Building Safety Act: Takeaways from a new remediation contribution order decision

• 10 February 2025
• Views

The First-tier Tribunal has made a remediation contribution order (“RCO“) of over £13m against a developer and 75 other entities. The RCO, granted in Grey GR Limited Partnership v Edgewater (Stevenage) Limited and others CAM/26UH/HYI/2023/0003, covers costs incurred by the landlord in carrying out remedial fire safety-related works on Vista Tower, a 16-storey block of residential flats in Stevenage, Hertfordshire.

There are a number of key takeaways from this latest RCO determination:

1. The Tribunal found that it was just and equitable to include in the RCO costs which had not been incurred to remedy a defect that caused a building safety risk but had instead been incurred for “types of consequential or other works involved in a package of works to remedy relevant defects“. In reaching this conclusion, the Tribunal commented that the “just and equitable” test does not necessarily limit RCOs to covering only works/costs that were unavoidable or even works/costs that were reasonable. The Tribunal did note, however, that it might be helpful to consider whether the relevant works/costs were within a “reasonable range of responses/costs” when considering whether it would be just and equitable to include them within an RCO. 
2. The Tribunal found that it was just and equitable to make an RCO against 75 other entities in addition to the developer, having undertaken a forensic analysis of the complex web of companies under the ultimate control of the two key developers. This was because, in addition to association with the developer through common directorship, almost all of these 75 entities were linked in other relevant ways which indicated a wider corporate structure or connection. The Tribunal also considered it relevant that the purpose of RCOs was “so that remedial work can be carried out and/or public money from grant funding can be recovered promptly” and that they were not fault-based.
3. The Tribunal made a joint and several RCO, rather than making orders of specific amounts against specific respondents. It felt this would be more practical for the applicant to pursue and was consistent with the purpose of the jurisdiction, which is to recover money quickly.
4. The Tribunal considered that the meaning of “defect” in the definition of “relevant defect” in s120(2) BSA was not limited to building work that did not comply with applicable building regulations. This was one type of “defect” for which an RCO could be made, but not the only type. 
5. The Tribunal considered that the phrase “building safety risk” in s120(5) BSA could mean, in the context of the risk of spread of fire, “any risk above “low” risk (understood as the ordinary unavoidable fire risks in residential buildings and/or in relation to PAS9980 as an assessment that fire spread would be within normal expectations)“. There would only need to be “a risk to the safety of people arising from the spread of fire in a tall residential building” for an RCO to be made. 
6. As it did with the previous RCO decision in Triathlon Homes LLP v Stratford Village Development Partnership [2024] UKFTT 26 (PC), the Tribunal referred to a hierarchy (or waterfall) of liability and reiterated the purpose of the BSA as being to protect all leaseholders, including those who do not qualify for the costs protections contained in Schedule 8 of the BSA (“Non-Qualifying Leaseholders”).  Whilst it held that the applicant was entitled to costs that could have been recovered from Non-Qualifying Leaseholders through the service charge, it reminded those falling into this category that they have the right to make their own applications for an RCO against the developer and/or other entities that are liable to pay for remediation costs. 

Section 133 of the Act provides that landlords must take reasonable steps to obtain monies for remediation works from funding and/or third parties before seeking to pass on costs to leaseholders and there is authority which suggests that failing to do so would deem such demands as being unreasonable. Whilst it remains to be seen how the landlord in this case will deal with any monies already charged to Non-Qualifying Leaseholders, this case indicates that the Tribunal will expect that leaseholders, even those who do not benefit from qualified status, should not be charged for building safety related remediation costs where there are others higher up the “hierarchy of liability”.