Amendments to the Building Safety Act 2022
Amendments to the Building Safety Act 2022
The Building Safety Act 2022 (“the BSA”) created statutory protections for tenants of qualifying buildings in order to cap service charges payable in relation to works required to rectify building safety defects. However, the BSA contained an error such that any lease granted after 14 February 2022 would not qualify for protection. A lease extension is technically a surrender of an existing lease and a grant of a new lease, meaning that any lease extensions completed after 14 February 2022 would not have the benefit of the protections afforded by the BSA.
This could expose a tenant to substantial service charges and cause issues when coming to sell or re-mortgage their flat.
The Government has addressed this issue in the Levelling-Up and Regeneration Act 2023 (“the Levelling-Up Act”) which received Royal Assent on 26 October 2023. The Levelling-Up Act ensures that a “connected replacement lease” will also be a qualifying lease and will enjoy the protections of the BSA (if those protections were enjoyed prior to the lease extension).
There are various conditions set out in the Levelling-Up Act for a lease to be a “connected replacement lease” but in most cases it appears that a simple lease extension (whether statutory or voluntary) will meet the requirements. The amendments are retrospective and are treated as coming into force on 28 June 2022 (the date that the BSA came into force).
However, the definitions are not simple and we imagine there will be litigation for more complicated lease extension matters due to the complex definitions.
