Building Safety Act 2022 - What It Means For Service Charges

Mark Fairweather, director of Fairweather Law
A note giving an overview of the impact the Building Safety Act 2022 (BSA), which received Royal Assent in April 2022, has on Service Charges

Part 1

Overview Of Leaseholder Protections In Relation To Service Charges[1]

The BSA introduces significant restrictions on service charges in connection with the costs of remediation of historic defects which cause a risk of fire or structural collapse. The government’s thinking is that innocent leaseholders, especially owner occupiers, should not have to contribute to the costs of remediation work where others are to blame. But not all leaseholders, not even all owner occupiers, benefit from all restrictions. 

The BSA has been supplemented by the Building Safety (Leaseholder Protections) (England) Regulations 2002/711 (referred to hereafter as SI 711) and the Building Safety (Leaseholder Protections) (Information etc.,) (England) Regulations 2002/859 (referred to hereafter as SI 859).

The exception for leaseholder owned buildings[2].

The leaseholder protections do not apply to buildings where leaseholders have exercised the right to collective enfranchisement or the statutory right of first refusal or where the freehold is otherwise leaseholder owned. What is meant by leaseholder owned has been further clarified by the SI 711.[3]

The exception for buildings which are less than 11 metres in height or less than 5 storeys[4].

The leaseholder protections do not apply to buildings which are less than 11 metres in height or less than 5 storeys. As you would expect, the legislation sets out detailed measuring rules.

The restrictions also do not apply unless the building is self-contained, that is either structurally detached or capable of independent development[5].

Qualifying Leases[6]  -  and the partial exception for buy to let owners.

The leaseholder protections generally[7] apply only to qualifying leases, as defined.

There are two elements to the definition.

The first concerns the lease. A qualifying lease is a long lease of a single dwelling under which the leaseholder is under an obligation to pay a service charge.

The second concerns the status of the leaseholder at the qualifying time which was 14 February 2022. At the qualifying time, the leaseholder must in respect of a specific leasehold dwelling have been:

  • An owner occupier; or
  • The owner of the specific leasehold dwelling (whether or not the owner’s home); or
  • The owner of not more than three dwellings in the UK, including the specific dwelling.

A buy to let owner with a portfolio of four or more dwellings will not therefore hold a qualifying lease of any of them, except if applicable in respect of the lease of their own home.[8]

(See also Part 6 below on Qualifying Lease Certificates).

Relevant Defects

The leaseholder protections introduced by the BSA provide one off protection against relevant historic defects, as defined.

There are two main elements to the definition:

The defect must be historic and specifically have arisen in the period from 29 June 1992 – 28 June 2022.[9]

The defect must cause a risk to the safety of people in the building as a result of:

  • the spread of fire
  • structural collapse.

The defect must have occurred in the course of work to construct or convert the building, or to remedy a previous defect. It can also have occurred in the course of any other work by the landlord or management company in the period 29 June 1992 - 28 June 2022[10].

Relevant Measures[11]

Where leaseholder protection applies, the general rule is that it protects leaseholders against the cost of relevant measures. Those are the costs of remedying relevant defects and the costs of

The exception to the rule is with the costs of cladding remediation, where a narrower definition applies (see below).

Part 2

The three main leaseholder protections

Where the landlord or an associate is responsible for the defect.[12]

Where the landlord is responsible for the defect no service charge is payable in respect of the costs of relevant measures.  Note that this protection applies to all residential leaseholders, not just leaseholders who hold qualifying leases. It also applies to leaseholders of commercial units in relevant buildings[13].

The main target here is the developer, where the developer is still the landlord. In the case of the costs of remedying initial construction defects, there are detailed provisions to bring associates of the developer within the scope of the provision[14].

The provision also however provides protection against defects arising from works (for example refurbishment works) carried out by subsequent landlords, even if unconnected to the developer.[15] Works carried out by associates of subsequent landlords do not trigger leaseholder protection in the same way as works carried out by associates of the developer. Similarly, works carried out by management companies do not appear to trigger protection. 

There is an important anti-avoidance provision. The protection applies to works carried out by whoever is the landlord at 14 February 2022 (the relevant landlord). If the relevant landlord transfers their interest to anyone else, that subsequent landlord stands in the relevant landlord’s shoes.  So anyone buying the relevant landlord’s interest in the building needs to carry out comprehensive due diligence to ensure that they will not assume significant contingent liabilities with the landlord’s interest. A prudent buyer of the landlord’s interest will also presumably insist upon an indemnity.  

