Defective Premises Act (Northern Ireland) 2024

Background

The Defective Premises Act (Northern Ireland) 2024 has now received Royal Assent, providing residents of Northern Ireland with some of the same protections for defective dwellings as those effected in England and Wales under the Building Safety Act 2022 (the “BSA”).

The introduction of the legislation was sparked by residents in Victoria Square being forced to evacuate 91 apartments after structural issues were detected. As the scheme was completed in 2008, the High Court found the claims to be outside the 6 year limitation period and so were out of time. The legislation is designed to address this anomaly.
The Defective Premises Bill successfully passed its final stage in the Northern Ireland Assembly just four months after its introduction and took effect on 21 September 2024, the day after it received Royal Assent.

 

What changes will occur?

The Defective Premises Act (Northern Ireland) 2024 (the DPA) applies to work carried out on buildings consisting of or containing one or more dwellings and has 2 main limbs:

• Limitation periods: Previously, Northern Irish citizens received only 6 years of protection relating to defective buildings. The amendments mean that the liability period on claims for defects are extended to 15 or 30 years depending on the circumstances.
  
  
• Duty of care: persons to which duties are owed in the carrying out of construction works for one or more dwellings are extended.
  
  

Concerns

The Defective Premises Act (Northern Ireland) 2024 aims to align Northern Ireland’s legal position with England & Wales but it is essential to recognize that not all measures in place there are being introduced in Northern Ireland which has resulted in an influx of concerns.

• Additional insurance premiums: The legislation is likely to impact the cost of insurance products, such as professional indemnity for designers. However, ministers have provided reassurance that the industry in England and Wales has adapted to this. Additionally, insurance products have been rising exponentially in the current economic climate and therefore the blame for rising costs cannot solely fall on the legislative environment.

• Funds to pay awards: in England & Wales there have been issues with professional indemnity insurers providing coverage for claims that arose from incidents or advice given more than 30 years ago.
  
  Many professional service providers within Northern Ireland do not operate very large companies and are mainly micro-SMEs (up to ten) or sole practitioners. They will simply not have the capital to fund uninsured losses for remedial work over which they had no influence or control, nor the cost of dealing with claims.
  
  
• Smaller Jurisdiction: Firstly, the NI construction industry is much smaller than England & Wales, consisting of many small builders and small professional practices (such as designers, architects, building surveyors). They will be exposed to the same risks that the much larger construction industry across the water regularly shoulders and concerns arise whether NI can cope with the same pressures.
  
  
• Less legislative protection: There are concerns that that the DPA will mean that Northern Irish citizens are not afforded the same protection as those in England & Wales under the Building Safety Act 2022 due to the disparities outlined below).
  
  
• Defective materials: Under the Defective Premises Act (Northern Ireland) 2024, carrying out ‘work’ means building or design work, and involves contractors and designers. This does not include suppliers or manufacturers of defective materials (such as MICA blocks) as they do not carry out ‘work’.
  
  This is problematic as materials that can be found in concrete blocks, including mica, pyrite, reinforced autoclaved aerated concrete (RAAC), have led to severe structural problems in thousands of homes in both ROI and NI, destroying several domestic premises.

 

Building Safety Act 2022

Notably, the BSA runs to over 300 pages whilst the NI version is a few paragraphs. Thus many protections provided for England and Wales will not be applied to NI citizens as it is much less wide ranging.

In due course, a wider package of legislation in Northern Ireland will be needed, like the Building Safety Act 2022 in England and Wales, but, for now, Ministers have stated that the DPA has been introduced to address establishing parity on the period of liability.

 

Differences between the Defective Premises Act (Northern Ireland) 2024 and the Building Safety Act 2022.

The Defective Premises Act (Northern Ireland) 2024 aims to reflect sections 134 and 135 of the Building Safety Act 2022.

The DPA introduces the same liability period, prospectively and retrospectively, as currently exists in England and Wales. However, the differences are widespread:

 

1. Building liability orders

Under section 130 of the 2022 Act, the High Court has a right to make a building liability order, which extends the specific liabilities of one body corporate to an associated company, making them jointly and severally liable.

This opened potential liability exposure for past and future projects as it opens the possibility for associated companies, who were not involved in the works, to be held jointly and severally liable. This effectively pierces the corporate veil, which group company structures have historically relied upon and holds material suppliers to account for defective materials as discussed below.

 

2. Holding material suppliers accountable for defective materials

Unlike the Building Safety Act 2022, the DPA does not make provision for Companies limiting liability by establishing a Special Purpose Vehicle (SPV) to deliver a particular development.

The DPA will not hold suppliers of defective materials retrospectively liable and construction companies that established SPVs will fall outside the reach of the legislation.

As highlighted above, in Northern Ireland, this is potentially problematic due to the mica case as suppliers or manufacturers of defective materials (including MICA blocks) are not accounted for under the DPA.

 

3. Higher Ranging Buildings

The BSA was introduced in England and Wales following the June 2017 Grenfell Tower Blaze in London. Hence, the legislation applies to all buildings, with additional requirements for high residential and high- risk buildings greater than 18 meters in height/ more than 7 storeys tall. Such additional requirements are not provided for under the DPA.

 

4. Fire Safety Measures

In residential buildings with two or more domestic premises, under Section 156 of the Building Safety Act 2022 the responsible owner must provide residents with information on the risks from fire in their buildings and the fire safety measures provided to keep residents safe. This is not included in the DPA.

This is the first step towards a wider suite of legislation, that will further match the protections provided to citizens in England and Wales under the Building Safety Act 2022 and ultimately further reduce the disparity that exists in Northern Ireland.