Building Safety Bill — Before Clause 117 — Meaning of “Relevant Building” — Caps on Remediation Charges Passed to Leaseholders — 20 Apr 2022 at 15:30

The majority of MPs voted to allow leaseholders to charged for legally required building safety works, except cladding remediation, with caps on charges based on lease value and property location; caps approved range from £10,000 for leases worth under £1m outside of London, to £100,000 for leases worth over £2m wherever the property is.

MPs were considering the Building Safety Bill.^[1][2][3]

Specifically under consideration were:

• Government amendments (a) and (b) made to Lords amendment 184.

and

• Government amendments (c) and (d) proposed to Lords amendment 184.

The motion supported by a majority of MPs in this vote was:

• That the amendments be made.

Lords amendment 184 introduced a new schedule titled: ''Remediation Costs Under Qualifying Leases"^[5].

Explanatory notes to amendment 184 state:^[6]

• Lords Amendment 184 inserts a new schedule which outlines the conditions under which the service charge is not payable in respect of relevant defects. No service charge is payable under a qualifying lease in relation to relevant defects for which landlord or associate is responsible or if a landlord meets the contribution condition. No service charge is payable for cladding remediation. Paragraph 6 provides that the permitted maximum leaseholder contribution is zero, which was introduced through a non-government amendment.

These provisions protect certain leaseholders from being charged for legally required building safety works.

Amendments (a)-(d) stated:

(a)

• In paragraph 2(4) of that Schedule, in the definition of “relevant landlord” after “lease” insert “at the qualifying time”

(b)

• In paragraph 2(4) of that Schedule, in the definition of “relevant landlord”, at end insert “at that time”

(c)

• In paragraph 6 of that Schedule, in sub-paragraph (2) leave out “zero” and insert “(subject to sub-paragraphs (2A) to—
• (a) if the premises demised by the qualifying lease are in Greater London,
• (1) £15,000;
• (a) otherwise, £10,000.
• (2A) Where the value of the qualifying lease at the qualifying time exceeded £1,000,000 but did not exceed £2,000,000, the permitted maximum is £50,000.
• (2B) Where the value of the qualifying lease at the qualifying time exceeded £2,000,000, the permitted maximum is £100,000.”
• (d)
• In paragraph 6(4) of that Schedule, at end insert “and this paragraph.”

The substantive amendment is amendment (c) which permits service charges in relation to certain legally required work to address safety issues to be levied on leaseholders, with caps on a sliding scale based on the location, and value, of the lease.

In this vote the choice was between no charges being passed on and capped charges being passed on. It was not a choice between capped or uncapped charges.

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• [1] Parliament's webpage on the Building Safety Bill, Parliament.uk
• [2] Building Safety Bill, as brought from the Commons, 20 January 2022, Parliament.uk
• [3] Explanatory notes to the Building Safety Bill, 20 January 2022, Parliament.uk
• [4] Amendment paper for consideration of the Building Safety Bill on 20 April 2022, Parliament.uk
• [5] Lords amendments to the Building Safety Bill, 5 April 2022, Parliament.uk
• [6] Explanatory notes to the Lords amendments to the Building Safety Bill, 7 April 2022, Parliament.uk
• [7] Amendment paper for consideration of the Building Safety Bill on 20 April 2022, Parliament.uk

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