RAAC and the Building Safety Act 2022

The potential failure of reinforced autoclaved aerated concrete panels in schools made front-page news back when term started in September. The problem has not gone away. And it’s not just schools and hospitals that are affected: any building constructed from the 1950s to the 1980s could potentially include RAAC in its floors, roofs and wall panels. Identifying RAAC While the Department for Education and other government departments have commissioned surveys to identify and quantify the risk of RAAC across their portfolios, many commercial real estate owners and occupiers simply do not know if RAAC is present in their buildings. Building surveys of the kind which may identify RAAC are typically only commissioned when there is a property transaction and, unless a surveyor is specifically appointed to check for RAAC, many owners and occupiers may not become aware of any potential risk. The Building Safety Act 2022 requires anyone with responsibility for the common parts, or structure and exterior of a “higher-risk building” (ie one which is at least 18m or seven storeys high and contains at least two dwellings) to assess and manage “building safety risks”, and produce a safety case report detailing the steps they have taken. “Building safety risks” are not limited in the 2022 Act to the spread of fire, but also include the risk of structural failure. The government guidance accompanying the 2022 Act also emphasises the need to manage “any materials or techniques with known challenges”. While this may originally have been intended to focus in particular on certain types of cladding, RAAC could meet that description and so landlords may be required to commission these kinds of surveys. RICS guidance The Royal Institution of Chartered Surveyors has included guidance on RAAC on its website, primarily to help members of the public who may be concerned about RAAC, providing links to external sources and further reading. Substantive guidance for RICS surveyors is contained in the current RICS professional standard Technical Due Diligence of Commercial Property (January 2020). Section 5.11 relates to deleterious materials and states that the surveyor is expected to identify hazardous and dangerous materials from visual inspection or by reference to documents and make recommendations for further inspection or testing. As most RAAC panels are concealed behind finishes such as plasterboard, they can often only be identified through intrusive surveys, involving cutting numerous access holes to check the concrete slab visually and physically. This goes beyond the typical scope of a technical due diligence survey – indeed most surveyors will caveat reports specifically to say no opening up was undertaken – and specific instructions for this would need to be given. The landlord and tenant perspective RAAC can cause issues in the leasehold context. For example, RAAC identified in the roof deck of retail units in a shopping centre could, depending on the wording of the lease, be either the landlord or the tenant’s repairing responsibility. Where tenants are not responsible for repairing the structure, they are increasingly requesting urgent confirmation from their landlords that RAAC is not present in their building, requiring their landlords to carry out intrusive surveys to give an accurate response. Conversely, proactive landlords are writing to tenants of full repairing and insuring leases to highlight the potential problem and ask them immediately to take any necessary remedial action. There is also an increasing focus on RAAC during the technical due diligence process, with buyers requesting written confirmation from owners that RAAC is not present in the building. Who is responsible? Responsibility for repairing RAAC is rarely clear-cut and, in some circumstances, will depend on the mechanisms of failure. As RAAC can fail as a result of several different factors either acting in isolation or combination, apportioning responsibility and cost is far from straightforward. RAAC in a building may be an inherent defect due to errors in design or installation during construction, such as including insufficient end bearings or supports for RAAC planks or misplaced reinforcement, which place them under stress and could lead to collapse. Similarly, where RAAC planks have been cut to size on site – perhaps because a plank doesn’t quite fit or because a pipe is in the way – its structural performance may be compromised. RAAC can also fail because of disrepair or a lack of maintenance. A key cause of failure is water causing corrosion of the steel reinforcement. As RAAC planks are commonly used for flat roof decks, failure of the waterproofing will allow water to penetrate and soak into the aerated concrete mix resulting in corrosion. Similarly, RAAC disrepair can occur where tenants undertake alterations, and cut into the RAAC panels for service routes or overload them with air-conditioning plant. Key issues for surveyors Building surveyors need to be very careful when inspecting buildings. RAAC is often not easily apparent and can be hidden behind finishes, so they will need to make property owners aware of the need to open up and drill into suspect areas in order clearly to identify the risk. There are several guidance notes published by the Department for Education, National Health Service and others on the risk assessment for RAAC and whether remedial works are needed. Who pays for these works will be down to an assessment of the failure mechanism, lease structure and extent of works required. Does the 2022 Act provide any recourse? The lease is always the first port of call when considering who is responsible for repairing or replacing RAAC, and who pays. However, leaseholders may be able to compel their landlords to carry out, or pay for, remedial works through the unlikely channel of the 2022 Act, which imposes additional obligations on landlords (and others) to those set out in the lease. The 2022 Act was introduced following the Grenfell Tower fire tragedy, so was rightly targeted at ensuring fire safety. However, its provisions on “building safety risks” address not only the risk of fire, but also structural failure or the collapse of the whole or part of a building. RAAC could potentially be such a risk. Remediation and contribution orders The 2022 Act gives tenants, and anyone with a legal or equitable interest in part of a “relevant building” (ie one which is at least 11m or five storeys high with at least two dwellings) containing “relevant defects” the right to apply to the First-tier Tribunal for redress. Relevant defects arise from anything done (or not done) or used (or not used) in connection with the construction or conversion of a building or any subsequent works to it carried out in the 30 years up to 28 June 2022 which cause a building safety risk – including structural collapse. This could include RAAC used in the construction of a building which now poses a risk of structural collapse, even if that was not originally intended by the draftsperson of the 2022 Act. The FTT can make a “remediation order” requiring the landlord to carry out specified remedial works or a “remediation contribution order” compelling the developer, current landlord, or whoever was the landlord as at 14 February 2022 – and associated entities – to contribute to the cost of works. The FTT has already exercised its powers, and imposed both types of order on landlords for fire defects. Where a building contains RAAC which is at risk of collapse – particularly where it is within the roof or structure of the building – landlords may, therefore, be compelled to replace it, or contribute to the cost of doing so. An extra layer of protection? We are yet to see whether tenants facing problems with RAAC will seek recourse under the 2022 Act or whether the FTT is willing to deploy its powers under the Act to compel a landlord to remediate a RAAC issue or contribute to the cost of works. Many buildings where RAAC is typically found will not fulfil the height criteria of a “relevant building” attracting this protection, which may also limit its use. Nonetheless, where RAAC is found in a relevant building, the 2022 Act could provide an extra layer of protection for tenants and much more force to an argument that the landlord must, at least, assess and manage the RAAC and potentially remove it entirely. Matt Neave is a partner in the building consultancy & lease exit team at Gerald Eve and Katie Dunn is a senior associate in the real estate disputes team at Hogan Lovells Image: Maureen McLean/Shutterstock