Clause 122 - Amendments to the Commonhold and Leasehold Reform Act 2002

Building Safety Bill – in a Public Bill Committee at 11:30 am on 21st October 2021.

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Photo of Eddie Hughes Eddie Hughes Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities) 11:30 am, 21st October 2021

In July 2020 the Law Commission published a report on reinvigorating commonhold, and it has made recommendations to make the tenure a workable alternative to leasehold tenure. In partnership with industry and leaseholders, the Government have also established a new commonhold council, which will prepare homeowners and the market for the widespread take-up of commonhold. Although there are no existing commonhold tenure buildings that fall into the scope of the new building safety regime, it is necessary that we ensure that our new building safety regime applies to new, higher-risk commonhold buildings, as they may be developed in the future.

Clause 122 amends the Commonhold and Leasehold Reform Act 2002 to ensure that building safety management is adequately considered in higher-risk commonhold buildings. As per clause 69, the commonhold association will be the accountable person and will be subject to the fire and structural safety building regime. Clause 122 makes it mandatory for a commonhold association to include in its commonhold community statement provision to ensure compliance with its duties under part 4 of the Bill. It also makes amendments to the Commonhold and Leasehold Reform Act 2002 to ensure that the directors of the commonhold association make an annual estimate of the income required to meet the building safety expenses. That must be detailed in the commonhold community statement of a higher-risk commonhold building.

The clause also ensures that each commonhold unit holder makes payments in relation to building safety expenses to meet the building safety expenses income requirement. The amendments made by the clause are necessary to ensure that the commonhold legislation aligns with the Bill’s requirements.

Photo of Mike Amesbury Mike Amesbury Shadow Minister (Housing, Communities and Local Government) 11:45 am, 21st October 2021

I want to address a couple of points, for clarity. I thank the Minister for the explanation. Her Majesty’s official Opposition support commonholds and have argued for them for a long time. I am pleased to see the emerging consensus as we listen to stakeholders, whether the Leasehold Knowledge Partnership, the national leaseholder campaign or others in the housing sector. I have one question in relation to the Minister’s opening narrative. In commonhold, are building safety expenses on top of the building safety service charge?

Photo of Eddie Hughes Eddie Hughes Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)

I completely understand. No, that is not separate; it is one of the items that would typically be covered by the building safety charge in other buildings. Exactly the same principle applies.

Question put and agreed to.

Clause 122 accordingly ordered to stand part of the Bill.