The recent case of Triathlon Homes LLP v Stratford Village Development Partnership (“SVDP”) and others provides welcome and useful judicial guidance on the interpretation of the key provisions of the Building Safety Act 2022. In this case, the First Tier Tribunal made an £18m remediation contribution order (RCO) against a developer, including waking watch costs.
RCOs were introduced in the Building Safety Act 2022 under section 24. They were designed to ensure essential remediation work is addressed quickly to fix building defects, and can order building owners to make their properties safe.
The case will be useful for both landlords and tenants who hold interests in higher-risk buildings which contain aluminium composite material (ACM) or cladding, which include highly-combustible material, following the tragedy of Grenfell tower.
The Applicants in this matter, Triathlon Homes LLP, made an application pursuant to Section 124 of the Building Safety Act 2022. It sought a remediation contribution order from the first and second Respondents, SVDP and Get Living PLC, for fire safety measures needed on the building located at Stratford’s former Olympic Village, known as the ‘East Village’. SVDP built and developed the East Village prior to the London 2012 Olympics and carried out the redevelopment of the buildings post-Olympics, to covert the Athlete’s Village into liveable units. At the time of the initial construction, SVDP was owned by a government entity, however, the partnership was sold as a going concern to various investors for redevelopment after the Olympics. Get Living PLC is an associate of the freeholder (who purchased the freehold in 2018) and of SVDP as defined in the Building Safety Act 2022.
The First-tier Tribunal’s power to make a remediation order depends on whether it is “just and equitable” to do so. A detailed and thorough judgment was given by the First Tier Tribunal’s Chamber President and Deputy President, Mr Justice Edwin Johnson and Martin Rodger KC, which considered a wide range of background facts and considerations in order to determine whether the First-tier Tribunal could exercise its powers.
In giving the judgment, Mr Justice Edwin Johnson and Martin Rodger KC considered a number of preliminary issues including whether costs incurred prior to the enactment of the Building Safety Act 2022 and incurred in preventing risks (as proposed to remedying risks) could be included in a remediation contribution order. It was held possible to grant a remediation contribution order on both sets of costs in this case.
Triathlon Homes LLP had secured funding for carrying out the remediation works, and SVDP and Get Living PLC argued it was not just and equitable to grant a remediation contribution order in the circumstances. Despite having funding, it was held a remediation contribution order would be made for costs already incurred and future costs, totalling just under £18m.
The fact the funding could be withdrawn at any time and that there was likely a shortfall were key factors cited by Mr Justice Edwin Johnson and Martin Rodger KC in reaching their decision. The financial status of both SVDP and Get Living PLC were also factors in determining whether a remediation contribution order was just and equitable.
Tenants and landlords seeking to pursue/defend an application under Section 124 should pay close attention to this judgment. Despite it being heard in the First Tier Tribunal, rather than the Upper Tribunal, the judgment was given by the Tribunal’s President and Deputy President meaning it will no doubt be referred to in future decisions.
The Hamlins Real Estate Disputes team has expertise in both commercial and residential matters. We seek to obtain the best outcome possible for every client, no matter how big or small the issue may be.
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