Leaseholder Protections Regulations

Leaseholder Protections uses powers in the Building Safety Act 2022 to make provision for and determines liability for the remediation of historical safety defects in buildings over 11m.

Published on

The leaseholder protections in the Building Safety Act 2022 (“the Act”) came into force on 28 June 2022, with new financial protections for leaseholders in buildings above 11 metres or five storeys with historical safety defects.

The accompanying secondary legislation came into force on 21 July 2022, providing further detail on how the measures in the Act will work and ensuring that the full range of leaseholder protections have their full effect.

Overview of the leaseholder protections

The government is committed to protecting innocent leaseholders from the unfair burden of remediation costs to make their home safe, and Parliament has passed a law to give this effect.

 The Act ensures that those who built defective buildings take responsibility for remedying them, that the industry contributes to fixing the problem, and that leaseholders are protected in law from crippling bills for historical safety defects.

The leaseholder protections came into force on 28 June 2022, with new financial protections for leaseholders in relevant buildings with relevant historical safety defects.

The government is clear that developers must pay to fix buildings they had a role in developing or refurbishing, even where they no longer own the building. The Act ensures that building owners who are - or are associated with - the developer must pay for the remediation of historical safety defects (the definition of ‘building owner’ can be found in What are my building owner’s legal obligations?). More information on what leaseholders do and do not have to pay can be found in Remediation costs: what leaseholders do and do not have to pay.

Courts have also been granted new powers to extend liability to associated companies. This ensures that civil cases for claims against defective buildings can be brought against companies associated with a developer, preventing the use of complex corporate structures to avoid liability. More information on building owners’ obligations can be found in What are my building owners’ legal obligations?

Where a developer cannot be identified or has not yet agreed to pay for its own buildings, funding will be made directly available to pay for cladding system repairs and remediation. This will ensure that no qualifying leaseholder faces costs to remediate unsafe cladding systems on their building.

Qualifying leaseholders are protected from all cladding system remediation costs. Those whose property is calculated as being less than £325,000 in Greater London (£175,000 elsewhere in England) or whose building owner has a group net worth of more than £2 million per relevant building, as of 14 February 2022, are exempt from all historical safety remediation costs.

The Act ensures that any contribution required from qualifying leaseholders for non-cladding defects and interim measures (including waking watch costs) is firmly capped and spread over 10 years, with costs already paid out since 28 June 2017 counting towards the cap. If remediation costs exceed the cap, building owners must make up the difference.

The Act also includes a robust package of measures designed to ensure that those responsible finally put right the buildings they have contributed to making dangerous and that leaseholders are firmly protected from the unfair costs of remediation that they previously faced.