After the tragedy that occurred at Grenfell Tower in 2017, many assessments were carried out of high rise buildings, which identified wide spread issues with building safety relating to fire risk and the structure of buildings. As Dame Judith Hackitt said in her review the there were “cultural issues” across the construction sector which were described as a ‘”race to the bottom caused either through ignorance, indifference or because the system does not facilitate good practice”.
However, once these issues were identified the obvious question which followed was who was responsible for remediating these buildings and at whose cost?
The government made it clear that it would be “fundamentally unfair” for leaseholders to be responsible for the costs of these works.
The Building Safety Act 2022 (BSA) was rushed through parliament and those in the property and legal sector have grappled to understand this complex and evolving area of law. Whilst the Act, many sets of secondary regulations and government guidance go some way to setting out the law, it remains inevitable that we are going to need the courts intervention for further guidance on some of the key terms of the Building Safety Act and how they apply to remediation works required to high risk and relevant buildings.
The Building Safety Act introduced two orders:
Remediation Orders (RO): orders that ‘relevant landlords’ remediate specified relevant defects in a relevant building within a specified time.
Relevant landlord’ for these purposes refers to a landlord under a lease of the building or any part of it who is required, under lease or by virtue of an enactment, to repair or maintain anything relating to the relevant defect.
Remediation Contribution Orders (RCO): orders requiring parties (bodies corporate or partnerships) to make specified payments, by way of contribution to the cost of rectifying the relevant defects.
These orders are given by the First-Tier Tribunal Property Chamber (FTT).
Nockolds Blog ‘Leasehold & Freehold Reform Act‘ by Lucy Riley on 4th June 2024 discusses the Amendments to s.123 BSA (Remediation Orders) and s.124 (Remediation Contribution Orders) in the Leasehold and Freehold Reform Act 2024.).
The below sets out some of the key cases that we have heard so far on Remediation Orders and Remediation Contribution Orders.
Case & Rulings Review
Waite v Kedai Limited [2022]
Brief summary: Six storey mixed use building. Leaseholders identified issues with cladding, application for RO successful with relevant defects ordered to be remedied by 19th September 2025.
Key takeaways:
- Leaseholders were protected from paying for fixing relevant defects as Kedai Limited were associated with original developer.
- Leaseholders were not awarded their legal costs.
- The Landlord could not pass their legal costs on to qualifying leaseholders through the service charge but could to the commercial tenants.
- There was no set standard of works, the requirement was to comply with building regulations at the time the works were being carried out and ensure all reviews and approvals were being sought.
Mistry and Others v Wallace Estates Limited [2022]
Brief summary: Leaseholders applied for RO against landlord due to various defects including fire safety. The tribunal set an 18-month deadline for the completion of the remediation works.
Key takeaways:
- In this case, consensus was reached as to what amounted to a relevant defect.
- The case illustrates the circumstances under which the FTT will issue a remediation order, the type of evidence required, and the terms of the order it is willing to make based on that evidence.
Arjun Batish and Others v Inspired Sutton Limited and Others [2023]
Brief summary: 18 leaseholders of a block of flats applied for a RCO to address cladding issues, seeking costs for cladding remediation work. They sought orders against: (1) the freeholder and developer; (2) their parent company, and (3) two directors.
Key takeaways:
- It was proven that the leaseholders had paid for works which ought properly to have been met by Inspired Sutton Limited (ISL).
- Original Landlord (ISL) ordered to pay the total sum claimed by all leaseholders in respect of relevant defects under the 15 separate leases.
- The FTT stayed the proceedings against the parent company against because it was in liquidation and there was a moratorium in place.
- The case against directors was struck out as the BSA only allows for remediation contribution orders to be made against bodies corporate or partnerships, not individuals.
- The Tribunal ordered ISL to repay sums that had been demanded before the BSA 2022 came into force, thereby raising the question of whether a RCO can be used retrospectively to order landlords to repay sums that were lawfully demanded at the date of demand.
St John Street Property Services Limited v Riverside Group Limited [2023]
The FTT ruled on the recovery of cladding remediation costs in a mixed-use development. The tribunal considered key issues such as the lease’s provisions for cost recovery, the landlord’s efforts to seek third-party funding, and the impact of potential claims under the Building Safety Act 2022.
Key takeaways:
- The FTT concluded that the prospect of an RCO being made was too remote from the proceedings for it to say what amount of service charges pauable were not reasonable or should be reduced in amount.