Where the service charge is payable to an RMC or RTM company, the leaseholder protection still applies i.e. no service charge is payable, but the legislation provides a framework for future regulations by which service charges in these circumstances can be recovered from landlords.[16](see further below).

Where the landlord meets the contribution condition[17]

Where the landlord meets the contribution condition, no service charge is payable by the owners of qualifying leases in respect of the costs of relevant measures. Note that this provision only protects owners of qualifying leases, not all owners (in contrast to the position where the landlord is responsible for the defect).

The contribution condition is satisfied if the landlord’s net worth is above the threshold to trigger liability. Broadly speaking the concept is that if the landlord is deemed sufficiently wealthy to pay the costs of relevant measures, then the landlord should do so.

The landlord’s net worth is calculated by reference to the formula:  N x £2m where N is the number of relevant buildings (not less than 11m in height) owned by the landlord’s group. The details of how the formula is applied in specific circumstances is beyond the scope of this note[18].

Three possible scenarios arise:

  • The  landlord is to blame for the defect and satisfies the contribution condition
  • The landlord is not to blame but does satisfy the contribution condition.
  • The landlord is not to blame and does not satisfy the contribution condition. Further restrictions on service charges may protect leaseholders in this last scenario (see below).

Where the value of the lease is below the threshold for liability[19].

This protection applies only to owners of qualifying leases (see above).

Where the value of the lease is below the threshold for liability, no service charge is payable in respect of the costs of relevant measures.

The threshold of liability, in terms of the value of the lease is:

  • £325,000 for premises in Greater London
  • £175,000 elsewhere

The relevant valuation provisions are outside the scope of this note[20].

Where costs are to pay for cladding remediation[21]

This protection applies only to owners of qualifying leases (see above).

Where costs are to pay for cladding remediation, no service charge is payable. Cladding remediation is defined as: removal or replacement of unsafe cladding from the outer part of the external wall. The wider term ‘relevant measures’ does not apply to this leaseholder protection. Cladding remediation is much narrower in scope.

Where costs are to pay for the landlord’s legal and other professional services.[22]

This protection applies only to owners of qualifying leases (see above).

A landlord who is unable to recover remediation costs by way of service charges from leaseholders may wish to take legal or other professional advice – either to clarify the service charge liability of leaseholders or to pursue claims against other parties who have exposed the landlord to irrecoverable costs.

Notwithstanding any provision in the lease which says otherwise, no service charge is payable in respect of these costs.

Part 3

Leaseholder protection in other circumstances

The service charge cap[23]

This protection applies only to owners of qualifying leases (see above), and where the protections in Part 2 of this note are either unavailable or insufficient.

Where a service charge is payable in respect of the costs of relevant measures, it is capped.

The cap is:

  • £15,000 for premises in London
  • £10,000 for premises elsewhere.

There are detailed provisions in the legislation, beyond the scope of this note, which explain in more detail how the cap is calculated.

The annual limit[24]

Where the service charge cap applies, the annual amount payable is limited to 1/10th of the capped amount. So, for premises outside London, the annual limit will be £1,000.

The practicalities of arranging and paying for work where leaseholders pay by instalments may cause challenges for say RMCs organising urgent works but without the means to pay for them. The explanatory note to the legislation comments as follows: ‘this approach [the annual limit on the capped amount] is intended to maximise affordability for qualifying leaseholders who can be required to pay a capped contribution. Landlords who are responsible for organising remediation work will need to put arrangements in place to begin work and recover capped leaseholder contributions over time.’

Anti-Avoidance[25]

Where leaseholder protections apply, the landlord cannot circumvent these for example by:

  • seeking to recover costs from reserve funds which the landlord already holds;
  • increasing the service charges of other leaseholders

Part 4

Shortfalls[26]: where the consequence of leaseholder protections is that there are insufficient funds to pay the costs of remediation

The BSA provides a framework for regulations[27] to ensure that funds are available for remediation where leaseholder protections result in what would otherwise be a shortfall. The regulations are expressly stated to benefit RMCs and RTM Companies[28] (see also Part 5 below)

 A shortfall may arise where, for example:

  • The value of the lease is below the threshold for liability
  • The service charge contributions of leaseholders are capped
  • The annual limit applies
  • Costs are incurred for cladding remediation

 In these circumstances, the regulations envisage a waterfall of liability:

  • The landlord or where applicable the landlord’s associate responsible for the defect[29]
  • The (wealthy) landlord (group) that satisfies the contribution condition[30]
  • leaseholders, to the extent that they do not benefit from leaseholder protections.

