Cladding remediation legislation passed in Scotland

The Housing (Cladding Remediation) (Scotland) Bill was passed by the Scottish Parliament on 14 May 2024.

The bill gives the Scottish Ministers far reaching powers to identify external wall cladding systems on residential buildings that create or exacerbate risks to human life and to address those risks. It is hoped that the new legislation will help to speed up cladding remediation work in Scotland.

As the bill has progressed through the Scottish Parliament some changes have been made. These include: an additional work assessment being added, pre and post engagement with owners and occupiers, a requirement for the Scottish Ministers to consult before making any Regulations establishing a responsible developers scheme and for the Scottish Ministers to publish progress reports.

The Scottish Government also announced on 19 April 2024 that it had secured powers to introduce a Scottish Building Levy. The tax will apply to developers who are constructing new residential buildings. The revenue will be used to help fund the cladding remediation programme.

Type of buildings included

The bill applies to buildings which are:

• Flatted buildings containing at least one residential unit (a building with both residential and commercial elements could therefore fall into this category)

• Constructed, or refurbished, between 1 June 1992 and 1 June 2022

• 11 metres and over in height; and

• Incorporate a form of external wall cladding system

There are around 780 high rise (over 18 metres) and an estimated 5,000 mid-rise (11 to 18 meters) buildings in Scotland. It is thought that about 49% of high-rise buildings and around 10% of mid-rise buildings will require some sort of remediation.

The bill gives the Scottish Ministers the power to change the definition for buildings which require a single-building assessment, so it is possible that this could be extended to other buildings. However, there is express provision in the bill preventing the definition being changed to include commercial buildings and buildings with no external wall cladding.

Single–Building Assessment and Remediation Works

Any building meeting the criteria will require to have a Single-Building Assessment (SBA) carried out. The Scottish Ministers will have the power to arrange for an SBA to be carried out. They will also have the power to arrange an additional work assessment (this is an assessment which is required where additional information comes to light after the SBA has been completed).

Seven days' notice requires to be given to the owner and the occupier of the premises and there is a right of appeal. As passed, the bill now includes provision for engagement with owners and occupiers. The Scottish Ministers will need to take steps to inform them where entry to a property is required; of the outcome of an assessment; when any remediation work is required and the progress of that work.

One of the practical issues with carrying out an SBA is likely to be access to the building. Accordingly, the bill includes provision to allow access to the premises and, if necessary, to obtain a warrant to enter the premises.

The Scottish Ministers will also have the power to arrange remediation work (there is a right of appeal), to arrange urgent remediation work without notice (no right of appeal) and the power to evacuate occupants (including without notice where there is a risk to life). 

The bill also includes provision for criminal offences for giving false or misleading information for the Register (the register is explained below), failing to give information required for an SBA or repairs and obstructing an SBA or works. If a person continues to occupy a building after being told to evacuate, that is also an offence which can result in a fine and / or imprisonment.

Cladding Assurance Register

The Scottish Ministers will implement and maintain a Cladding Assurance Register (the “Register”) to keep track of buildings which have had an SBA carried out. Once a building has had an SBA carried out, it can be entered in the Register.

The entry on the Register must contain the following information:

• When the SBA was carried out;

• What work was identified;

• When any additional work assessment was carried out and any work identified; and

• The date Scottish Ministers were satisfied the work was completed.

The Scottish Ministers will be able to add a building to the Register on their own initiative. It could also be possible for an application process to be set up for developers to apply for a building they are associated with to be added to the Register (subject to the SBA being carried out).

The Scottish Ministers will also have the power to obtain information which is required for carrying out single-building assessments or is necessary to maintain the Register.

The intention is for the Register to be publicly accessible, however, this is not expressly included in the bill. It is also assumed that it will be no fee to search the Register, but this is not specifically stated either.

Responsible Developers Scheme (the “Scheme”)

The Scottish Ministers will have the power to establish a Responsible Developers Scheme (this is similar to the Responsible Actors Scheme in England under the Building Safety Act 2022). There is little detail in the bill about the Scheme as it will be brought in by way of regulations. However, the bill that has been passed now requires the Scottish Ministers to consult with residential developers before making regulations.

The purpose of the Scheme is for people in the building industry to address, or contribute to the costs of addressing, “risks to human life created or exacerbated (directly or indirectly) by the external wall cladding systems of buildings that are wholly or partially residential”.

Members of the Scheme will be developers who have a connection to buildings with problematic cladding. Again, the detail of what “a connection” means will be set out in the regulations. The conditions of membership will also be set out in regulations (examples given are carrying out an SBA or additional work assessments, making a financial contribution to the costs of the assessments and any work and the provision of information.

Membership isn’t compulsory but if a developer doesn’t sign up to the Scheme then they can be added to the prohibited developers list. Until the regulations are published, it isn’t precisely clear what this will mean. However, it is envisaged developers will be prohibited from proceeding with developments or obtaining building warrants or completion certificates.

It is also anticipated that there will be “orphan buildings” where the original developer is no longer trading or refuses to participate in the Scheme. In these cases, the Scottish Government will step in and cover the costs.

Until there is more detail in relation to the Scheme, it is unclear exactly how this will impact on developers but the sanctions for not participating in the Scheme could be very disruptive to their operations.

What this means for you

For lenders, the introduction of a Register is likely to make it easier to check if a property in a building with external wall cladding is suitable security for lending and give lenders reassurance on this. However, concerns have been raised that there will still be delays for sellers and buyers and those remortgaging as it could take time for a building to appear on the Register.

If you are a landlord or tenant of a commercial premises as part of a multi-residential domestic building, when entering into a lease the Register should be checked and confirmation of responsibility for external walls, particularly for building wholly owned by the landlord, and ensure remediation works, if any, are accounted for.

Owners of premises included in the bill should be prepared for the possibility of access to their premises being required. It is also possible that there could be an increase in disputes where notices for remediation works are appealed. At the extreme end, the Scottish Ministers can obtain a warrant to eject occupants from a premises who has not removed following an evacuation order.

At present, where there is cladding on a residential property, it is noted on the Home Report for prospective purchasers (and solicitors) to be aware of. It is often accompanied by an enquiry with the seller to ensure there have been the necessary checks and an ESW1 certificate is available. It seems there will now be another requirement before putting your property on the market. In the future, the usual purchasing enquiries should also include confirmation that the seller has not received any notice in connection with this bill (akin to a notice of any proposed common repairs).

The provisions in the bill will be expanded on by way of regulations and so until those have been published, the practicalities of the legislation are not completely clear.

Contributor: Stuart McDonald

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at May 2024. Specific advice should be sought for specific cases. For more information see our terms and conditions.