Developer required to pay £194,000 towards building safety works

Published on 25.09.23
Published on 25.09.23

The first Remediation Contribution Order under the Building Safety Act 2022 was made earlier this year, ordering a developer to pay the costs of repair works of £194,000. The case is of interest to developers, freeholders and leaseholders. Ben Portner examines the decision in Batish and others v Inspired Sutton Ltd [2023].

Background

The leaseholders of 15 flats in a block at 9 Sutton Court Road, Sutton applied for a Remediation Contribution Order under the Building Safety Act. The applicants applied for the return of contributions made under their service charge towards the costs of replacing balconies that were deemed a fire safety risk.

The respondent was the developer and freeholder, Inspired Sutton Limited (ISL). It should be noted that ISL was debarred from taking part in the proceedings for failure to comply with directions made at a case management hearing. ISL was therefore unable to defend the proceedings, and the decision was made without them being represented at the hearing.

Decision of the First-tier Tribunal (Property Chamber)

Judge Siobhan McGrath found that the conditions for making a Remediation Contribution Order had been met. She said it was “just and equitable” to do so as the tribunal was “satisfied that the lessees paid for the costs of works which ought to have been met by [the Developer]”.

Specifically, the tribunal found:

  1. The block of flats was a relevant building under the Building Safety Act as it was structurally detached and at least five storeys high.
  2. The applicants satisfied the test for being interested persons as they held long leases in the block.
  3. Remediation Contribution Orders can only be made against a specified body corporate or partnership, and ISL was a relevant body corporate for the purposes of the Act.
  4. Schedule 8 of the Act states that leaseholders should not pay a service charge in relation to “relevant defects” that constitute a “building safety risk”. The fire safety defects to the balconies were a “building safety risk”, and these were the landlord’s responsibility.

ISL was ordered to refund the leaseholders the costs levied under the service charge towards the balcony remediation works of £194,680.62.

Conclusion

As ISL was debarred from participating in these proceedings, we do not know what arguments they would have raised in objection to the applicants’ claim. However, several other cases under the Building Safety Act are going through the courts, and we can expect further interesting decisions on Remediation Contribution Orders in the near future. We will update you once these are reported.

If you have any queries in relation to claims for a Remediation Contribution Order under the Building Safety Act, please contact Ben Portner at [email protected].

Disclaimer: The above is merely general guidance and should not be relied on as formal advice. We suggest you take professional legal advice before taking any action in relation to the issues discussed above.