First Remediation Order

In January, the First Tier Tribunal made the first Remediation Contribution Order, in Batish v Inspired Sutton: (Fire Safety: UK Tribunal makes first remediation contribution order - Hogan Lovells Engage), allowing tenants to recover money they had paid through service charge for fire safety remedial works.

In Waite and others v Kedai Limited, the Tribunal has gone a step further, making the first Remediation Order under Section 123 of the Building Safety Act 2022, requiring the landlord of a development of 35 residential flats in Lambeth to carry out various works – including removal of cladding, and works to the insulation, cavity barriers, and fire-stopping mechanisms.

Basis for granting an order

Having established that the building was a relevant building (over 5 storeys or 11 metres high with at least 2 dwellings), and the landlord and leaseholders both fell within the Building Safety Act regime, the Tribunal agreed that the defects:

• were “relevant defects” – arising from works carried out within 30 years of 14 February 2022;  and
• caused a “building safety risk”- essentially, a risk of the spread of fire or collapse of the building.

On that basis, they granted a remediation order, requiring the landlord to carry out various remedial works within a period of 26 months.

Recovery of leaseholders' costs

Having secured the order, the leaseholders applied to recover their legal costs for the proceedings. The Tribunal declined, stating that it was a “no costs jurisdiction”, except where one party has acted unreasonably – a very high threshold, which was not met in this case.

The Tribunal also refused to give the tenants compensation for the devaluation of their leases as a result of the defects, as this was also outside their jurisdiction.

Recovery of landlord’s costs

Some of the tenants were “Qualifying Leaseholders” (qualifying leases are long leases of single-dwellings, granted before 14 February 2022 which, at that date, was either the leaseholder’s home, or they owned no more than 2 other homes in the UK, under which service charge is payable).  

The Building Safety Act prevents landlords from recovering their legal costs in connection with remedial works – including proceedings - from Qualifying Leaseholders.

While this protected some leaseholders, others were not “qualifying leaseholders”, and sought an order under section 20C of the Landlord and Tenant Act 1985, which allows tenants to apply for a court order preventing a landlord from recovering costs associated from proceedings under the service charge.

The Tribunal was clear that the non-qualifying leaseholders’ rights under the 1985 Act were not altered by the Building Safety Act, but it only had jurisdiction to make an order where it was “just and equitable in the circumstances”. This meant the Tribunal would only make an order where the landlord had not acted swiftly to remedy defects.

While there had been some delay to various works, the landlord had generally acted swiftly and had been compliant in the proceedings.

However, the leaseholders had largely been successful in getting a remediation order on the terms they requested, and the whole purpose of the Building Safety Act was to require developers – or those associated with them (as the landlord in this case was) to fix fire safety defects.

The Tribunal therefore ordered that 80% of the landlord’s costs in the proceedings could not be passed through to the tenants.

More clarity for landlords and leaseholders

As the Tribunal said, “this is an entirely new area of law; there is very little, if any, guidance as to the statutory test to be applied; and there is no previous authority, this being the first substantive hearing of an application for a remediation order under the BSA”.

It therefore provides a vital roadmap, setting out when remediation orders will be made, and giving landlords and leaseholders more clarity over the process, and outlining how the costs of such proceedings will be dealt with.

The process gives leaseholders the power to hold landlords to their obligations under the Building Safety Act, and gives those landlords who have not already taken steps to remedy defects, more clarity on what may be required from them if they fail to do so swiftly.

Authored by Lucy Redman and Paul Tonkin.