Building Safety Act 2022: Key Court of Appeal decision as to whether remediation contribution orders could be made in respect of costs incurred prior to commencement of s.124 BSA 2022
The Court of Appeal earlier this year considered a “leapfrog” appeal from the First-tier Tribunal in respect of whether remediation contribution orders made against a developer and an associated company were just and equitable, and whether those orders could be made retrospectively in respect of costs incurred prior to commencement of s.124 of the Building Safety Act 2022.
The background
Triathlon Homes LLP v Stratford Village Development Partnership and others (Secretary of State for Housing, Communities & Local Government intervening) [2025] related to a development comprising 5 residential blocks in London, which had originally formed part of the London 2012 Olympic Games Athletes’ Village and were later adapted into permanent housing.
Stratford Village Development Partnership had developed the subject blocks, appointing a number of contractors to deliver the construction. Appellant Triathlon Homes LLP is a social housing provider holding social and affordable housing units in the subject property on long leases. A management company is appointed and is responsible for the repair and maintenance of the blocks, including remedy of defects.
In 2020, significant fire safety defects and risks were identified in the blocks, requiring major remediation works. An application was made to the Building Safety Fund and a grant of funding awarded for the works.
The Building Safety Act 2022 states at Schedule 8 paragraph 2:
“2 (2) No service charge is payable under the lease in respect of a relevant measure relating to a relevant defect if a relevant landlord –
- is responsible for the relevant defect, or
- is associated with a person responsible for the relevant defect.”
As a result, the leaseholders (including Triathlon) were not liable to pay service charges in respect of the costs incurred for fire safety remediation works if the developer or an associated company is the landlord or a superior landlord. The respondent in this appeal and its associated companies were the developer and superior landlords.
Under the Building Safety Act, Triathlon was not liable to pay service charges for the works, the costs for which had been incurred by the management company. An application under s.124 of the BSA 2022 was made to the First-tier Tribunal by Triathlon for remediation contribution orders (“RCOs”), requiring the developer and its parent company to pay Triathlon’s share of the costs.
Section 124(1) of the Building Safety Act 2022 provides that the “The First-tier Tribunal may, on the application of an interested person, make a remediation contribution order in relation to a relevant building if it considers it just and equitable to do so.”
The remediation contribution orders were granted, and an appeal was made in the Upper Tribunal. This was moved up to the Court of Appeal on a leapfrog basis, the Upper Tribunal not engaging itself in the substance of the appeal, which considered whether:
- the FTT had been right, and it had been just and equitable, to grant the RCOs; and
- the RCOs could relate to costs incurred before s.124 of the BSA 2022 commenced.
The decision
The Court of Appeal dismissed the appeal unanimously, finding that it had been just and equitable for the FTT to grant the RCOs and concluding that an RCO could be made retrospectively in respect of costs incurred prior to s.124 of the BSA 2022 coming into force.
- Had it been “just and equitable” to grant the RCOs?
The appellant developer had argued that it had not been just and equitable for the FTT to grant the RCOs because the costs of the works were covered by the Building Safety Fund (“BSF”) grant.
The Court of Appeal dismissed all grounds argued by the developer, agreeing with the FTT that the purpose of the BSA 2022 was to ensure developers were accountable for the remedying of defects in building safety and, although the Building Safety Fund grant had been awarded, it remained just and equitable to grant RCOs that required the developer to pay. Public funding from the BSF should be a last resort.
The purpose of s.124 was to allow for costs of building safety remedial works to be passed onto corporate bodies such as landlords, developers and their associate companies. The Court of Appeal found that the BSF had not been intended to take the place of the BSA 2022, and that it was therefore just and equitable to make an RCO.
The FTT’s decision had referenced Regulation 3 of the Leaseholder Protections (Information etc) (England) Regulations 2022. The developer argued that it had erred in doing so, on the grounds that the regulation referred only to landlords and not to developers or non-landlord entities. The Court of Appeal disagreed, stating that Regulation 3 reflects the purpose of the BSA 2022 and that superior landlords and their associated companies were considered “responsible landlords” to the effect that the developer’s wealthy parent company could be successfully pursued.
- Had it been correct to include in the RCOs costs incurred prior to commencement of s.124?
The Court of Appeal went on to consider whether s.124 of the BSA 2022, the enabling provision that gives the FTT powers to make a remediation contribution order, can be applied retrospectively, allowing the FTT to make RCOs in respect of costs incurred prior to commencement of the legislation on 28 June 2022. In this case, the Court’s decision affected over £1m of costs.
The Court dismissed the developer’s arguments, agreeing unanimously with the FTT that s.124 could be applied retrospectively. LJ Nugee in his judgment found that the intention of the legislation was clear.
The Court referenced the recent decision in URS Corporation Ltd v BDW Trading Ltd [2025] which found that those liable for damage in a building safety context such as consultants and contractors, as well as their insurers, should be held to account and risk allocated accordingly, spanning an extended period of up to 30 years in order not to undermine the provisions of the BSA 2022.
In the present case, the Court found that this approach supported a retrospective application of s.124, allowing the costs of building safety works to be passed on to those responsible for the defects. At para 153 of the judgment, LJ Nugee addresses an argument by the developer that this interpretation may be considered unfair as, in principle, it could be applied to service charges paid over 25 years ago relating to, for example, the replacement of fire doors. The BSA 2022 allows the FTT to make an RCO “if it is just and equitable to do so”, and the Court of Appeal accordingly dismissed the developer’s argument. The appellant developer has applied for permission to appeal to the Supreme Court, so this case is certainly one to watch.
