The first provisions of the Building Safety Act 2022 ("the Act") will come into force on 28 June 2022.
Amongst these are changes to the Defective Premises Act 1972 ("the DPA"), which will significantly increase the potential for claims to be made against developers, contractors and designers who carry out works in relation to a "dwelling".
The DPA
The DPA applies to all dwellings in England and Wales, regardless of their height. Section 1 of the DPA places a duty on a "person taking on work for or in connection with the provision of a dwelling" to ensure that it was "fit for habitation" when the works were completed. Historically, only works related to new dwellings and when a breach was shown, a claim could be brought within six years of completion of the relevant works.
The changes brought by the Act to the DPA are significant. The two key changes are:
- The limitation period for historic claims under s1 of the DPA has been increased to 30 years, meaning that claims can be made within 30 years of the date on which the works were completed for historic projects
- For any project which completes on or after 28 June 2022 the limitation period for claims will be increased to 15 years.
- A new Section 2A is introduced to the DPA, which expands the scope of the duties owed so that any work carried out on a "relevant building" (a building containing one or more dwellings) in the course of business, and which leave a dwelling unfit for habitation, may lead to a claim. This right will only apply to works completed after 28 June 2022.
Strict Liability?
The Government's Redress Factsheet confirms that the Government consider that breaches of the DPA are strict liability matter, meaning that "if a building is not fit for habitation due to defective work, then a claim can be brought - there is no space within the Act to consider whether the defendant was at fault, and there is no burden on the claimant to prove that".
It is not yet clear whether this interpretation would be shared by the Courts. However, if this is the approach taken then it will have significant consequences for contractors, consultants and developers taking on works:
- As the Government have said, no fault will need to be proven. This means that even if a contractor has used all reasonable skill and care, and has used products widely recognised as suitable in the industry, if the end result is that a dwelling is "unfit for habitation" they will be liable for the costs of rectifying this situation.
- This is likely to have a negative impact on any professional indemnity insurance which a party defending an action may seek to rely on, as policies are likely to only cover situations where a party has failed to exercise reasonable skill and care in its works. A claim under the DPA may leave parties having to foot a substantial bill without any route to recover from their insurers.
- This may impact on the willingness of developers, contractors and consultants to undertake works to dwellings or, if they are willing to do undertake these works, it may lead to an increase in prices to reflect the significant new risk which they are taking on.
Next Steps
Only time will tell if the Courts will share the Government's interpretation of the DPA. However, if they do, then those who carry out works to properties containing dwellings are likely to face potentially wide and far reaching consequences.
