Draft Building Safety (Leaseholder Protections etc.) (England) (Amendment) Regulations 2023

Matthew Pennycook Excerpts

Monday 17th July 2023 General Committees

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

It is a pleasure to serve with you in the Chair, Mrs Murray. I thank the Minister for the detailed explanation she has just read into the record.

The Opposition welcome this instrument and do not intend to oppose it, although we do bemoan the fact that it has proven necessary for the Government to bring it forward. After all, these regulations consist mostly of technical amendments to regulations previously made under the Building Safety Act after it came into force. For example, regulation 10 amends the definition of resident management companies to ensure consistency across the relevant regulations. Surely, the need for such basic definitional alignment could have been anticipated in the drafting of the previous regulations. We appreciate fully that these are not simple matters, but the fact that this Committee is having to meet this afternoon to rectify what are largely obvious deficiencies and omissions in the drafting of the previously approved regulations does not exactly inspire confidence in the Government’s approach to leaseholder protections and the building safety crisis more generally.

During the passage of Building Safety Bill, we warned about the consequences of rapidly overhauling what was already a complex and technical piece of legislation in order to reflect the Government’s belated change of approach. Indeed, I remember arguing when we considered Lords amendments to the Bill in April last year that it was deeply problematic that this House had so little time to carefully consider or properly scrutinise substantial changes to the legislation. As I said at the time,

“this is no way to make good law”—[Official Report, 20 April 2022; Vol. 712, c. 191.]

Our concerns persist when it comes to the regulations before us. What assurances can the Minister give us that, in rectifying the deficiencies and omissions in previously approved regulations, the same errors will not recur in respect of the many other building safety instruments that we still need to consider?

While the bulk of this instrument concerns technical amendments to recently approved regulations made under the Building Safety Act, there are some noteworthy new provisions. I would like to press the Minister for specific information on one in particular: regulation 4, which adds Homes England to the list of interested persons who may seek remediation orders and remediation contribution orders under sections 123 and 124 of the Act. Leaving aside the obvious question of why it was not included from the outset, particularly given that it administers the building safety fund outside London, the addition of Homes England to the list of persons who can seek an RO and an RCO raises several questions.

First, is it the Government’s intention that, following the passage of this instrument, Homes England will largely or wholly take over the Department’s functions when it comes to applying to the first-tier tribunal for ROs and RCOs? Secondly, if that is the intention, do the Government expect this transfer of responsibility to lead to an increase in the number of such orders being applied for, beyond the extremely small number of orders that the Department is presently taking forward? Thirdly, will Homes England be provided with any further funding in order to fulfil this new responsibility—perhaps some of the £1.9 billion of allocated funding that the Department recently returned unspent to the Treasury?

As I have suggested, while there is good reason to believe that the need for them could and should have been anticipated, the instrument contains a series of perfectly sensible refinements to previous regulations, the effect of which should be to streamline the landlord certificate and leaseholder deed of certificate process. As the Minister has made clear, the draft regulations include provisions specifically requiring a landlord certificate to be served within four weeks of a landlord becoming aware of a new leaseholder deed of certificate containing information not included in a previous landlord certificate; changes to the information required to be included in a landlord certificate; and changes to the time period within which a landlord must share a copy of a received leaseholder deed to any RMC, RTM or named manager or else be prevented from recovering costs.

We take no issue with any of these measures. However, we regret that, although the instrument makes these necessary changes, it is a missed opportunity to resolve a number of other glaring deficiencies in the Building Safety Act that the Government really should have resolved by now. Let me give the Committee two brief examples.

The first example concerns the gap in the Building Safety Act that exists for those leaseholders who need to extend or vary their lease on or after 14 February 2022. The Minister and her officials are well aware that any leaseholder granted a lease extension or variation in a block of flats after that date does not benefit from the protections provided for under schedule 8 to the Act, even if the surrendered lease had the benefit, with the effect that leaseholders are being advised by the Government to try to persuade their landlord to apply those protections as contractual terms. The Government have stated on the record that they are

“looking to legislate to resolve this issue as soon as parliamentary time allows.”—[Official Report, House of Lords, 2 May 2023; Vol. 829, c. 1392.]

Why are the Government not using this instrument to address that shortcoming?

The other example concerns the circumstances in which the costs of remediating relevant defects in relevant buildings can be charged back to leaseholders. As the Minister will know, in the recent case of Adriatic Land 3 Ltd v. Leaseholders of Waterside Apartments, St James Court West, Accrington, the first-tier tribunal held that the service charge protections under schedule 8 to the Act were not retrospective. As a result, those landlords who, seeing the writing on the wall, quickly sent out demands for service charges to cover the cost of remedial works before the Act came into force on 28 June last year have seemingly got away with passing on significant costs to leaseholders. The Government are surely not expecting individual leaseholders or groups of leaseholders to fund litigation to settle the law, so why are they not using this instrument to clarify that the provisions of schedule 8 are retrospective?

In addition to the specific questions that I have put to the Minister about regulation 4, I would be grateful if she explained why these and many other unresolved issues are not being addressed in this instrument, and if she provided further detail on whether and when they will finally be addressed.