Remediation Orders: Update on First Tier Tribunal Decisions

The First Tier Tribunal ('the FTT') has recently ruled in three cases regarding Remediation Orders bringing the current total to six. Below we summarise the cases and consider the key takeaways. 

Vista Tower

Vista Tower ('the Building') is a 16-storey block over 45 metres high which accommodates 73 residential properties. In or around 2019 and 2020 building and fire safety issues, including combustible glazing, panels and a lack of cavity barriers/fire stopping, were identified. In November 2020, interim measures were put in place at the Building including waking watch.

In June 2020 the Respondent applied to the Building Safety Fund (‘the BSF’) for funding for the remedial works based on the Consolidated Advice Note ('CAN') (which required the removal of all combustible cladding/ insulation, to comply with building regulations). In December 2020, pre-tender support was provided by the BSF in respect of the combustible panels and glazing only. At this stage, the remedial costs were estimated to be in the region of £10 million.

In March 2021, the estimated costs of remediating the fire safety defects increased by £4.5 million. A substantial amount of that sum related to the replacement of combustible insulation and plywood. The Respondent applied to the BSF for additional funding and that appeal was rejected in November 2021. 

Following the withdrawal of the CAN, and the introduction of the PAS 9980:2022 code of practice ('PAS 9980'), the Respondent undertook investigations in accordance with PAS 9980 in June 2022. In October 2022, the Respondent withdrew its BSF application based on CAN and re-submitted and application by reference to the PAS9980 assessment.

The Applicant's Case

On 2 November 2022, the Applicant applied to the FTT for a remediation order. The Application was made by the Secretary of State for Levelling Up, Housing and Communities on behalf of 57 leaseholders and occupiers of the Building. 

The Applicant advanced arguments that there was no basis for the Respondent to await further public funding prior to undertaking the remediation works required. The Applicant argued that the legislation (the Building Safety Act 2022 (BSA)) did not pose a ‘just and equitable’ discretion on the FTT. As such, if the FTT was satisfied there were relevant defects, a remediation order must be made. If the Applicant was wrong, and the FTT had a residual discretion, the Respondent should have “forward funded” the remediation works rather than await funding.  

The Applicant's main complaint was the lack of pace in completing the remediation works (something which is an issue across the sector). The Applicant's position is that the reasons for the same were twofold - firstly, the Respondent's insistence that funding be obtained beforehand and secondly, the Respondent's move from CAN based remedial solution to a PAS 9980 based remedial solution. 

Finally, the date for practical completion of the works was agreed prior to the hearing but the Applicant argued that the need for a remediation order was unaffected by the works having commenced. 

The Respondent's Case 

The Respondent acknowledged the delay in commencing works and identified three causes - the scale and complexity of the remedial works, Covid-19 and engagement with the Government. 

The Respondent argued that “forward funding” was a new argument that was not reflected within the BSF guidance. Indeed, the Respondent stated that the guidance suggested the contrary to be correct and that it was untrue or at least highly unlikely that the Respondent would have been able to claim funding after completion of the works. 

The criticism levied against the Respondent for moving towards a PAS 9980 based remedial solution was misplaced. 

The Respondent's asserted that the FTT has discretion under the BSA and should refuse to exercise it in favour of the Applicant. They continued that section 123 BSA defines the scope of remediation orders but nothing about how the FTT should exercise its role. 

A remediation order is akin to an order for specific performance and therefore no order should be made. Contracts have been entered into in relation to both the remediation works (a JCT contract) and funding from the BSF (a grant funding agreement) and therefore the FTT cannot be satisfied that a remediation order is necessary. Further, internal compartmentation and fire stopping works commenced on 14 November 2022 with practical completion of those works due to take place in September 2025. A remediation order would make the FTT a third-party supervisor of works and any order should be made subject to the contracts to minimise overlap and confusion. 

The Decision

The FTT determined that it has both the power to and a discretion as to whether to make a remediation order. The BSA is drafted in what appears to be “deliberately broad” terms to enable the FTT to respond appropriately. 

The FTT decided: 

1. there was delay on behalf of both the Applicant and Respondent in their respective dealings; 
2. the Respondent was right to seek payment from the BSF and that “forward funding” would've been impractical; 
3. the criticism on the Respondent changing to a PAS 9980 based solution was misplaced;
4. it is difficult to see whether a remediation order will make any practical difference in light of the relevant contracts being entered into and the remediation works having commenced; 
5. nonetheless, in the circumstances it is appropriate to make a remediation order but as a backstop to give reassurance to the leaseholders who are not a party to any of the aforementioned contracts;
6. the remediation order must be in terms which are subject to the JCT contract and grant funding agreement; and 
7. because the remediation order is subject to the JCT contract and grant funding agreement, applications to the FTT in respect of the order may only be made after the date for practical completion of the works has passed i.e. September 2025. 

