A Runcorn business operator has been fined The overarching objective for the Building Safety Act (“the BSA”) 2022 is to ensure that High Rise Buildings (” HRBs”) are safe for their residents.  Liability under the BSA is a complex issue that involves various parties throughout the stages of the building’s life cycle and the ability to enforce is far reaching.  

The Corporate Veil

The corporate veil is a longstanding principle whereby a company will be treated as a separate legal entity from its directors, and other companies. The key benefit being that a company will be liable for its own debts and liabilities rather than its directors and shareholders. In certain circumstances, the BSA permits the corporate veil to be pierced resulting in a situation where individual directors are liable for their actions and cannot ‘hide behind the company’. Traditionally, it has been very difficult to pierce the corporate veil and is usually reserved for when there is some form of impropriety, such as fraud. Some of these circumstances are considered below.

Building Liability Orders

This concept is set out in Section 130 of the BSA. Whilst the BSA mainly focuses on HRBs, Section 130 is not constrained to only these types of buildings, in fact it is not constrained to any one type of building at all.

For example, should a parent company set up a Special Purpose Vehicle (SPV) for the purpose of a new development, that parent company may still be accountable for any liabilities of that SPV in accordance with Section 130.

Relevant Defects

A ‘relevant defect’ will be present in a ‘relevant building’. A relevant building is defined at Section 117 of the BSA as a ‘self-contained building, or self-contained part of a building which contains at least two dwellings and is at least 11 metres high or has at least 5 storeys.

This leads on to a ‘relevant defect’ being defined at Section 120 of the BSA. This definition is purposely very wide; ‘anything done (or not done) or anything used (or not used) in connection with relevant works and causes a building safety risk. 

A landlord, or the partnerships/companies ‘associated’ with a landlord, tasked with the remediation of ‘relevant defects’ is liable for the cost of any necessary remedial works to the building.

Remediation Orders and Remediation Contribution Orders

Where it has been established that a landlord is to carry out remediation works but fails to do so, an interested party may make an application to the First-Tier Tribunal seeking a ‘remediation order’ against the landlord, compelling them to carry out the works in accordance with Section 123 of the BSA.

Insolvency Orders

Where a company which is a landlord under a lease of a ‘relevant building’ (or any part of it) is in the course of winding up, an application can be made requesting that the company or partnership ‘associated’ (as above) with the dissolving company make contributions towards the liabilities of the company being wound up in respect of remedying any ‘relevant defects’. (Section 130 of the BSA). 

Liability of ‘Officers’

Where an offence is committed under Part 2 or Part 4 of the BSA by a company, Section 161 of the Act extends liability past the company and on to the company’s officers. For such liability to be established the offence committed must be:

“(a) committed with the consent or connivance of any director, manager, secretary or other similar officer of the company, or any person who was purporting to act in any such capacity, or; 

(b)is attributable to any neglect on the part of any such person.”