Shorter Reads

BUILDING SAFETY ACT AND REMEDIATION CONTRIBUTION ORDERS: CONSIDERATIONS FOR INVESTORS

Since the introduction of the Building Safety Act 2022, landlords have faced increased liability as the Government has taken steps to improve building safety, reduce existing building safety risks and to see that leaseholders are protected from incurring the costs of building remediation works.

Here we look at the judgment of the First Tier Tribunal (“FTT”) in Grey GR Limited Partnership v Edgewater (Stevenage) Limited and Others, as it highlights important building safety considerations for investors and high-net worth individuals who may be concerned about the implications of Remediation Contribution Orders.

3 minute read

Published 7 March 2025

Authors

Share

Key information

  • Services
  • Construction

Since the introduction of the Building Safety Act 2022, landlords have faced increased liability as the Government has taken steps to improve building safety, reduce existing building safety risks and to see that leaseholders are protected from incurring the costs of building remediation works.

Here we look at the judgment of the First Tier Tribunal (“FTT”) in Grey GR Limited Partnership v Edgewater (Stevenage) Limited and Others, as it highlights important building safety considerations for investors and high-net worth individuals who may be concerned about the implications of Remediation Contribution Orders.

We draft this content in advance of the awaited Court of Appeal judgment in Triathlon Homes LLP v Stratford Village Development Partnership & Others which is expected to be handed down in March 2025.

BACKGROUND

Vista Tower, a 16-storey block of flats, approximately 49.5 metres high, located in Stevenage, Hertfordshire, was converted from offices into flats by Edgewater (Stevenage) Limited (“Edgewater”) in 2015. Grey GR Limited Partnership (“Grey GR”) purchased the freehold interest in Vista Tower, on behalf of the railway workers pension fund, Railpen, in 2018.

Vista Tower was previously in the news in 2024 after the former Department for Levelling Up, Housing and Communities obtained a Remediation Order against Grey GR.  In that instance the FTT granted a Remediation Order against Grey GR requiring building safety defects to be fixed by 09 September 2025.

Before this Remediation Order was granted, Grey GR applied to the FTT seeking Remediation Contribution Orders against the developer, Edgewater, and 95 other respondents, pursuant to Section 124 of the Building Safety Act 2022.

CURRENT POSITION

The result of both Grey GR cases is that the remediation works are due to be completed by 09 September 2025 and that 76 respondents have been found jointly and severally liable to pay the total remediation cost of £13,262,119.

We are currently unaware of the financial arrangements by which the remediation costs will be funded, but that arrangement could lead to further litigation.

RELEVANT DEFECTS

The Grey GR decision provides clarity on the test for “relevant defects” pursuant to section 120(1) of the Building Safety Act 2022. The FTT found that the definition of a defect goes much further than non-compliance with a Building Regulation.

For the purposes of section 120(2) of the Building Safety Act 2022, “defect” has generally been understood to mean “anything done (or not done) or anything used (or not used) in connection with relevant works” and which “causes a building safety risk”. The FTT’s decision makes clear that this is not strictly limited to non-compliance with a Building Regulation.  Rather, non-compliance with a Building Regulation is “merely one way, not the only way, in which something could be a “defect” for these purposes.” The definition of a defect covers any aspect of building works which could pose a safety risk. “Safety risk” being a broad and open definition. It seems that compliance with a Building Regulation is not a full shield to allegations of building safety risks. In applying a broad and open definition, the FTT’s decision mirrors the intention of the Building Safety Act 2022.

The FTT’s decision also provides clarity that, pursuant to section 120(5) of the Building Safety Act 2022, any risk greater than “low” risk could be considered to be a building safety risk.

The FTT held that Remediation Contribution Order determinations will be fact sensitive, dependent on the facts of each individual case.

It is therefore imperative that investors and high net worth individuals consider the importance of regular and rigorous building safety assessments during the construction phase in order to best protect their investment. Identifying liability for safety risks, remediation procedures and litigation post-completion are costly and therefore the best return on investment will be achieved by ensuring the strictest compliance with building safety at the time of construction.

WHAT IS “JUST AND EQUITABLE?”