Adriatic Land 5 Limited v Long Leaseholders at Hippersley Point [2023]
Brief summary: the landlord applied for dispensation from the obligation to consult with leaseholders on major building safety works, the dispensation was granted but the Landlord could not claim their costs.
Key takeaways:
- On appeal the BSA was applied and the prohibition on landlords claiming their professional costs relating to a relevant defect from qualifying leaseholders meant the landlord could not recover its costs.
- The BSA was still applied even though it was not law when the FTT first instance decision was made.
- Qualifying Leaseholders should be protected from Landlord’s costs.
Triathlon Homes LLP v Stratford Village Development Partnership and others [2024]
Brief summary: the issues included inadequate cladding and cavity barriers and defective fire stopping. Fire safety measures and preparatory works had been carried out during the interim and were included in the application. BSF funding had already been obtained for some of the works.
Key takeaways:
- Despite funding being in place it was ‘just and equitable’ to make a RCO.
- Developers and those associated with the developer were ordered to pay the cost of remediation.
- The FTT found that any measure that causes a building defect to cease being a relevant defect is capable of being the subject of an RCO.
- Costs incurred before 28 June 2022 could be subject to an RCO. Both Section 124 and Schedule 8 aim to shift the responsibility for remediation from individual leaseholders to the original developer and its associates.
Newham Council v Chaplair Limited [2023]
Building owner was issued with an improvement notice for failing to remove combustible cladding, works were carried out but not by the deadline set by the Council. As a result the company was fined.
Key takeaways:
- First court action where a local authority has pursued a building owner for delays in carrying out works to replace cladding.
- It is important that the deadlines set in Improvement Notices are complied with.
Ms S Culpin and Ms D Pring v Stockwood Land 2 Limited [2023]
Brief summary: Leaseholders sought RCO from the developer for cladding issues. The court determined the developer was accountable for the remediation costs
Key takeaways:
- Expert evidence, provided by a fire engineer in this case, is critical in substantiating claims about building defects and the need for remediation.
- The FTT favoured a general approach to the terms of the RO, indicating orders do not need to prescribe every detail of remediation work.
Secretary of State for Levelling Up, Housing and Communities v Grey GR Ltd Partnership [2024] (29 April 2024)
Brief summary: Secretary of State for Levelling Up, Housing and Communities won the case against the freeholder of tower block with FTT issuing a remediation order after multiple fire safety issues identified in 2019 were not fixed.
Key takeaways:
- The case illustrates the Tribunal’s willingness to issue Remediation Orders under Section 123 of the Building Safety Act 2022.
- The Tribunal’s decision reiterates the strong focus on leaseholder protection, aligning with the legislative intent of the BSA 2022 to ensure that leaseholders are safeguarded from bearing the costs of remediation alone, especially in buildings where safety defects pose significant risks.
- The involvement of the Department for Levelling Up, Housing and Communities (DLUHC) highlights governmental authority in overseeing and enforcing remedial actions, even against well-resourced property owners, ensuring compliance with safety standards and timely completion of works.
Lehner v Lant Street Management Company Limited [2024] (17 May 2024)
Brief summary: Appeal to Upper Tribunal regarding a FTT decision that the leaseholder was liable to contribute towards remediation works at his building. The FTT had ruled that the leaseholder did not qualify for protections under Schedule 8 of the Building Safety Act 2022 (BSA 2022) due to a lack of evidence and the non-applicability of certain conditions. The Upper Tribunal allowed the appeal, clarifying that the landlord’s failure to serve a proper certificate per the regulations meant they were deemed responsible for the defects, making the leaseholder’s lease a qualifying lease under the BSA 2022.
Key takeaways:
- The case clarified that if a landlord fails to serve a certificate in accordance with the BSA 2022 regulations, they will be deemed responsible for building defects.
- The Upper Tribunal emphasised that a lease will be considered qualifying if the necessary conditions are met, regardless of whether a certificate has been provided.
- The judgment underscores the need for landlords to be diligent in meeting the stringent requirements and deadlines set out in the BSA 2022 to avoid financial liability for remediation costs.
Overall key takeaways on the cases so far:
- The legislation is complex and still evolving.
- The law is not likely to be interpreted in favour of landlords.
- Missing key deadlines is likely to have adverse consequences for landlords and leaseholders.
For more information on the Building Safety Act 2022 or to find out how we can help you, please contact us on 0345 646 0406 or fill in our online enquiry form and a member of our Team will be in touch.