The First Tier Tribunal and the Building Safety Act – the story so far…

Remediation Order

In August 2023, the FTT handed down its decision in Sarah Waite, Karin Ida Christina Martensson & Other leaseholders v Kedai Limited. The case related to a development which included two blocks, one of which had been converted from former offices into residential accommodation.

There were various typical fire safety issues within the development, including the presence of ACM cladding, a lack of fire stopping, cavity barriers and defective insulation behind the cladding (amongst other issues). It was common to both parties that works were indeed necessary.

This application for a RO was brought by a group of leaseholders against their landlord (who was the freeholder of the development). In September 2022, the application was initiated by one leaseholder and the FTT invited other leaseholders to join the application (which nearly all did by December 2022). The RO was granted some 11 months later indicating applications for ROs will likely be determined expeditiously, certainly by reference to the length of time that County Court and High Court proceedings take.

It is fair to say that the FTT flexed its new powers considerably and rightly acknowledged the broad scope of the Act and the very wide discretion it empowers the FTT with. The FTT directed itself that it did not consider to be in any way restricted by any other statutory framework (including Building Regulations and/or PAS9980:2022), contractual terms (i.e. the lease) or indeed any case law.

The FTT adopted a blackletter and formulaic approach to determining the application for the RO – simply working through the definitions within the BSA to determine whether the qualifying criteria for the making of an RO had been met and, deciding that it was, promptly making an RO without much more consideration.

The most testing part of that exercise involved determining whether a “relevant defect” was present. That was achieved by a combination of expert evidence, photographs, a site inspection and certain admissions by the landlord. It is notable that the application was almost entirely reliant on the evidence that was produced by the landlord rather than the leaseholders. In a similar vein, the FTT decided that it was unhelpful to assign formal burdens of proof on either party. The FTT considered that all the leaseholders needed to do was to make an initial and coherent case that there were relevant defects that cause a building safety risk. Once that has been done it becomes an “evidence-based exercised, led predominantly by inspection reports and expert evidence, but also informed by the Tribunal's own experience and expertise in building matters…”. The FTT decided that the vast majority (but not all) of the issues constituted “relevant defects” (for which an RO can be made).

The FTT recognised the importance of a RO specifying the required scope of works so that the Respondent knew exactly what it should do to remedy the defect. That said, it also acknowledged that a broad schedule of works will be sufficient in some circumstances with the ability for either party to apply for a variation or further directions.

In this case, the landlord was granted over 26 months to complete the remedial works (notably this was the period that the landlord requested). Additionally, as the FTT is a ‘no-costs’ forum, the default position was maintained in that each party were to bear its own costs of the proceedings. However, there was still the possibility that the landlord could recover the costs of proceedings as service charge from non-qualifying leaseholders – the FTT ordered that 80% of the costs of the landlord’s costs of proceedings could not be passed on to the non-qualifying leaseholders through service charge.

Have the floodgates now opened? Only time will tell. But the FTT’s position is clear – they have very wide powers which are designed to protect leaseholders and will exercise them accordingly.