The FTT have the power to make a Remediation Contribution Order if it is “just and equitable” to do so. Having made particular reference to the extent of knowledge of combustible materials used in construction, the FTT provided further clarity by giving examples of how the “just and equitable” test, pursuant to section 124(1) of the Building Safety Act 2022 is to be applied as against multiple respondents. When examining the “just and equitable” test in this case the FTT considered these key factors, among others:

  1. Profit and funding flow between various respondents and whether a respondent is part of a wider corporate group.
  2. Associated companies will not be deemed automatically liable unless the company can establish good reasons as to why it should not contribute to the remediation costs.
  3. If there existed a clear pattern whereby directors and/or shareholders were drawn from small connection pools, whether related by familial links or other business associations.
  4. If the respondent was involved in the property development / construction sector.
  5. The impact that a Remediation Contribution Order may have on external investors and companies not strictly liable.

On that basis, the FTT found 76 of the respondents jointly and severally liable and held that Remediation Contribution Orders are “essentially not to be fault-based, providing a route to secure funding for remedial works, with the emphasis on protection of leaseholders/residents and helping to expedite remedial action.”

CONCLUSION

In conclusion, it is evident that developers and associated companies using a wider corporate group brand name are firmly in the court’s sights when it comes to facing liability to pay for or contribute towards the cost of remediation works. This is likely to be the first of many more judgments to come as this area of law develops and it is important to remember that each case will be judged on its own merits.

Related latest updates
PREV NEXT

Related content

Arrow Back to Insights

Shorter Reads

BUILDING SAFETY ACT AND REMEDIATION CONTRIBUTION ORDERS: CONSIDERATIONS FOR INVESTORS

Since the introduction of the Building Safety Act 2022, landlords have faced increased liability as the Government has taken steps to improve building safety, reduce existing building safety risks and to see that leaseholders are protected from incurring the costs of building remediation works.

Here we look at the judgment of the First Tier Tribunal (“FTT”) in Grey GR Limited Partnership v Edgewater (Stevenage) Limited and Others, as it highlights important building safety considerations for investors and high-net worth individuals who may be concerned about the implications of Remediation Contribution Orders.

Published 7 March 2025

Associated sectors / services

  • Construction

Authors

Since the introduction of the Building Safety Act 2022, landlords have faced increased liability as the Government has taken steps to improve building safety, reduce existing building safety risks and to see that leaseholders are protected from incurring the costs of building remediation works.

Here we look at the judgment of the First Tier Tribunal (“FTT”) in Grey GR Limited Partnership v Edgewater (Stevenage) Limited and Others, as it highlights important building safety considerations for investors and high-net worth individuals who may be concerned about the implications of Remediation Contribution Orders.

We draft this content in advance of the awaited Court of Appeal judgment in Triathlon Homes LLP v Stratford Village Development Partnership & Others which is expected to be handed down in March 2025.

BACKGROUND

Vista Tower, a 16-storey block of flats, approximately 49.5 metres high, located in Stevenage, Hertfordshire, was converted from offices into flats by Edgewater (Stevenage) Limited (“Edgewater”) in 2015. Grey GR Limited Partnership (“Grey GR”) purchased the freehold interest in Vista Tower, on behalf of the railway workers pension fund, Railpen, in 2018.

Vista Tower was previously in the news in 2024 after the former Department for Levelling Up, Housing and Communities obtained a Remediation Order against Grey GR.  In that instance the FTT granted a Remediation Order against Grey GR requiring building safety defects to be fixed by 09 September 2025.

Before this Remediation Order was granted, Grey GR applied to the FTT seeking Remediation Contribution Orders against the developer, Edgewater, and 95 other respondents, pursuant to Section 124 of the Building Safety Act 2022.

CURRENT POSITION

The result of both Grey GR cases is that the remediation works are due to be completed by 09 September 2025 and that 76 respondents have been found jointly and severally liable to pay the total remediation cost of £13,262,119.

We are currently unaware of the financial arrangements by which the remediation costs will be funded, but that arrangement could lead to further litigation.

RELEVANT DEFECTS

The Grey GR decision provides clarity on the test for “relevant defects” pursuant to section 120(1) of the Building Safety Act 2022. The FTT found that the definition of a defect goes much further than non-compliance with a Building Regulation.

For the purposes of section 120(2) of the Building Safety Act 2022, “defect” has generally been understood to mean “anything done (or not done) or anything used (or not used) in connection with relevant works” and which “causes a building safety risk”. The FTT’s decision makes clear that this is not strictly limited to non-compliance with a Building Regulation.  Rather, non-compliance with a Building Regulation is “merely one way, not the only way, in which something could be a “defect” for these purposes.” The definition of a defect covers any aspect of building works which could pose a safety risk. “Safety risk” being a broad and open definition. It seems that compliance with a Building Regulation is not a full shield to allegations of building safety risks. In applying a broad and open definition, the FTT’s decision mirrors the intention of the Building Safety Act 2022.

