FTT makes first Remediation Order for building safety works
1st September 2023
1st September 2023
Back in January, we saw the First-Tier Tribunal (“FTT”) make the first Remediation Contribution Order (“RCO”) under the new powers introduced by the Building Safety Act 2022 (“BSA”) (see our report here). Now, almost 8 months later, we have seen the FTT make the first Remediation Order (“RO”) under the BSA in the case of Waite & others -v- Kedai Ltd .
What are RCOs and ROs?
Both RCOs and ROs apply to “relevant defects” in a “relevant building” :-
A “relevant building” is defined in Section 117 of the BSA as a self-contained building or part of a building that contains at least two dwellings which is at least 11 meters or five stories in height.
A “relevant defect” under Section 120 of the BSA is anything done or not done, or used or not used in connection with relevant works which causes a “building safety risk”, such as the spread of fire or the collapse of part or all of the building.
Applications can be made by an “interested person” which includes a number of bodies but are most likely to be persons with a legal or equitable interest in the building, such as leaseholders.
RCOs concern payment towards remediation costs. The FTT can make an order under Section 124 of the BSA, requiring a corporate body to make payment towards remediation costs that have been incurred, or are expected to be incurred, and are necessary to cure what are defined as “relevant defects” in a “relevant building”.
Part of the RCO powers can include ordering a developer or landlord (or those associated with them) to either pay to remediate defects or, where leaseholders have already paid a contribution towards such costs, reimburse them.
ROs concern works to remedy the defects in question. The FTT can make an order under Section 123 of the BSA, requiring a relevant landlord to remedy specified “relevant defects” in a specified “relevant building” by a specified time. A RO is, with the permission of the County Court, enforceable in the County Court to compel compliance.
Waite & others -v- Kedai Ltd
The case concerned a development at 2-4 Leigham Court in Streatham, comprising two blocks (each over 18m) of 35 residential flats and one commercial unit at ground level. The blocks had been converted from office space in 2015-2016. 30 of the 35 residential leaseholders joined the application against the landlord, Kedai Ltd, for a RO.
From quite early, concerns grew about the quality of the construction work. Following the Grenfell Tower fire in June 2017, those concerns focused on the gold coloured aluminium cladding on the upper two storeys of each of the two blocks and the internal compartmentalisation of the blocks. Various fire safety reports had been obtained between 2019 and 2023, and in June 2023 two improvement notices had been served by Lambeth Council under Section 12 of the Housing Act 2004 in respect of defects affecting both blocks.
It was agreed by all parties that the ACM cladding, the (lack of) fire-stopping, cavity barriers and compartmentation; both the ACM and fibre cement external wall systems (i.e. the panels, insulation and (lack of) cavity barriers), were “relevant defects” causing a “building safety risk” within the meaning of the BSA. It was not agreed that certain other defects relied upon by the leaseholders had been established as being “relevant defects” causing a “building safety risk”.
The FTT’s decision
The FTT was satisfied that the conditions for making a RO against the landlord, Kedai Ltd, had been made out in respect of both blocks, and ordered specified remediation works to be completed by 19 September 2025.
The FTT was satisfied that the majority of the defects at the development were “relevant defects”, having arisen in connection with “relevant works”, e.g. works relating to the construction or conversion of the building within the relevant period of 30 years (Section 120(3)). The FTT found that the specified “relevant defects” have caused and continue to cause a “building safety risk”, in that, in relation to the buildings, there is “a risk to the safety of people in or about the building arising from (a) the spread of fire, or (b) collapse of the building or any part of it”.
At the forefront of the FTT’s decision was the fact that the focus of the BSA is on building safety and the improvement of standards. As such, the FTT agreed that the BSA must work and be made to work for leaseholders in a straightforward way. The FTT was not convinced that it was restricted in its interpretation of Section 123 by reference to other statutory provisions or case law, saying :
“Here, we are dealing with a statutory remedy in simple terms, arising from certain limited criteria being satisfied. In short, the objective of the BSA is (with occasional overlap) different to all other regimes. It is simply to remove a “relevant defect”.”
Once satisfied that one or more “relevant defect” is present in the building, the FTT’s power is to make a RO. The date for considering whether a relevant defect creates a building safety risk is the date of the hearing. While the construction work for these blocks was done many years ago, the FTT is considering the risk that is caused by the state of the building today, using today’s knowledge of building materials and processes. The question is simply whether the work creates a building safety risk in the light of today’s knowledge.
There is no guidance in the BSA about how the FTT should assess the risk to the safety of people in or about the building, or the scope of the works that may be required “to remedy” the relevant defects, or the standard to which any remedial works must be carried out. The FTT has been given a very wide power in this respect, although the FTT stressed the importance for any RO to be sufficiently precise so that the landlord can know what it must do to remedy the relevant defects and for enforcement purposes before the County Court.
The FTT declined to make certain other orders against the landlord sought by the leaseholders including an order for their legal costs incurred in pursuing the RO and for compensation in respect of certain losses such as the leaseholders’ inability to sell and devaluation of the leases over the last 6 years, primarily on the basis that the FTT had no jurisdiction to make such orders.
However, the FTT did grant a Section 20C application made by the leaseholders and decided a fair outcome would be that 80% of the landlord’s costs for dealing with the RO application should not be passed on to the leaseholders through the service charges (although none of the landlord’s costs could be passed on to any qualifying leaseholders in any event, by virtue of the leaseholder protections in Para 9 of Schedule 9 to the BSA).
It was undoubtedly right for the FTT to grant a RO, given the clear findings regarding the defects in question, to ensure that the remedial works are seen to by the landlord within a set period of time.
As the first case of its kind, the case provides useful insights into the considerations to be made by the FTT in other cases going forward (although, as a first instance decision, it is not strictly binding on later FTTs, but it will be persuasive). Indeed, the case highlights the seriousness with which the FTT will deal with any questions of building safety, to support the aims of the BSA of helping to improve building standards.
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