The Building Safety Act 2022 represents the most significant reform of building safety regulation in England for decades. For developers and investors involved in residential development, the legislation introduces new regulatory approval processes, expanded liability exposure and ongoing building safety obligations.
The Act changes how higher-risk residential buildings are designed, constructed and managed throughout their lifecycle. Understanding these changes — and where the associated risks sit — is now an essential part of development and investment decision-making.
Background
The Act was introduced following the Grenfell Tower fire in 2017 and the subsequent Hackitt Review, which identified systemic failures in the way building safety was managed across the construction and occupation lifecycle.
The legislation received Royal Assent in April 2022 and has been brought into force in stages. The higher-risk building regime is now operational and is overseen by the Building Safety Regulator, established within the Health and Safety Executive.
The Act applies across England and covers both the design and construction phase of buildings and the ongoing occupation phase. For developers, the obligations arising during design and construction are particularly significant. For investors and asset owners, the occupation-phase duties and liability provisions create long-term regulatory exposure.
Higher-risk buildings
The Act introduces a specific regulatory regime for higher-risk buildings. These are defined as residential buildings that are at least 18 metres in height or at least seven storeys and contain two or more residential units.
Before construction begins on a higher-risk building, a building control application must be submitted to the Building Safety Regulator rather than to a local authority or approved inspector. This forms part of the gateway approval process. Construction cannot begin until the Regulator has approved the application.
Any significant design changes during construction must also be notified to the Regulator and approved before implementation. Once construction is complete, the developer must apply for a completion certificate. The Regulator will assess compliance before issuing the certificate, and occupation of the building cannot begin until it is granted.
The Principal Accountable Person
For higher-risk buildings in occupation, the Act introduces the concept of the Principal Accountable Person (PAP). This is the entity — either an individual or organisation — that holds the legal estate in the building or is otherwise responsible for repairing and maintaining its structure and exterior.
The Principal Accountable Person must:
- Register the building with the Building Safety Regulator
- Maintain a safety case demonstrating how building safety risks are managed
- Apply for a building assessment certificate
- Ensure the golden thread of information is maintained throughout the life of the building
For investors acquiring existing higher-risk residential buildings, identifying who holds these obligations — and whether they are being discharged properly — is a critical part of due diligence.
The golden thread
The golden thread refers to the digital record of information relating to a building's design, construction and ongoing management. The purpose is to ensure that those responsible for building safety have accurate and accessible information about how the building was designed and constructed.
During construction of a higher-risk building, the developer is responsible for ensuring the golden thread is established and maintained. This includes design documentation and specifications, records of design changes, inspection and compliance documentation, and information necessary to understand the building as constructed. At completion, this information must be transferred to the accountable person responsible for the building during occupation.
Liability provisions
The Act significantly changes the liability landscape for developers. Amendments to the Defective Premises Act 1972 extend the limitation period to 30 years for existing buildings (applied retrospectively) and 15 years for new buildings going forward — a substantial increase from the previous six-year contractual limitation period.
The retrospective nature of these provisions means that claims relating to buildings completed many years ago may now be pursued. For developers and investors holding residential assets constructed within the past three decades, this is a practical and ongoing risk consideration.
Implications for development finance and investment
Lenders and institutional investors are becoming increasingly attentive to Building Safety Act compliance as part of their due diligence processes. For new higher-risk residential schemes, evidence of compliance with the gateway approval process, proper golden thread management and clear allocation of Principal Accountable Person responsibilities is often required before finance is advanced.
For investors acquiring existing assets, the position of the building within the regulatory framework — whether it is registered, whether the safety case is in order, whether there are outstanding remediation obligations — directly affects value and risk. The position on any individual asset requires careful analysis before acquisition.
Practical considerations
- Identify at an early stage whether the Building Safety Regulator gateway process will apply to a project and build approval timelines into the development programme
- Ensure golden thread obligations are clearly allocated in consultant and contractor appointments from the outset
- Include Building Safety Act compliance as a specific workstream during acquisition due diligence on residential assets
- Confirm the Principal Accountable Person is properly identified and that obligations are being discharged on any existing higher-risk building
- Review existing development and investment portfolios against the extended limitation periods introduced by the Act
Conclusion
The Building Safety Act has fundamentally reshaped the regulatory framework governing residential development and ownership in England. The legislation affects not only how buildings are designed and constructed but also how they are owned, managed and financed over the long term. Developers and investors operating in the residential sector must now engage with a far more rigorous regulatory environment than existed before the Act came into force.
We regularly advise developers, investors and asset owners on Building Safety Act compliance, including regulatory obligations, development structuring and building safety due diligence on acquisitions. Please get in touch if you would like to discuss how the Building Safety Act may affect a project or investment.