Section 117, Building Safety Act 2022  Meaning of “relevant building”

(1) This section applies for the purposes of sections 119 to 125 and Schedule 8.

(2) “Relevant building” means a self-contained building, or self-contained part of a building, in England that contains at least two dwellings and—

(a) is at least 11 metres high, or

(b) has at least 5 storeys. This is subject to subsection (3).

(3) “Relevant building” does not include a self-contained building or self-contained part of a building—

(a) in relation to which a right under Part 1 of the Landlord and Tenant Act 1987 (tenants’ right of first refusal) or Part 3 of that Act (compulsory acquisition by tenants of landlord’s interest) has been exercised,

(b) in relation to which the right to collective enfranchisement (within the meaning of Chapter 1 of Part 1 of the Leasehold Reform, Housing and Urban Development Act 1993) has been exercised,

(c) if the freehold estate in the building or part of the building is leaseholder owned (within the meaning of regulations made by the Secretary of State), or

(d) which is on commonhold land.

(4) For the purposes of this section a building is “self-contained” if it is structurally detached.

(5) For the purposes of this section a part of a building is “self-contained” if—

(a) the part constitutes a vertical division of the building,

(b) the structure of the building is such that the part could be redeveloped independently of the remainder of the building, and

(c) the relevant services provided for occupiers of that part—

(i) are provided independently of the relevant services provided for occupiers of the remainder of the building, or

(ii) could be so provided without involving the carrying out of any works likely to result in a significant interruption in the provision of any such services for occupiers of the remainder of the building.

(6) In subsection (5) “relevant services” means services provided by means of pipes, cables or other fixed installations.

Commencement: 28 June 2022

Applies to England and Wales

This is the first key definition.

The Building Safety Act 2022 is littered and peppered with “relevant” people and things, from relevant landlords through relevant times to relevant measures.

Here, in section 116, we have the “relevant building”. It is a peculiar combination of features, not all of which have an obvious basis for inclusion.

The first point to bear in mind is that this section defines “relevant building” only for the purposes of sections 116 – 125 and Schedule 8. References to a relevant building outside of those provisions is not to this definition.

Let’s take it in stages. In order to be a relevant building, a building must:

• Be a self-contained building or part of a building;
• Be in England;
• Contain at least two dwellings;
• Be at least 11 metres or 5 storeys high, and
• Not be excluded by subsection 3.

Self-contained

“Self-contained” is explained in subsections (4) to (6). So far as I can see, the definition has been lifted wholesale from the Right to Manage sections of the Commonhold and Leasehold Reform Act 2002, which lifted the definition from the collective enfranchisement provisions of the Leasehold Reform Housing and Urban Development Act 1993.

In its report on reforming the Right to Manage, the Law Commission questioned the incorporation of the definition into the 2002 Act from the 1993 Act. It said, at paragraph 3.45:

3.45 In addition, some of the criteria do not appear to be suitable for the RTM; they appear to have been transposed from the collective enfranchisement legislation, despite the fact that different policy considerations apply to enfranchisement and to the RTM. For example, the requirement for a self-contained part of a building to have a “vertical division” is used in collective enfranchisement to protect freehold title and avoid “flying freeholds”. This is not a concern in the context of the RTM. The requirement that a part of a building be capable of being redeveloped independently is understandable in the context of enfranchisement, in which it is important that all parties have certainty as to precisely what title is to be transferred. But it seems unnecessary in the RTM context, given that an RTM company would not acquire the authority to redevelop the part in any case. The same criticism can be levelled at the requirement for services to be capable of being separated.

It seems to me that the same probably applies to the Building Safety Act 2022. It is difficult to see why a building should be self-contained before its leaseholders can benefit from any of the protections in Schedule 8.

That said, we do at least have a body of case law on the meaning of “self-contained” – it has been much litigated under both the 2002 and the 1993 Act, so we can at least hope that we have a pretty good idea as to what constitutes self-containment.

Dwellings

My next query concerns the requirement that a building contains at least two “dwellings”. In its report on reform to the law of enfranchisement, the Law Commission uses “residential unit” as a neutral description for property in which one can live, and indeed, the 2022 Act itself uses the phrase in Parts 2 and 4.*

I’ll return to the meaning of “dwelling” in more detail in my post about section 119.

Height

Finally in subsection 2, we have a height requirement. A building must be at least 11 metres high or have at least 5 storeys. The methodology for measuring a building is set out in section 118.

Suffice it to say that we are going to need to hold different building heights in mind, depending on the Part of the Act with which we are dealing.

So whereas Part 4 of the Act concerns “higher-risk buildings”: they are 18 metres or at least 7 storeys high, Part 5 reduces the ceiling to 11 metres or 5 storeys.

Exclusions

A building is not a “relevant building” if the leaseholders have exercised the rights that Parliament has given them to buy the freehold pursuant to:

• the rights of first refusal provisions of Part 1 of the Landlord and Tenant Act 1987;
• the right to an acquisition order under Part 3 of the Landlord and Tenant Act 1987;
• the right to collectively enfranchise under Chapter 1 of Part 1 of the Leasehold Reform Housing and Urban Development Act 1993.

All other forms of leaseholder-ownership are swept up in the subsection 3(c) in the phrase “if the freehold estate in the building or part of the building is leaseholder-owned (within the meaning of regulations made by the Secretary of State)”.

Finally, a building owned commonhold is not a relevant building.

In summary therefore, any building owned by leaseholders, through a company or otherwise, cannot be a “relevant building”.

Why those exclusions?

Why are leaseholder-owned buildings excluded from the definition of “relevant building”?

The reason becomes clear in Schedule 8. In certain circumstances, if a building is a relevant building, no service charge is payable the leaseholders of that building.

By “leaseholders”, I mean leaseholders in their capacity as leaseholders, rather than leaseholders in their capacity as shareholders in the company that owns the freehold, or as freeholders individually.

It is vital to keep an individual’s various hats on separate pegs as the Court of Appeal explained in Di Marco v Morshead Mansions Ltd [2008] EWCA Civ 1371.