Following the announcement of the Building Safety Fund in March 2020, the Government has now published the Building Safety Fund registration prospectus.
Our construction law experts take a look at the Building Safety Fund registration prospectus and what this means for building owners and those managing buildings.
Key points of the Building Safety Fund:
- Building owners, freeholders or other responsible entities of high rise residential buildings will need to register for the fund first to confirm eligibility in principle. The initial registration process now open and will close on 31 July 2020.
- The fund applies to private and social sector residential high rise buildings, including mixed use, over 18m.
- The fund is for the remediation of unsafe, non-ACM cladding systems including certain types of other (non-Aluminium) metal composite panels, High Pressure Laminate (HPL) panels, and render and timber wall systems that do not meet fire safety standards.
- The fund is not available for interim fire safety measures, such as Waking Watches.
- It is for building owners who are unable to fund the remediation of unsafe non-ACM cladding. Building owners will need to explore every opportunity to fund remediation from sources other than private residential leaseholders and Government funding, such as pursuing building warranties and through litigation.
- Parties are likely to be required to pay back into the scheme to the extent that they recover from industry / insurers.
- It is currently in a registration phase and there is no clarity on how funds will be paid out if the scheme is insufficient. Buildings must be registered to be able to move on to the full registration phase.
- Further details are to be released. Full guidance and the application process are expected to be available by end of July 2020.
Building Safety Fund registration prospectus
The prospectus outlines eligibility for the fund and how to register. It confirms that building owners, freeholders or other responsible entities of high rise residential buildings will need to register for the fund first to confirm eligibility in principle. The initial registration process is expected to open in the first week of June and will close on 31 July 2020. The full application process is expected to open by end July 2020. It also confirms:
- The fund is available in the private and social sectors and will cover mixed use buildings.
- The fund won't be available where remediation work had been committed to or started before 11 March.
- Non-residential buildings and buildings under 18m will not be covered either.
- Building owners will be required to explore every opportunity to fund remediation from other sources. This will be assessed during the registration process.
Eligibility
Registration is open to building owners, freeholders or other responsible entities for buildings that have, or may have, unsafe non ACM cladding systems and where there are residential leaseholders who would otherwise be required to pay for remediation through a service charge. Examples include HPL, render and timber wall systems.
The term "building owner" is not defined; however, the prospectus confirms that a "responsible entity" is "the body that has the legal right to carry out the remediation works and to recover the costs from leaseholders as service charge" (footnote, p6).
The fund will be available for unsafe non-ACM cladding on high rise residential buildings 18 metres or higher, with an allowable tolerance of 30cm. It will cover cladding systems with:
- Panels achieving European Class C-s1, d0 or worse combined with any insulation*;
- Panels achieving European Class B-s1, d0 to Class B-s3, d2 with insulation achieving Class B-s1, d0 or lower*
- Any building with insulation or filler achieving Class B-s1, d0 or lower that is not installed in line with a system that has a BR135 certificate via a BS8414 test
*Unless the system has achieved a BR135 certificate via a BS8414
Registration
Building owners are asked to register for the fund now to enable the program to confirm eligibility in principle.
- Registration is online via an expression of interest form on the Building Safety Fund page on the government website.
- Registrations are now open and will close on 31 July 2020.
- Every building must be registered individually.
- Registration will not guarantee funding but a building must have been registered with the scheme in order to submit a full application to the fund.
- Supporting evidence demonstrating technical eligibility will be requested following registration.
A full application process is expected to be opened by end of July 2020 (full application guidance to be issued in July 2020). Buildings will need to be registered within eight weeks of the registration form being issued and submit a full funding application based on a tender price before December 2020.
Building owners will be required to take reasonable steps to establish the materials used in the external wall systems of their buildings. Additional support will be available from the Ministry of Housing, Communities and Local Government to assist in determining eligibility where building owners are not able to do so.
Scope and coverage
The Building Safety Fund will meet the reasonable capital costs associated with removing and replacing unsafe cladding where costs would otherwise be passed on to leaseholders. Reasonable costs will be informed by industry standards having regard to cost benchmarks established from comparable projects.
The fund will not meet ongoing revenue costs, such as the cost of interim safety measures such as Waking Watches. The prospectus also confirms that the fund will not cover buildings where a warranty claim for the full costs of remediation has been accepted (page 10).
A table setting out examples of what the fund will and will not cover is at page 10/11.
Annex A: sets out technical information to assist with completing the registration form. This includes information about assessing the building height and external wall system and details of the required standard of remediation works.
This article has been co-written by James Bessey and Gemma Hill.