If there is still a shortfall after giving credit for contributions from the above, the framework provisions of the legislation envisage a mechanism set out in the regulations for the fair allocation of the shortfall between all ‘relevant landlords[31].’

In a simple lease structure, where the freeholder of the building is the immediate landlord of the leaseholders (that is, the owners of the individual dwellings) there will be only one relevant landlord: the freeholder.

In a complex lease structure, where there may be a chain of leases between the freeholder and the leaseholders (that is the owners of the individual dwellings), all the landlords from the freeholder at the top of the chain to the leaseholders’ immediate landlord at the bottom are potentially ‘relevant landlords.’ All of the relevant landlords may be liable for a proportionate share of the shortfall.

RMCs and RTM companies do not fall within the definition of ‘relevant landlords’ i.e. they can never be required to contribute.

Part 5

Where the service charge is payable to an RMC or RTM Company

Where the service charge is payable to an RMC or RTM company, the leaseholder protection still applies i.e. no service charge is payable, but the legislation which provides for shortfalls (see above) also provides a framework for RMCs and RTM Companies to collect service charges from relevant landlords.[32]

Part 6

The Qualifying Lease Presumption[33] and Qualifying Lease Certificates

Landlords (and also RMCs and RTM Companies) will need to know if a leaseholder owns a qualifying lease. For this purpose, the starting presumption is that a long lease of an owner of an individual dwelling is a qualifying lease and that the full range of leaseholder protections therefore applies (see above).

When the landlord becomes aware that:

  • there is a relevant defect in the building; or
  • the interest of the leaseholder is to be sold

the landlord must, before the fifth day thereafter, serve notice on the leaseholder which requires the leaseholder to provide a ‘qualifying lease certificate’ i.e. a certificate which clarifies the status of the lease as qualifying or otherwise. The content of the landlord’s notice is specified by regulation.[34]

The status of a lease as qualifying or otherwise is determined as at 14 February 2022, and that status is automatically transferred to future owners of the dwelling. For conveyancers, determining the status of a lease on sale is going to become very important, and may also be significant for valuation purposes.

If the landlord takes all reasonable steps to obtain a qualifying lease certificate and the leaseholder fails to provide one, the landlord can assume the lease is non-qualifying (at least until a qualifying lease certificate is provided).

The information in the certificate and its form are prescribed by regulation[35]. The leaseholder must also provide specified evidence in support of the certificate.[36]

Part 7

Presumptions about the Landlord and the Landlord’s Certificate

Two presumptions apply to the landlord:

  • The landlord of qualifying leases satisfies the contribution condition[37]
  • The landlord is responsible for relevant defects[38].

The landlord can displace either or both of the presumptions by providing a landlord’s certificate to leaseholders. The information in the certificate and its form are prescribed by regulation[39].

The landlord’s certificate must be provided[40] to the leaseholder:

  • When the landlord demands a service charge which includes remediation costs;
  • Within 4 weeks of:
    • Request by the leaseholder
    • Notification by the leaseholder of an intention to sell the leaseholder’s dwelling
    • Knowledge of a defect which was not covered by a previous landlord certificate.

If a leaseholder is not satisfied with a landlord certificate, they can challenge the certificate in the First-tier Tribunal (Property Chamber)[41].

