"The main aim of the BSA is to make sure buildings are safe."
The purpose of a BLO is to prevent par- ties avoiding liability by working through SPVs, so a BLO target lays itself open to a BLO being made. The main aim of the BSA is to make sure that buildings are safe. So maybe a BLO is more likely to be made if the current owner can’t afford to do the works. The other side of this is that if the current owner is well able to afford to do the works but the BLO target is not, then maybe a Court would be less inclined to grant a BLO, particularly if the BLO target is already exposed to claims under the BSA from other parties. The above are guesses and more finessed detail comes out of one of the very few cases on this, Wilmott Dixon -v- Prater and others 21 March 2024 (unreported) where the Technology and Construction Court held as follows.
Developers are used to a 12-year liability, they now need to get used to 15 and even 30-year liabilities. That means keeping records of projects for more time.
The innocent disposal of the assets of the developer’s SPV does not prevent the granting of a BLO being just and equitable. The BLO target’s having adequate PI insurance can render the granting of a BLO against them more likely.
Potential BLO targets will need to be insured.
However there has yet be any very useful caselaw on this, so currently the risk of being the target of a successful BLO is uncertain.
A BLO target can itself apply for a BLO against other BLO targets.
So, what to do?
chris.snodin@haroldbenjamin.com
An interesting lacuna in section 130 of the BSA is that only a company can be liable under a BLO. An individual cannot be made liable under it. So perhaps the owners of developers should elect to own the developer SPV personally rather than through the medium of group/intermediate companies. But that has wider tax and contractual consequences.
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