In the Landlord and Tenant Act 1985 (c. 70), after section 20F insert—

“20FALimitation of variable service charges: excluded costs for regulated buildings in Wales

(1)

This section applies in relation to a lease to which section 30IB (regulated buildings in Wales: liability for building safety costs) applies.

(2)

Excluded costs are not to be regarded as relevant costs to be taken into account in determining the amount of any variable service charge payable by a tenant under the lease.

(3)

In this section “excluded costs” means any of the following costs in connection with the Building Safety (Wales) Act 2026 or regulations made under it—

(a)

costs incurred or to be incurred by or on behalf of a relevant person solely as a result of any penalty imposed or enforcement action taken by an enforcing authority;

(b)

legal costs incurred or to be incurred by or on behalf of a relevant person in connection with management order proceedings relating to the building;

(c)

costs that a management order provides are to be met by any person other than a relevant person or the tenant under the lease;

(d)

costs incurred or to be incurred by or on behalf of a relevant person by reason of any negligence, breach of contract or unlawful act on the part of that relevant person or a person acting on their behalf.

(4)

In this section—

“enforcement action” means action taken with a view to, or in connection with—

(a)

securing compliance with the Building Safety (Wales) Act 2026 or regulations made under it, or

(b)

the imposition of a sanction in respect of a contravention of that Act or those regulations;

“enforcing authority” has the meaning given by section 94 of the Building Safety (Wales) Act 2026;

“management order” means—

(a)

an order under section 24 of the Landlord and Tenant Act 1987 appointing a manager to carry out any of the duties of an accountable person under the Building Safety (Wales) Act 2026 or regulations made under it;

(b)

a special measures order under section 109 of the Building Safety (Wales) Act 2026;

“management order proceedings” means any proceedings relating to the making, variation or discharge of, or the giving of directions in relation to, a management order (including any appeals in relation to such proceedings);

“relevant person” means—

(a)

if the landlord under the lease is an accountable person for the regulated building under the Building Safety (Wales) Act 2026, the landlord or any manager appointed by a management order relating to the building;

(b)

otherwise, any superior landlord who is an accountable person for the building or any manager appointed by a management order relating to the building.

(5)

The Welsh Ministers may by regulations amend subsection (3) to add, remove or modify a description of costs incurred or to be incurred by or on behalf of a relevant person in connection with the Building Safety (Wales) Act 2026 or regulations made under it.

(6)

The regulations may make—

(a)

supplementary, incidental, transitional or saving provision (including provision amending this Act);

(b)

different provision for different purposes.

(7)

Regulations under this section are to be made by Welsh statutory instrument and are subject to the Senedd approval procedure.”