as ever, to serve with you in the Chair, Mrs Murray.

As the Minister has outlined, sections 116 to 125 of, and schedule 8 to, the Building Safety Act make provision in relation to remediation of certain defects in buildings and, importantly, include protections from liability for leaseholders in specific circumstances. The Minister knows that the Opposition argued trenchantly throughout the passage of the Bill for all blameless leaseholders facing potential costs to fix historical cladding and non-cladding defects to be fully protected irrespective of circumstance. We still firmly believe that that is the only just response to the building safety crisis.

Although they fall short of what we had hoped to secure, the leaseholder protections in the Act are none the less significant. The regulations before us detail how leaseholders will secure those protections. It is therefore essential that they are approved today, and we have no intention of opposing this statutory instrument. However, I must put five questions to the Minister about the regulations, and I hope he will respond in detail—if not in Committee, then in writing to me over the coming days.

The first is a procedural question relating to the date that the Building Safety Act came into force. The Minister will be aware that the main statutory provisions in the regulations came into force with the Act itself on 28 June 2022. However, in practice, those provisions cannot operate until the regulations before us are approved. My question is therefore: why was the Act brought into force on 28 June before the regulations were ready? That is a procedural question, but it is important none the less because this has caused significant confusion among leaseholders living in buildings with extensive historical non-cladding defects, including a great many in my own constituency, who look to the Act as their only means of escaping financial ruin, but who have spent recent weeks in a state of agitation because the leaseholder protection provisions were unusable.

My second question relates to enfranchised buildings. As the Minister knows, during consideration of Lords amendments we pressed the Government to amend the Bill to ensure that the service charge protections set out in schedule 8 applied clearly to enfranchised buildings and buildings where the right to manage has been exercised. The Government refused to accept the amendments, but the former Minister, the right hon. Member for Pudsey (Stuart Andrew), did commit the Government to a consultation to explore

“how best leaseholders in collectively enfranchised and commonhold buildings and other special cases can be protected from the costs associated with historical building safety defects.”—[Official Report, 20 April 2022; Vol. 712, c. 186.]

My question is simple: where is the promised consultation, and how much longer will leaseholders in such buildings have to wait to learn whether the Government believe that further measures are appropriate to address their plight?

My third question relates to the point in time at which the leaseholder protections that these regulations provide for kick in. It is clear from the guidance that the Department has published that it takes the view that the protections are retrospective and that, as a consequence, any service charge demand for the purpose of paying for the remediation of historical non-cladding defects made but not paid before 28 June is now invalid. However, that is far from the most obvious reading of the Act itself.

The relevant Cabinet Office guidance makes it clear that we cannot implement retrospective law unless the Attorney General and Solicitor General have both approved it. So my question is whether the Department secured the appropriate memoranda from the Law Officers providing for such approval. If not, why is the Department so confident that qualifying leaseholders issued with a service charge demand before 28 June are protected?

My fourth question relates to what advice the Government are giving to leaseholders who face demands for payment right now. The Government are advising leaseholders not to pay invoices relating to relevant historical remediation costs until building owners have fulfilled a series of transparency and financial reporting requirements. Specifically, the guidance issued by the Department makes it clear that landlords can charge qualifying leaseholders only for the cost of fixing historical non-cladding defects if, first, they have sent all leaseholders in the building a formal legal certificate to that effect and, secondly, that they can demonstrate that the costs do not relate to works covered by the Act. Yet as we know—I have live cases of this in my own constituency—landlords and managing agents are making demands for payment without having issued such legal certificates or demonstrated as much.

The guidance implies that any landlord or agent who seeks to enforce a wrongly issued invoice could be committing a criminal offence, but what steps will the Government take to ensure that leaseholders can enforce these rights? In practice, will it be left entirely to leaseholders to challenge the payability of such invoices at the first tier tribunal, with all the barriers that that involves? Or will the Government task the recovery strategy unit with taking up such cases, and if so, how do leaseholders or hon. Members refer individual cases to that unit?

Lastly, I have a question about the robustness of the regulations before us. The Minister will know that the Joint Committee on Statutory Instruments in its recent ninth report of this 2022-23 Session drew the special attention of both Houses to these regulations on the grounds that

“they are defectively drafted in four respects and that there is doubt as to whether they are intra vires in one respect.”

What assurances can the Minister provide that the regulations, which we will shortly approve, are sufficiently watertight to protect leaseholders as the Act intends?