Spur House

Spur House is a mixed use, nine storey building containing 39 residential units. The Applicants were six long leaseholders of units within Spur House and the Respondent was the freehold owner. The Respondent was responsible for the re-development of Spur House in 2016. 

Defective insulation (not installed in accordance with manufacturers guidance) and balcony defects (the balconies were constructed of combustible timer decking, timber edge protection/barriers and privacy screens). 

The Decision

The parties indicated that the general terms of the remediation order were agreed. The FTT raised a number of points regarding the format of the order – specifically in respect of items that went beyond what could be included in the same, for example a term that a third-party contractor approve and supervise the works. Instead, the FTT suggested that this be included by way of recital to the order (as opposed to a term of the order). Amendments were also made in respect of involving the Building Safety Regulator ('BSR') and the London Fire Brigade ('LFB') - namely that they be informed of the Respondent's compliance with the terms of the remediation order. 

Space Apartments

Space Apartments is a block containing 29 residential units with a maximum height of five storeys (just over 11 meters). The Respondent owned the freehold of Space Apartments, and the Applicants were long leaseholders. Numerous fire safety issues were identified in the building. 

At the time of the hearing, the parties were largely in agreement as to the scope of works. However, the following issues remained in dispute: 

1. whether it was appropriate to make a remediation order given that the Respondent had committed to carrying out the required remedial works; 
2. the timeframe for completion of the works; 
3. whether works to the timberwork on the balconies and roof terraces could be included in a remediation order; 
4. the extent to which the FTT could make ancillary orders (such as obligations to consult and provide confirmatory reports at the conclusion of the works); and
5. works arising out of a report obtained by the Respondent. 

The Appropriateness of a Remediation Order

The Respondent argued that a remediation order was not necessary given their progress in relation to investigations/works. The Respondent had been proactive throughout and was committed to carrying out the necessary works. 

The Applicant argued that unless the FTT made an order there would be no guarantee that the remediation works would be completed at all or in a reasonable timeframe. 

Timing of the Works

The Respondent proposed a deadline of 26 June 2026. 

The Applicant pressed for a shorter timescale. 

Balconies etc.

The Respondent argued that the provisions of the Applicants' leases place obligations on the Applicants in respect of the timber decking on the balcony or terrace and that the same are excluded from the Respondent's obligations. Therefore, the FTT were not able to include a requirement that the Applicant undertake works to the same within any remediation order.

The Applicants' position is that the timber decking relates to the building as built. The timber decking is a relevant defect and requires remediation before the building can be made safe. The Applicants referred to the decision of Batish v Inspired Sutton Ltd where the tribunal made a remediation contribution order in respect of balconies included within the leaseholders’ demise. Therefore, the demise of the balconies was irrelevant. Finally, the Applicants also argued that their leases contained powers allowing the Respondents to enter the leaseholders' demise to carry out the remediation works. 

Ancillary Orders

The Applicants were concerned that (a) the cost of the works was based on building regulations at the time of construction (not present requirements) and (b) they could not sell and/or re-mortgage their properties without receipt of an updated Fire Risk Assessment of the External Wall and EWS1. The Applicants also sought orders that the Respondent consult on the works and the Applicants have the ability to approve contractors. 

The Respondent argued that the FTT did not have jurisdiction to make orders outside of the plain wording of section 123 BSA. 

The Decision

The FTT decided: 

1. a remediation order should be made - there was greater prejudice to the Applicants by not making an order than there is to the Respondent in making the order;
2. a 20-month period (comprising a 10 month pre-contract period and a further 10 months to complete the works) is sufficient. The availability and timing of funding is not generally a matter to be given any weight in assessing timing for works and no evidence was adduced to show that the Respondent would not be able to complete the works without the funding;
3. the Respondent did not have an obligation in respect of the timber decking on the balconies and terraces and therefore works relating to the same could not be included in any remediation order. This argument did not extend to the brise soleil and privacy screens, and
4. the FTT must have the power to make ancillary orders if they are necessary to make the remediation order effective and workable i.e. a provision within the order which places a requirement for reports to be undertaken at the conclusion of the works and works to be undertaken in accordance with building regulations.

Key Takeaways

In light of the above decisions, our key takeaways on the current landscape of remediation orders are: 

1. The FTT retains discretion in relation to applications under section 123 BSA.
2. If satisfied that remediation order should be made, they will do so regardless of the funding position.
3. If satisfied that remediation orders should be made, they will do so despite works being agreed, works contracts being entered into and even works having commenced.
4. The FTT considers it appropriate to make a remediation order in circumstances where it will bind Respondents to a firm timetable.
5. When preparing a draft remediation order, parties should be clear about what falls within the scope of a remediation order. 
6. It is the obligations to carry out works which triggers the FTT’s power to make a remediation order. Therefore, where defects fall outside of the landlord’s responsibilities, the same fall outside of the scope of a remediation order.

For more information, please contact Zoe McLean-Wells, Hannah Keane, or Ellie Fletcher.