Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 13
13
The Government should provide for recovery of ongoing building safety costs through existing service charge...
Recommendation
The Government should provide for recovery of ongoing building safety costs through existing service charge provisions while improving the transparency of such charges, preferably by implementing the Committee’s previous recommendations for standardised forms for service charge invoices. The building safety charge should be reserved only for any leases without a service charge and should be treated as a service charge for the purposes of leaseholder protection. (Paragraph 54) The Building Safety Regulator
Government Response
Acknowledged
HM Government
Acknowledged
33. We agree with the Committee’s recommendation that charges should be transparent. The proposed Building Safety Charge has been designed to ensure that the costs leaseholders pay for building safety measures, and how they pay for them, are transparent and reasonable. 34. We do not however consider it appropriate to rely on existing service charge provisions to secure payment of the building safety costs. Service charge provisions vary and we can’t guarantee that provisions will clearly be in place to enable the recovery of the building safety costs. 35. The prerequisites which apply to the collection of the charges will also vary. For instance, under some leases a “reasonable proportion” of the service charge may be collected in advance and under other charges can be raised only subsequent to costs having been incurred. We would effectively be seeking to amend the service charge provisions in any lease ‘sight unseen’. 36. The separation enables leaseholders to start with a ‘clean slate’ in respect of building safety charges and upon introduction, all leaseholders will have a nil balance in respect of the charge irrespective of any service charge debt. It also ensures that payments cannot be subsumed by general service charge payments or debt or applied towards matters other than building safety. A leaseholder in dispute with the landlord may wish to withhold payment of service charges but will be able to make payments of the building safety charge. 37. Creating a separate Building Safety Charge allows us to put in place statutory rights and protections which will work with the new statutory building safety regime and it will allow Accountable Persons to anticipate and be responsive to safety issues without being restricted by pre-existing terms and rules which were not necessarily established with the Building Safety Act regime in mind. 38. The Building Safety Charge provides greater certainty and clarity to leaseholders and increases transparency on the costs charged in relation to building safety. It provides a clear cost recovery mechanism for leaseholders, ensuring a fair application of the statutory regime, which is intended to provide additional safety measures for all who live in higher-risk buildings.