On 5 July 2021, the Government published its updated Building Safety Bill (“the Bill”). The Bill provides for a retrospective extension of time for claims under section 1 or 2a of the Defective Premises Act 1972 (“the 1972 Act”) or section 38 of the Building Act 1984.
Section 126 (1) of the Bill provides for a “…special time limit for certain actions [as defined above] in respect of damage or defects in relation to buildings.” This time limit is stated to be 15 years from the date on which the right of action accrued. Section 125 of the Bill proposes inserting a new section 2A into the 1972 Act, where at section 8, it outlines that the cause of action is treated as occurring at the time the work is completed, or if work is done after that to rectify work already done, the cause of action will be from completion of the further work.
It is worth noting, limitation periods for claims like this are currently as follows:-
- Six years from the date of the date the cause of action arises (Limitation Act 1980); or
- Three years from the date of knowledge of the damage, where the damage is latent (Latent Damage Act 1986).
Section 14B of the Limitation Act 1980 also provides that there is an overriding limitation period of 15 years. This essentially means, if damage/loss becomes known after the usual 6-year limitation period, a claim must be brought within 3 years of discovery of the damage/loss, but no later than 15 years from the date the cause of action arises. This is likely the motivation for the proposed change to the time limits within the Bill.
The reason these changes are so important, is that this will allow some leaseholders potentially extra 9 years within which to bring a claim. Further, this will mean more claims by leaseholders against contractors who have installed prohibited cladding or external wall systems. Whilst this is likely welcome news for leaseholders (or, at least, those who can afford to fund litigation), we expect contractors will take this very differently.
The Bill is not yet in force, and so is subject to change. However, if you have any queries on the Bill, or your obligations in respect of Building Safety generally, please contact our dedicated Building Safety team on [email protected]. Or, contact Ian Seeley, Joe Brightman, Molly Frankham or James King.