The FTT’s decision also provides clarity that, pursuant to section 120(5) of the Building Safety Act 2022, any risk greater than “low” risk could be considered to be a building safety risk.

The FTT held that Remediation Contribution Order determinations will be fact sensitive, dependent on the facts of each individual case.

It is therefore imperative that investors and high net worth individuals consider the importance of regular and rigorous building safety assessments during the construction phase in order to best protect their investment. Identifying liability for safety risks, remediation procedures and litigation post-completion are costly and therefore the best return on investment will be achieved by ensuring the strictest compliance with building safety at the time of construction.

WHAT IS “JUST AND EQUITABLE?”

The FTT have the power to make a Remediation Contribution Order if it is “just and equitable” to do so. Having made particular reference to the extent of knowledge of combustible materials used in construction, the FTT provided further clarity by giving examples of how the “just and equitable” test, pursuant to section 124(1) of the Building Safety Act 2022 is to be applied as against multiple respondents. When examining the “just and equitable” test in this case the FTT considered these key factors, among others:

  1. Profit and funding flow between various respondents and whether a respondent is part of a wider corporate group.
  2. Associated companies will not be deemed automatically liable unless the company can establish good reasons as to why it should not contribute to the remediation costs.
  3. If there existed a clear pattern whereby directors and/or shareholders were drawn from small connection pools, whether related by familial links or other business associations.
  4. If the respondent was involved in the property development / construction sector.
  5. The impact that a Remediation Contribution Order may have on external investors and companies not strictly liable.

On that basis, the FTT found 76 of the respondents jointly and severally liable and held that Remediation Contribution Orders are “essentially not to be fault-based, providing a route to secure funding for remedial works, with the emphasis on protection of leaseholders/residents and helping to expedite remedial action.”

CONCLUSION

In conclusion, it is evident that developers and associated companies using a wider corporate group brand name are firmly in the court’s sights when it comes to facing liability to pay for or contribute towards the cost of remediation works. This is likely to be the first of many more judgments to come as this area of law develops and it is important to remember that each case will be judged on its own merits.

Associated sectors / services

  • Construction

Authors

Need some more information? Make an enquiry below.

    Subscribe

    Please add your details and your areas of interest below

    Specialist sectors:

    Legal services:

    Other information:

    Jurisdictions of interest to you (other than UK):



    Article contributors

    Enjoy reading our articles? why not subscribe to notifications so you’ll never miss one?

    Subscribe to our articles

    Message us on WhatsApp (calling not available)

    Please note that Collyer Bristow provides this service during office hours for general information and enquiries only and that no legal or other professional advice will be provided over the WhatsApp platform. Please also note that if you choose to use this platform your personal data is likely to be processed outside the UK and EEA, including in the US. Appropriate legal or other professional opinion should be taken before taking or omitting to take any action in respect of any specific problem. Collyer Bristow LLP accepts no liability for any loss or damage which may arise from reliance on information provided. All information will be deleted immediately upon completion of a conversation.

    I accept Close

    Close
    Scroll up

    Find out about Business

    Find out about Dispute Resolution

    Find out about Individuals & Families

    Find out about Real Estate

    We are Collyer Bristow - The law firm for those that
    value individuality, creativity and collaboration.

    Legal & Pricing info Regulatory InformationAccessibilitySitemapPricing and service information

    Read our latest article: BUILDING SAFETY ACT AND REMEDIATION CONTRIBUTION ORDERS: CONSIDERATIONS FOR INVESTORS

    Read our latest article: ‘Long Term Residence’ in the UK: Tax Consequences for International Private Clients

    Read our latest news: Stephen Gawne named by clients as a Thomson Reuters “Stand-out Lawyer”

    Read our latest news: Write your next chapter | apply for your Training Contract with Collyer Bristow

    Read our latest article: How to register as a British citizen

    ExpandNeed some help?Toggle

    < Back to menu

    I have an issue and need your help

    Scroll to see our A-Z list of expertise

    Get in touch

    Get in touch using our form below.



      Business Close
      Private Wealth Close
      Hot Topics Close