Review of Relevant Circumstances for Grant of a Remediation Contribution Order (Triathlon Homes LLP v Stratford Village Development Partnership and others – 2024)

The First-tier Tribunal addressed how the ‘just and equitable’ test contained in the Building Safety Act 2022 should be applied when considering the grant of a Remediation Contribution Order, together with assessment of other relevant circumstances to be considered in an RCO application.

The background

In Triathlon Homes LLP v Stratford Village Development Partnership and others [2024], the applicant owned units, in particular the social and affordable housing units, in five residential blocks in East London, which had originally formed part of the athletes’ village for the London 2012 Olympic Games.

The respondents in the application were the developer (“Respondent 1”), another owner of units in the blocks (“Respondent 2”), and the maintenance and repair company for the blocks jointly owned by the applicant and the owner of other units (“Respondent 3”). Fire risks had been identified at the blocks, with the costs of remedial works estimated to be more than £24.5m.

Respondent 3 had made applications to the Building Safety Fund for grants to cover the costs of the works.

The applicant applied to the First-tier Tribunal seeking reimbursement from Respondent 1 and Respondent 2 of service charges paid to Respondent 3, totalling £1.058m, together with service charges demanded but unpaid of £155,538 and £613,899 of anticipated future service charges.

The applicant also sought reimbursement by Respondent 1 and Respondent 2 of £16.03m, constituting the applicant’s apportionment of the remediation costs.

The decision

The First-tier Tribunal found that making the Remediation Contribution Order was just and equitable, granting the order in the sum of almost £18m in favour of the applicant. The FTT ordered, however, that if the applicant successfully pursued third parties via contract or tort avenues, the sums paid under the RCO should be repaid.

The FTT agreed with earlier decisions that the RCO could be made in respect of costs which were incurred prior to the Building Safety Act 2022 coming into force. S.124 of the BSA 2022 did not expressly differentiate between costs incurred prior to the BSA 2022 coming into force and those incurred after that date.

The FTT also considered whether an RCO could apply to preventative works, undertaken in order to prevent or reduce the severity of a risk, rather than applying only to remedial works undertaken to existing defects. The FTT found that the RCO could be extended to refer to preventative works.

Finally, the FTT considered how to apply the ‘just and equitable’ test, finding the relevant factors in this case to be:

1. Respondent 1 was the site’s developer;
2. Respondent 2 was associated with Respondent 1; and
3. Building Safety Fund funding was uncertain.

The FTT disregarded factors including the applicant’s motivation and the other remedies available to it, the date that the costs had been incurred, and the fact that the application referred only to the applicant’s costs and not the costs of Respondent 3.

Advice and action for landlords

This decision will be of interest to residential block landlords and managers, supporting earlier judgments finding that Remediation Contribution Orders may be made in respect of costs incurred prior to the commencement of the Building Safety Act 2022, that conditions may be imposed on an RCO – in this case, that funds should be repaid where actions against third parties are successful – and providing some guidance on the application of the ‘just and equitable’ test to determine when an RCO should be granted.

The FTT’s finding in relation to the relevant factors for consideration when applying this test will no doubt be carried forward into further RCO applications. We await further decisions with interest.