The new change control regime introduced under the Building Safety Act 2022 could make allocating and managing contractual risk significantly more challenging. Long underused digital tools might provide some help.

Getting to grips with the detail of the new building control regime introduced by the Building Safety Act 2022 (the BSA) and secondary legislation continues to challenge all practitioners in the construction sector. A key feature is the introduction of gateways at the planning, commencement and completion stages of Higher-Risk Building (HRB) projects. Such projects now have known, unavoidable regulatory interfaces for which rigorous preparation and planning is needed when programming and pricing projects, if building control applications to the Building Safety Regulator (BSR) are to succeed.

The new regime, however, also introduces a new approval system for change control for HRBs administered by the BSR (see Part 3 of the Building (Higher-Risk Buildings Procedures) (England) Regulations 2023/909 (SI 909)). Change in the course of a construction project, some might say, is to be expected (if not inevitable), and it is, perhaps, unrealistic to assume otherwise. Predicting such changes is not, however, a precise science – which is why we build processes to handle variations and changes into construction contracts. This means the new change control regime could make allocating and managing contractual risk significantly more challenging.

The change control regime

Part 3 of SI 909 requires the client to record and revise agreed documents to reflect the changes. It also requires an application to the BSR to approve certain controlled changes that are proposed in respect of HRBs after building control approval has already been given. Such changes include deviations from the approved plans, changes to a stage of HRB work and certain changes to agreed documents. Regulation 26 (SI 909) sets out and defines three change categories: major, notifiable and recordable. In summary:

• Major changes (such as a change to the height of a proposed HRB) require a client to obtain prior BSR approval. The process involves submission of a change control application in prescribed form, signed by the client and containing:
  • a description of the change;
  • reasons for making it;
  • details of the advice sought in relation to that change;
  • an assessment of the agreed documents affected by the proposed change; and
  • an explanation of how the building will be compliant once the change has been made.

The BSR can request further information. If it does not determine the application within six weeks, the application is effectively rejected. The client can apply to the Secretary of State for determination under Section 30A of the Building Act 1984, although there is no set time period for the Secretary of State to decide such applications;

• notifiable changes (such as a change to a flat layout in a proposed HRB) require a client to notify the BSR in writing of the change and submit certain prescribed documents;
• recordable changes are any controlled changes that are neither a major nor a notifiable change. These only need to be recorded and will be part of what the BSR reviews when the application for a completion certificate is made at Gateway 3.

The rationale behind the BSA is clear: changes to BSR-approved plans must be building regulation compliant. What is also clear, however, is that the client and other dutyholders under the BSA will be concerned that these new processes could cause delay and increase contract risks.

Notifiable changes – “at risk” or always risky?

A particular risk could arise when managing notifiable changes rather than major ones. In this case, the client’s responsibility is to “notify” the BSR of the change before continuing the works. There is no prescribed period for the BSR to reply to such notification and, crucially, no “deemed approval” period. The client might not know if the BSR agrees with the change categorisation until applying for a Gateway 3 completion certificate. If, at that point, the BSR disagrees and regards the change in question to be major, the consequent potential delay to completion certification (and occupation) could be a significant issue.

Some commentators think that proceeding on the basis that the change is notifiable (without waiting for the BSR’s opinion) puts the client “at risk”. However, does the phrase “at risk” send the wrong message to risk-averse clients? Remember that clients are reliant on their advisers’ advice that the change is both notifiable and building regulation compliant. Perhaps a better view is that responsibility for ensuring building regulation compliance sits with the client (rather than the BSR) except when seeking approval of a major change.

Given the potential issues, taking an open, collaborative approach and contacting the BSR to discuss whether a change is major or notifiable may assist. This approach is already used when dealing with other regulators, such as the FCA in the UK regulatory finance sphere. While we are in the early days of implementation and do not yet know how much weight can be placed on such discussions with the BSR responses, early indications suggest the BSR may be willing to engage in this way.

How to manage the new change processes

The new change control process will mean increased administration (and possibly delay) during the construction phase if changes, particularly major, occur. Clients will need to keep in mind that any programme disruption caused by the new processes mid-project is potentially nothing compared to the knock-on effects of the BSR identifying non-compliance at Gateway 3. Besides, there are both practical and contractual solutions for managing change-related delay risks.

Getting the initial design right is an obvious suggestion for avoiding disruption down the line, but this may be impractical or costly. This is where technological advances employed at a project’s outset could help reduce the risk of major changes.

An example is Building Information Modelling (BIM). Creating a complete and integrated digital model of a construction project (previously referred to as a “Level 3” BIM model prior to the revamping of BIM language under ISO 19650) would allow testing of the proposed structure to identify design clashes. Applying building physics modelling would also allow the client’s team to make sure the proposed design will deliver compliance with what the client wants in practice. Any issues could then be identified before the building control approval application is submitted at Gateway 2 and construction begins.

Detailed BIM modelling is not something the industry has widely embraced to date, largely due to the costs involved. However, some clients might now regard this as a preferable, more cost-efficient investment to hedge against the uncertainty of mid-construction changes.

From a contractual standpoint, clients could consider provision for:

• extra time within project programmes to allow for the submission of applications for major changes;
• flexible mechanisms for granting extensions of time while awaiting a BSR decision; and
• termination rights in the event of application rejections by the BSR.

The new regime presents an undeniable challenge for the construction industry, but one that does not need to be viewed negatively. Project teams taking greater responsibility for a project’s building regulation compliance at all steps in the construction process under the BSA might be daunting but parties can manage the contractual risks and, in the process, help modernise construction processes and kickstart the adoption of long-underused digital tools.

With thanks to Katie Percy for her contribution to this article.

This article was first published by Construction Law on 1 March 2024.