Part 8

Information Flow: Leaseholder of Qualifying Lease to Landlord[42]

The landlord (or RMC or RTM Company) is entitled to Qualifying Lease Certificates but may also require further information, for example about the value of the dwelling (in order to ascertain if the value is below the threshold for liability.  The legislation provides a framework for future regulations which will prescribe information and documents which leaseholders must provide to landlords

Part 9

Information Flow: Landlord to Leaseholder[43]

The legislation similarly provides a framework for future regulations which will prescribe information and documents which landlords must provide to leaseholders

Part 10

Overview of building safety terms implied into leases of dwellings in higher risk buildings[44]

The new building safety terms implied into leases apply only to leases of dwellings in higher risk buildings, that is buildings which:

  • Are at least 18 metres in height or  with at least 7 storeys; and which
  • Contain at least 2 dwellings[45]

Most of the implied terms apply only to occupied higher risk buildings.[46]

The new building safety obligations on landlords apply only to landlords who are accountable persons. For this purpose a landlord is an accountable person if they:

  • Own common parts, that is the structure exterior and common areas; and/or
  • Have an obligation to repair common parts[47].

There may be more than one accountable person, and if so then one of them will be the principal accountable person[48].

And the building safety obligations apply only in respect of building safety risks[49], that is risks to the safety of people in the building arising from:

  • The spread of fire
  • Structural collapse
  • Other matters which may be prescribed.

Note therefore that for this purpose building safety risks are not limited to fire risks.

Subject as above, the BSA implies new obligations on landlords (which in this context includes RMCs and Right To Manage companies[50]) to provide services in connection with building safety. The legislation also imposes reciprocal obligations on leaseholders to pay service charges to fund the new services.

Part 11

The landlord’s implied building safety duties (NOT YET IN FORCE, AS AT 2 JANUARY 2023)

The landlord’s implied building safety duties are the duties of the accountable person under Part 4 of the BSA[51].[52]

In relation to building safety risks, the accountable persons core duties are to:

  • (In the case of the principal accountable person) apply to register[53] the building with the regulator[54]
  • Assess building safety risks[55]
  • Manage those risks[56]

* To prevent a building safety risk materialising

* To reduce the severity of an incident which such a risk does materialise

  • (in the case of the principal accountable person) prepare a safety case report which summarises risks and the steps the accountable person has taken to manage them[57].

The accountable person has further duties, very briefly summarised, as follows:

  • Procure that a building regulations completion certificate is issued before occupation[58]
  • (In the case of the principal accountable person) apply for a building assessment certificate if the regulator so requires.[59]
  • (in the case of the principal accountable person) display prescribed information about:

* the accountable person

* the building assessment certificate

  • (in the case of the principal accountable person) notify the case safety report to the regulator
  • Provide prescribed information to the regulator
  • (in the case of the principal accountable person) ‘establish and operate an effective mandatory occurrence reporting system[60].’
  • Retain prescribed information and keep it up to date
  • Provide information to the regulator and residents[61]
  • On a change of accountable person, ensure an effective handover of information
  • (in the case of the principal accountable person) prepare a ‘residents’ engagement strategy’ keep the strategy under review and act on the strategy
  • Provide prescribed documents or information to residents, on request[62]
  • (In the case of the principal accountable person) establish and operate a complaints system.

Part 12

Leaseholders’ building safety duties (NOT YET IN FORCE, 2 JAN 2023)

The BSA implies into leases a duty on leaseholders to allow the landlord access to the dwelling for building safety purposes.[63]

Where the leaseholder is also a resident the following further duties[64] are implied into the lease:

  • Not to act in a way which creates a significant risk of a building safety risk materialising
  • Not to interfere with safety items
  • To provide the accountable person with relevant information on request.

Part 13

Building Safety Costs[65] (NOT YET IN FORCE, 2 JAN 2023)

A landlord (including RMA and RTM Company) can recover the costs it incurs in complying with building safety measures as defined.[66] Broadly speaking ‘building safety measures’ are the measures which the landlord takes to comply with the landlord’s implied duties as accountable person.

If an RMC or RTM company engages a remunerated building safety director, the director’s remuneration is also recoverable from leaseholders by way of service charge.[67]

Some other costs in relation to building safety are expressly excluded, for example if the regulator Imposes a penalty on the landlord for non-compliance with building safety obligations the landlord cannot recover the cost of the penalty by way of service charge.[68]

Part 14

Building Safety Information[69] (NOT YET IN FORCE, 2 JAN 2023)

The Landlord And Tenant Act 1987 includes requirements for the provision to the tenant of specific information in written demands, and also the provision to the tenant of the landlord’s address for service (whether or not there is a written demand).

The BSA inserts into the 1987 Act a requirement for the provision of building safety information.

