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<p>The Building Safety Act 2022 provides that where a building's freeholder is - or
is linked - to the original developer, they must meet costs associated with historical
building safety defects in full and cannot pass on these costs to leaseholders.</p><p>The
Act refers to the position as at 14 February 2022, so any future buyer of the freehold
will assume the same liabilities of the previous freeholder. As such, freeholders
will not be able to simply sell off their buildings or transfer them to new companies
to evade liability.</p><p>Should the freeholder declare insolvency, the Act contains
provision allowing the appointed insolvency practitioner to apply to the court to
require companies associated with the freeholder, such as the parent company, to meet
the costs of remediation.</p><p>The Act also grants powers to the High Court and the
First-tier Tribunal allowing them to extend specific liabilities for one company to
associated companies, preventing developers and freeholders from evading their responsibilities
by using complex corporate structures such as special purpose vehicles.</p><p>The
Government has agreed with 45 residential property developers that they will fix life-critical
fire safety defects, including cladding, in all buildings above 11 metres that they
had a role in developing or refurbishing in the past 30 years. In these circumstances,
the ownership of the particular property will be irrelevant, as the liability to remediate
is with the developer group, even if the particular subsidiary that did the development
becomes insolvent.</p>
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