Building Safety… in Contracts: Compliance and Risk Allocation

In this second article in our Building Safety series, we explore the key contractual implications of the BSA, focusing on dutyholder roles, regulatory gateways, information management, and strategic drafting.

A cornerstone of the BSA is the formalisation of dutyholder roles, specifically the principal designer and principal contractor, for all building work. While these titles echo those under the Construction (Design and Management) Regulations 2015 (CDM), their functions under the BSA are distinct and more demanding.

• Principal Designer: Responsible for planning, managing, and monitoring the design phase to ensure compliance with building regulations.
• Principal Contractor: Oversees the construction phase, ensuring that building work complies with safety requirements and (where applicable) that the golden thread of information is maintained.

Both dutyholders must demonstrate competence, defined by skills, knowledge, experience, and behaviours appropriate to their role. This introduces a new layer of contractual risk: if a dutyholder fails to meet these standards, liability may extend to the client or other parties.

Clients must verify the competence of appointed dutyholders and clearly define their responsibilities in contracts. This includes setting out obligations to comply with the building safety dutyholder obligations, maintain safety documentation, engage with the Building Safety Regulator (BSR), and comply with gateway requirements, as may be required.

For buildings classified as “higher-risk” (typically residential buildings over 18 metres or with at least 7 storeys), the BSA introduces a three-stage gateway process administered by the Building Safety Regulator (BSR):

1. Gateway One: Planning stage—requires fire safety information to be submitted.
2. Gateway Two: Pre-construction—BSR approval of detailed plans and safety strategy.
3. Gateway Three: Completion—BSR must be satisfied before occupation.

Each gateway introduces potential delays, costs, and regulatory scrutiny. Contracts should therefore address:

• Responsibility for submissions: Who prepares and submits documentation to the BSR?
• Risk of delay: What happens if gateway approval is delayed or refused?
• Cost allocation: Who bears the cost of redesign, resubmission, or compliance failures?

Compliance is particularly important as failure to obtain a completion certificate from the BSR will prevent a building from being occupied.

It is best practice to include express provisions in contracts allocating responsibility for gateway compliance, setting out timelines, and defining remedies for delay or non-compliance. Parties may consider liquidated damages, indemnities, or step-in rights where appropriate to drive compliance and allocate risk.

The “golden thread of information” is a digital record of a building’s design, construction, and maintenance, required for all higher-risk buildings. It must be:

• Accurate: Reflecting the building as constructed.
• Up-to-date: Continuously maintained throughout the lifecycle.
• Accessible: Available to dutyholders, regulators, and residents.

Failure to maintain the golden thread may result in enforcement action, refusal of gateway approvals, or civil liability.

Contracts should require all parties, designers, contractors, consultants, to contribute to the golden thread. This includes obligations to upload documents, maintain version control, and ensure data integrity. It may also be sensible to consider linking payment milestones to information delivery.

Building safety is no longer a technical compliance issue, it is a legal and financial risk that must be embedded in contract strategy. Key drafting considerations include:

• Scope of services: Ensure dutyholder roles are clearly defined and aligned with BSA requirements.
• Compliance warranties: Include express warranties of compliance with the BSA and related regulations.
• Indemnities and insurance: Address liability for safety breaches, regulatory enforcement, and historic defects if necessary, and consider liability periods.
• Termination rights: Consider rights to terminate or suspend contracts if gateway approvals are delayed or refused.

The BSA has elevated building safety from a technical concern to a contractual imperative. Contracts must be drafted to reflect the new obligations, allocate risks appropriately, and ensure that all parties understand their responsibilities under the BSA. Parties must also adapt to new dutyholder roles, navigate enhanced regulatory processes, and maintain comprehensive safety information to manage compliance and risk effectively. Failure to do so may result in costly disputes, enforcement action, and reputational harm.

RWK Goodman’s team works closely with all those involved with construction projects to ensure building safety forms a seamless thread throughout all documentation ensuring that all parties are aware of their rights and obligations, and that risk is allocated fairly and pragmatically.