A Developing Position – First Contested Remediation Contribution Order Made Against A Developer

Last year, we reported that the First Tier Tribunal ("FTT") issued the first remediation contribution order ("RCO") under section 124 of the Building Safety Act 2022 ("BSA"). However, that RCO was issued uncontested. Now, on the 19 January 2024, the FTT handed down its decision on the first contested RCO in Triathlon Homes LLP -v- (1) Stratford Village Development Partnership (2) Get Living plc (3) East Village Management Limited [2024] UKFTT 26 (PC). This short blog considers the implication this judgement has on the interpretation of the BSA.

Background

This matter concerned five buildings within the East Village, which was formally the Athletes Village for the London Olympic Games:

• The Athletes Village was owned and developed by Stratford Village Development Partnership ("SVDP")
• At the time of the development, SDVP was owned by the Olympic Delivery Authority, and thereafter, following London 2012, it was ultimately owned by Get Living Plc ("Get Living").
• Triathlon Homes LLP ("Triathlon") was established to provide affordable housing at East Village and is the long leaseholder of at least part of each block.
• Both Triathlon and Get Living subsequently leased the properties to private individuals.

Building inspections undertaken by East Village Management Limited ("EVML") identified various building safety defects within five separate blocks of flats which required remedial work. This led to a waking watch being put in place as a temporary safety measure, and thereafter, a remedial scheme was designed and tendered. Triathlon made an application to the FTT for RCOs to be made against SVDP (as the developer) and Get Living (as SVDP's and the freehold landlord entities' parent company – an "associated person" in terms of the BSA) in respect of its share of the costs relating to these defects.

Triathlon's share of the remedial works and professional fees was estimated to be around £16,000,000 and future costs in relation to a number of issues including the forecast cost of servicing and decommissioning temporary fire alarms were estimated at £760,000. Triathlon's additional costs – including the waking watch, fire evacuation staff and investigations into the defective works totalled over £1 million.

The FTT decided in favour of Triathlon and made five RCOs (one in respect of each building) against each of the respondents, which added up to the total sums sought.

Impact of this Decision

As previously noted, the only RCO made by the FTT prior to this case was an uncontested order, meaning certain provisions with the BSA were not previously examined by the FTT in detail. This decision, therefore, provides valuable insights into how key provisions of the BSA are to be interpreted, the most notable being:

• The provision of funding from the Building Safety Fund was not considered a reason for the FTT not to make an award in this case. The view of the FTT was that the Building Safety Fund should only be called upon when no relevant parties were available to fund the works.
• RCOs have been created to be an independent remedy with no need for fault to be shown.). Instead, the BSA creates a hierarchy of liability which has the landlord who is responsible for the defect at the top.
• Section 124 of the BSA allows RCOs to be made in respect of costs incurred prior to 28 June 2022
• Measures which cause "a building defect to cease to be a relevant defect, or which is part of a larger programme of measures for that purpose", including the interim safety measures, can be the subject of an RCO.
• There is no one size fits all answer to the question of whether it would be "just and equitable" to make an award and each application will be decided on its individual facts, taking account of the purposes behind the BSA.

For further information on remedial contribution orders or the Building Safety Act 2022, please see our Building & Fire Safety Hub.