The new building safety information requirements apply only to leases of dwellings in higher risk buildings, that is building which:

  • Are at least 18 metres in height or with at least 7 storeys; and
  • Contain at least 2 dwellings[70]

In the case of higher risk buildings, specified building safety information (see below) must be:

  • contained in written demands (for payment of rent service charges and administration charges) given to the tenant[71]; and
  • given to prospective tenants[72].

The specified information is as follows[73]:

  • the fact that the dwelling is in a higher-risk building’
  • the name postal address email address and telephone number of each of the following:
    •  the principal accountable person
    • the regulator
  • if there is one, the name email address and telephone number of the special measures manager[74]
  • such other information as is prescribed by regulation.

If the specified information isn’t provided, service charges and administration charges aren’t payable until it is. As a result of this sanction, the building safety provisions are effectively binding on any entity which raises a service charge or administration charge including RMCs and RTM companies.

Part 15

Limitations On Service Charges[75] (NOT YET IN FORCE, 2 JAN 2023)[76]

Under section 19 Landlord And Tenant Act 1985, service charges must be reasonable that is the relevant costs[77] to which the service charges relate are only recoverable if and to the extent that they are reasonably incurred, reasonable in amount and incurred for services or work which are of a reasonable standard.

Under section 20 of the 1985 Act, the service charge contributions of tenants are limited unless in specified circumstances the landlord consults with tenants or obtains a tribunal order for dispensation from consultation requirements. From case law concerning statutory consultation in respect of service charges, it is apparent that there is no doctrine of substantive compliance: either the consultation requirements are complied with or otherwise.[78] If the consultation requirements are not complied with and no tribunal order for dispensation is made, the service charge is capped a nominal amount.

The BSA inserts into the 1985 Act new limitations on service charges relating to the costs of remediation works[79].  If the limitations are not complied with, then the tenant can apply to the First-tier Tribunal (Property Chamber) for an order that the costs incurred are not relevant costs and not therefore recoverable by way of service charge[80].  The landlord is not able to apply to a tribunal for dispensation from these new limitations (in contrast to the position where the landlord fails to consult), but the tribunal must make an order which is ‘just and equitable in the circumstances.’[81]

For the purposes of the new limitations, the term landlord includes RMCs and RTM Companies.[82]

The gist of the new limitation is that, in the case of remediation costs, the landlord must:

  • take reasonable steps to seek other cost recovery avenues before passing on the costs to leaseholders[83]; and
  • Inform leaseholders what those steps were (‘consultation’)[84].

In more detail, the landlord must[85]:

  • Ascertain whether any grant is payable for the remediation works, and if so obtain the grant
  • Ascertain whether any of the costs of the remediation works may be met by a third party: the developer, for example, or a warranty provider or insurer
  • Ascertain whether any other prescribed funding is available and if so obtain the funding.

The landlord can start remediation works before complying with the new requirements[86].  If the landlord does obtain alternative funding, the landlord must then reduce the service charge in respect of the remediation costs by the same amount[87].

As regards the consultation requirements, the dispensation provisions in the Landlord And Tenant Act 1985 seemingly may apply, if the remediation works are also ‘qualifying works’ for the purposes of the 1985 Act. Where a landlord applies to the tribunal for an order to dispense with consultation requirements, the tribunal can make such an order where reasonable to do so[88].

Part 16

A Final Note On Commencement

The BSA includes a section on commencement[89] and as at 1 January 2023 there have been three subsequent commencement orders. Significant elements of the legislation are however still not in force.  It is a question of watch this space…

[1] Section 122 provides that the leaseholder protections contained in schedule 8 are to apply. Section 122 and Schedule 8 were commenced on 28 June 2022 (see section 170).

[2] Section 117(3)

[3] Regulation 2 The Building Safety (Leaseholder Protections) (England) Regulations 2022/711. Hereafter SI 711.

[4] Section 117(2)

[5] Section 117 (2) (4) and (5)

[6] Section 119 (2) (d)

[7] Where the landlord is responsible for the defect, the leaseholder protections apply to all leaseholders, not just leaseholders who own qualifying leases. Explanatory note 1674.

[8] Explanatory note 941 to section 119.

