29 September, 2023
The introduction of the Building Safety Act 2020 (BSA) is a significant milestone in ensuring the safety and integrity of residential and commercial properties.
One of the corner stones of the BSA is the "Golden Thread" principle, which means that the right people have the right information during the design build stage, before anyone gets into occupation. It is critical for a property owner or developer to ensure they are able to see the golden thread throughout the build. When the property is sold or refinanced at the conclusion of the build, the relevant parties will want to ensure that this has been done.
When purchasing new assets this will require stronger and tighter Due Diligence by the buyer's advisors at the investigation stage in order to protect stakeholder interests. There should be a digital record available showing the various stages of the build that can be used.
Additionally the Act provided the establishment of the Building Safety Regulator (BSR). The BSR acts as a guardian of safety, ensuring that buildings are constructed and managed safely. In the context of commercial property, this signifies a profound shift in accountability. Commercial property owners and managers must now engage with the BSR in a transparent manner, from design, through construction and to occupation. This oversight brings greater accountability, ensuring that commercial properties are built and maintained to the highest safety standards. It reduces risks for occupants and protects property values.
As we look to the future, it is evident that compliance with the Act will become a competitive advantage for commercial property owners. Those who invest in safety will reap the rewards of tenant confidence and property value retention. Inevitably with new legislation there are challenges with this; there are concerns that the industry will be unable to move quickly enough to keep up with the additional burdens, and that there are not enough professionals available to service client. As has been said above, the additional due diligence may bring with it complexities in the sale and purchase process, and if the relevant ground work has not been done effectively, potential additional delays. Sellers and Landlords are advised to get matters in order in plenty of time before reaching a critical stage in negotiations.
The BSA has ushered in a new era for commercial property in the UK. With it brings increased accountability and safety to the forefront of commercial property management. As the Act is implemented and evolves, despite the challenges it will undoubtedly shape the future of commercial property, hopefully fostering a safer and more prosperous environment for businesses and tenants alike.
For more information contact Matthew Jones in our Construction & Infrastructure department via email or phone on 01254 222316. Alternatively send any question through to Forbes Solicitors via our online Contact Form.
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