The time to pay has arrived: first Remediation Contribution Order granted under the BSA 2022.
In Batish and others v Inspired Sutton Ltd [2023], the First Tier Tribunal (“FTT”) granted the applicant leaseholders what is believed to be the first Remediation Contribution Order made under the Building Safety Act 2022.
The Background to the Case
Mr. Batish and seventeen other leaseholders applied for a Remediation Contribution Order (“RCO”) in the sum of c.£193k for the cost of remedying defects under fifteen separate leases in a high-rise self-contained block of flats at 9 Sutton Court Road, Surrey (“the Property”).
The leaseholders had been served with a section 20 notice under the Landlord and Tenant Act 1985 (the “Notice”). The Notice explained that the cost of the cladding works was to be funded by way of a government grant, but any works excluded from that grant would fall to be funded by the leaseholders by way of the service charge. As it turned out, the grant did not include the cost of balconies replacement and it was these costs which the leaseholders sought.
What did the FTT decide?
The FTT made the RCO against Sutton, ordering it to reimburse the leaseholders the relevant costs within 14 days of the order. The Award was to be divided amongst the leaseholders in accordance with their service charge proportion charged pursuant to their respective leases.
Applying the BSA 2022, the FTT determined the defects in question were ‘relevant defects’ which constituted a ‘building safety risk’ and that the ‘just and equitable’ test had been satisfied as it was proven that the leaseholders had paid for works which ought properly to have been met by Sutton.
The FTT noted that as Sutton was the developer and the landlord at the qualifying time, and was responsible for the relevant defects, the costs were ‘not to be regarded as relevant costs to be taken into account’ in calculating the service charge.
The Conclusion to the Case
This case provides a useful first insight into the steps the Tribunal will take in assessing claims for RCOs made in reliance on the BSA 2022, many more of which are expected to be sought in due course.
For more information contact:
Partner
E-mail: DSpires@hklegal.co.uk