Although the new Social Housing Act does not specifically target the construction sector, it will indirectly impact it due to the enhanced compliance requirements that will be placed on providers of affordable housing, writes Ben Brooks.
As the SHRA 2023 became law, Michael Gove described it as the “first important step to righting the wrongs of the past“.
How the new law works
The SHRA 2023 is not a standalone piece of legislation. Instead, it amends and supplements existing housing laws, so these must be read together.
The amendments it makes are largely to the Housing and Regeneration Act 2008 (HRA 2008). However, there are also amendments to the Housing Act 1996, Housing and Planning Act 2016 and Landlord and Tenant Act 1985.
Also, while the SHRA 2023 is the starting point, there will be many more standards, directions and regulations to follow.
What do you need to know about the new law?
Here are six key takeaways from the 60-page long SHRA 2023:
- Who the SHRA 2023 affects. The SHRA 2023 is specifically targeted at providers of affordable housing (POAHs), not the construction industry. However, it will almost certainly have an indirect effect on the construction sector due to the enhanced compliance requirements that will be placed on POAHs. As the new legislation beds in, and as the Regulator utilises the enhanced powers given to it by the SHRA 2023, it is likely that POAHs will look to improve standards during the construction phase to minimise risks during the management phase. This could result in POAHs:
- Requesting better specifications or construction materials with better durability.
- Requesting higher retentions and longer defects liability periods, and being more demanding during defects liability periods.
- Potentially requesting indemnity clauses in contracts for specified periods, in case enforcement action is taken by the Regulator over the standard of the housing due to defects attributable to the developer or contractor.
The Regulator is expected to shortly publish its consultation on new consumer standards, which is expected to go live in April 2024, and the industry will have a better idea of potential impacts after these are published.
- Health and Safety Lead. POAHs will be required to appoint a ‘health and safety lead’ to monitor compliance, and assess and report on risks and failures. There is a whole suite of requirements around this and the Regulator has new powers to enforce for non-compliance. It would not be surprising for these newly appointed health and safety leads to get involved at construction or handover phase and there may be further guidance issued around this.
- Regulator powers. The Regulator will have increased powers to set standards and monitor performance in relation to competence, conduct, information-keeping and transparency. It will also be able to give directions about performance information and make inspection plans for those bodies the Regulator considers needs them. If the Regulator then believes that a POAH is not meeting standards, it can issue performance improvement plans (after notice) and if standards still fall below the Regulator’s expectations or if there is any obstruction to the Regulator, there are enhanced enforcement and penalty provisions.
- Surveys and emergency repairs. The Regulator may now carry out surveys as it deems necessary (with such equipment and personnel as it needs) without a warrant on giving at least 48 hours’ notice to the POAH and occupier (if any). The Regulator can also obtain a warrant if needed. If a survey reveals issues that need remediation, the Regulator may exercise its new powers already mentioned above. Additionally, there are new powers enabling the Regulator to take emergency action on 24 hours’ notice if:
- A survey has been carried out; and
- The Regulator is satisfied that the POAH has failed to maintain the premises in accordance with the new standards and that there is an imminent risk of serious harm to the health and safety of occupiers; and
- The POAH has failed to comply with an enforcement notice.
These provisions are a cornerstone of the SHRA 2023 and provide important powers to stop tragedies like Awaab Ishak’s death from happening again.
- Housing Ombudsman. There will be additional Housing Ombudsman powers to publish best practice guidance to landlords following investigations and a closer working relationship between the Regulator and the Housing Ombudsman, evidenced by a memorandum that shall be prepared and updated, detailing their respective functions.
- Other noteworthy provisions. The SHRA 2023 introduces many other provisions, including:
- New qualification requirements for housing managers.
- Appeals in relation to most decisions made by the Regulator must now happen within 28 days (there was no time limit previously).
- The previous £5,000 penalty limit in the HRA 2008 has been replaced with an unlimited penalty.
- Various new provisions allowing the Regulator to reclaim its costs for actions it undertakes under the SHRA 2023.
Landmark law in practice?
Gove described the SHRA 2023 as a landmark set of laws. However, the proof will be in the pudding on whether the Regulator can fulfil the bigger role given to it and whether standards of social housing improve in the UK.
For the construction sector, it should prepare for POAHs requesting higher standards during construction, and further government guidance specifically for the construction sector cannot be ruled out.
Ben Brooks is associate at Womble Bond Dickinson
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