New draft regulations published under Building Safety Act 2022
Catherine Taskis KC looks at new draft regulations that have been published to use powers in the Building Safety Act 2022 (‘BSA’) to make amendments and clarifications to the current leaseholder protection regulations under that Act (the catchily-named Building Safety (Leaseholder Protections)(Information etc)(England) Regulations 2022/859).
The draft (and equally memorably-named) Building Safety (Leaseholder Protections etc)(England)(Amendment) Regulations 2023 make various amendments to definitions in (and other aspects of) the 2022 Regulations. They also make an attempt to deal with the circularity of drafting in regulations 3, 4 and 5 of the 2022 Regulations. These provisions set out what has been described as a waterfall of liabilities between landlords for service charges which cannot be recovered from qualifying leaseholders. The original circularity arose from the fact that each of these three regulations limited the remediation amount by excluding any sums recoverable under each of the other two regulations: which the result, potentially, that no part of the relevant cost could be recovered. Under regulation 3, which applies if the cost of a relevant service charge falls on the landlord because the leaseholder is not liable by virtue of paragraph 2 of Schedule 8 of the BSA (there is a responsible landlord), the landlord can in effect pass the cost on to that responsible landlord. However, paragraph (4) of regulation 3 provides that the cost so recoverable “may not include any amount which L is entitled to recover under regulations 4 and 5”. In the same way, regulation 4 (which applies where service charge is not payable because of paragraph 3 of Schedule 8; that is, the landlord met the contribution condition at the relevant time), provides (at paragraph (4)) that the costs recoverable from the contributing landlord “may not include any amount which L is entitled to recover under regulations 3 and 5”. Regulation 5(4) contains an equivalent limitation. So a landlord who may be able to recover under regulation 3 cannot do so if he may also be able to recover under regulations 4 or 5; but cannot recover under those regulations if he may recover under regulation 3. Where is such a landlord to start? Does his ability potentially to recover under more than one regulation prevent him from recovering at all?
The 2023 Regulations contain amendments to the terms of paragraph 4 of each of these 2022 regulations (3, 4 and 5): by the addition to the end of each paragraph the words “but nothing in this regulation prevents L from seeking to recover amounts under” the other two regulations. This is presumably intended to remedy the circularity of the 2022 wording; but it is far from clear that it in fact does so. It might clarify the draughtsman’s intention; but can it be said to alter the effect or operation of the provisions? Is it any clearer, for a landlord, where a claim for contribution should begin?
The BSA 2022 is already, arguably, a model of unachieved intention; is this another example of the mismatch of aims and effect?
*These draft Building Safety (Leaseholder Protections etc.) (England) (Amendment) Regulations duly came into force with effect from 5 August 2023, SI number 2023/895. The amendment of regulations 3, 4 and 5 of the 2022 Regulations was effected as proposed in the draft. Whether this amendment will provide the intended clarity to a landlord seeking to recover service charges which cannot be claimed from a leaseholder, remains to be seen.
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