Remediation Orders under the Building Safety Act 2022 – the first of many?

The First Tier FTT (“FtT”) has made its first Remediation Order (“RO”) pursuant to section 123 of the Building Safety Act 2022 (“BSA”).

The case of Waite and Others v Kedai Limited (2-4 Leigham Court Road, LON/00AY/HYI/2022/0005 & 0016) involved an office to residential development creating 35 flats that completed in January 2016.

The RO required the freeholder (Kedai Limited) to undertake works to deal with “relevant defects” including the removal and replacement of ACM cladding and defective insulation and to undertake works to remediate the fire stopping compartmentation, cavity barriers and fire stopping mechanisms.

Section 123 of the BSA defines a RO as:

“an order, made the First-tier Tribunal on the application of an interested person, requiring a relevant landlord to remedy specified relevant defects in a specified relevant building by a specified relevant time”.

The decision in Waite is helpful in providing some guidance on how the FtT will deal with RO applications of this nature.  In particular:

The FtT made clear that section 123 was deliberately drafted broadly and provided it with wide powers to hand down orders that provide practical outcomes to deal with the various applications (which will inevitably involve different factual scenarios) that will come before it; 

Once a coherent, initial case that a relevant defect exists had been demonstrated by an Applicant the objective was to remove that relevant defect. The FtT did not agree that there was any evidential burden of proof on the Applicant or that the BSA required Applicant leaseholders to obtain a (costly) detailed specification of the works required to remedy that defect;

The FtT will rely on and be guided by the evidence provided by inspection reports and expert evidence and possibly by its own inspection and experience when establishing whether there were “relevant defects” in the building;

The FtT did not consider that section 123 was prescriptive in requiring them to set out what specific works were needed to remedy the relevant defects.  The FtT therefore gave a general order requiring the remedial works to be undertaken and noted that this approach gave the landlord the ability to apply to vary that order (to take into account that different works might be needed once they had commenced) should it be necessary in later course; 

In terms of the ‘standard’ of works required the FtT noted that the BSA did not provide any such standard but in their view the remedial works would need to comply with the applicable Building Regulations at the time they were carried out and, in this case, at the very least ensure a satisfactory EWS1 Form could be issued.

Finally, in terms of the “specified time” required in s123 the FtT relied on the landlord’s expert evidence to provide a period of 115 weeks for the works to be undertaken.

The Applicant leaseholders sought to recover their legal costs of the proceedings but the FtT declined on the basis that it was a no costs jurisdiction and the threshold to award costs requires that a party needs to act unreasonably (Rule 13 of the FtT Procedure (First Tier) (Property Chamber) Rules 2013).  The landlord was said to have acted in a way that was deemed to be “active co-operation”.

The Applicant leaseholders were also denied any compensation for the alleged devaluation of their leases as this was outside the FtT’s jurisdiction.

The Applicant leaseholders were similarly refused their request that the landlord be ordered to keep them updated on the progress of works and for them to receive a detailed scope of works for comment/agreement prior to commencement of the works. The FtT also didn’t consider that the relevant works needed to be independently signed off to confirm the relevant defects were compliant once completed.   

Not all of the tenants in the building were “Qualifying Leaseholders” protected under the BSA from the landlord recovering their legal costs in connection with the claim via the service charge.  The FtT acknowledged that the BSA had not removed the power in s20C of the Landlord and Tenant Act 1985 and ordered that Kedai could only pass on 20% of its costs to those non-qualifying leaseholders.

There are a number of ROs moving through the FtT and this decision provides some useful guidance on their approach which, in short, appears to be purposive interpretation designed to ensure that leaseholders benefit from its protections and that buildings in need of remediation are dealt with. 

Please get in touch with us if you have any queries on this rapidly evolving area of law.