[9] Section 120 (3) ( c)

[10] For the definition of relevant works see section 120(3)

[11] Schedule 8 para 1

[12] Schedule 8 para 2

[13] SI 711

[14] Schedule 8 para 2 sub-para (3)(a)

[15] Schedule 8 para 2 sub-para (3)(b)

[16] Schedule 8 para 12

[17] Schedule 8 para 3

[18] See also regulation 5 SI 711.

[19] Schedule 8 para 4

[20] Further valuation provisions are at regulation 9 SI 711.

[21] Schedule 8 para 8

[22] Schedule 8 para 9

[23] Schedule 8 paras 5 and 6

[24] Schedule 8 para 7

[25] Schedule 8 Paras 10 and 11

[26] Schedule 8 para 12

[27] The Building Safety (Leaseholder Protections) (Information etc.,) (England) Regulations 2022/859, hereafter SI 859

[28] See for example SI 711 regulation 3(7) and regulation 4(6)

[29] SI 859 regulation 3          

[30] SI 859 regulation 4

[31] SI 859 regulation 5

[32] Schedule 8 para 12. See also the relevant provisions of SI 859..

[33] Schedule 8 para 13. The definition of qualifying lease is at section 119.

[34] SI 859 regulation 6

[35] SI 859 regulation 6.  The certificate must be signed as a deed. See SI 859 regulation 7. The form of the certificate is in the Schedule to SI 859

[36] SI 859 regulation 6(7)

[37] Schedule 8 Para 14 (1).

[38] Schedule 8 Para 14 (2)

[39] Schedule 1 SI 859

[40] Regulation 6 SI 859

[41] Regulation 11 SI 859

[42] Schedule 8 Para 15.

[43] Schedule 8 Para 16.

[44] Section 112.

[45] Section 65

[46] Section 71 includes a definition of occupied higher risk building.

[47] Section 72.

[48] Section 73

[49] Section 62. (There is a slightly different definition of building safety risk at section 120 (5).

[50] This is because the new terms are inserted as sections 30C to 30I into the Landlord And Tenant Act 1985, and the definition of landlord at section 30 LTA 1985 therefore applies: ‘landlord’ includes any person who has a right to enforce payment of a service charge. From hereon references will where possible be to the relevant provision of the Landlord And Tenant Act 1985 (LTA 85)

[51] LTA 85 30C (2) and 30C (9)

[52] THESE PROVISIONS ARE NOT YET IN FORCE, OTHER THAN FOR PURPOSES OF MAKING REGULATIONS. SEE SECTION 170 (2).

[53] Sections 77 and 78

[54] The Building Safety Regulator is the Health And Safety Executive and the functions of the regulator are set out in BSA Part 2

[55] Section 83

[56] Section 84

[57] Section 85

[58] Section 76

[59] Sections 79, 80 and 81.

[60] Section 87

[61] Section 89

[62] Section 92

[63] LTA 85 Section 30C(3)

[64] LTA 85 Section 30C (3) (b)

[65] LTA 85 Section 30D

[66] LTA 85 Section 30D (4)

[67] LTA 85 Section 30E

[68] LTA Section 20F

[69] Section 113, which introduces new section 47A and 49A into the Landlord And Tenant Act 1987.

[70] Section 65

[71] Landlord And Tenant Act 1987 section 47A, as inserted by BSA section 113

[72] Landlord And Tenant Act 1987 section 49A, as inserted by BSA section 113

[73] LTA 1987 section 49A(5)

[74] See section 107 and Schedule 7.

[75] Section 133

[76] Section 170 (2)

[77] Landlord And Tenant Act 1985 section 18 includes a definition of relevant costs.

[78] Collingwood v Carillon [2021] UKUT 241

[79] Landlord And Tenant Act 1985 section 20D(1)

[80] Landlord And Tenant Act 1985 section 20D (5).

[81] Landlord And Tenant Act 1985 section 20D (7)

[82] LTA 1985 section 30 which states ‘landlord’ includes any person who has a right to enforce a service charge.

[83] Landlord And Tenant Act 1985 section 20D(2)

[84] Landlord And Tenant Act 1985 section 20ZA(5A)

[85] Landlord And Tenant Act 1985 section 20D(2)

[86] Landlord And Tenant Act 1985 section 20D(8)

[87] Landlord And Tenant Act 1985 section 20D(5)

[88] See Landlord And Tenant Act 1985 section 20ZA(1)

[89] BSA section 170.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.