First Remediation Order obtained by Government under the Building Safety Act 2022

The government has succeeded in its first remediation order under the Building Safety Act 2022 – but the tribunal continues to emphasise a pragmatic 'no fault' approach.  Landlords will be relieved by the Tribunal's comments that Grey GR, despite its assets, had a right to fund the works via public money.

Judgment has been handed down in the case of DLUHC v Grey GR, with the government succeeding in its first remediation order claim. The case has been hailed as a landmark and evidence of the government's determination to ensure building safety defects are dealt with by landlords in a timely manner. 

Grey GR is the landlord of a 16-storey block of flats in Stevenage known as Vistry Towers. The block was converted from offices into flats in 2015 by the developer, Edgewater (Stevenage) Limited, from whom Grey GR purchased the freehold in 2018 on behalf of Railpen, the railway workers pensions fund.

Grey GR was put on notice by Stevenage Borough Council in early 2019 that there were combustible panels in use on the building; a subsequent inspection held that based on the layout and fire precautions in place there was no need for immediate action. Subsequently it became clear that there was actually a need for remediation and Grey GR applied in March 2021 to the newly instituted Building Safety Fund (BSF).

In December 2020, after preliminary investigations and a tender process carried out on behalf of Grey GR, the BSF paid the first tranche of a grant that had been estimated at £10 million, but it was by that stage clear that more extensive works were needed that would in fact cost closer to £14.5 million.

Grey GR appealed for the extra funding but in November 2021 this was rejected. In January 2022 the government revised its guidance on what was necessary to remediate cladding defects, bringing out the PAS9980 guidance so as to take a more pragmatic approach.

Grey GR sought to then revise its scheme of remediation so as to comply with the later guidance, a process which took some time, as it involved instructing fire engineers (then in short supply) to undertake a new audit and develop a new schedule of works for the new remediation scheme.

The Department for Levelling Up, Housing and Communities, frustrated with lack of progress and seeing Grey GR as dragging its heels, made an application in November 2022 for a remediation order pursuant to section 123 of the Building Safety Act 2022.  

In its judgment, the First-tier Tribunal considered that it had both the power to and a discretion as to whether to make a remediation order. 

Having reviewed the progress made by Grey GR to remediate the building, the Tribunal declined to apportion blame for the delay. Instead, the Tribunal commented that the facts of the case and in particular the works required and the situation of the relevant parties were much more relevant to the exercise of the discretion.  The Tribunal specifically commented that 'our jurisdiction should be more practically focussed on ensuring the defects are remedied in a responsible fashion'.

The Tribunal agreed with DLUHC that the whole focus of the Building Safety Act 2022 is on leaseholder protection.  Although the Tribunal found that there had been progress on both sides in working towards remediation since the application was made, the Tribunal nevertheless considered it appropriate to make a remediation order, to operate as a 'backstop' and last resort for the leaseholders should there be any further undue delay to the remediation, given that those leaseholders were not a party to the construction contracts in place.

The government has demonstrated with this application that it is prepared to use the Building Safety Act to ensure that cladding remediation happens.

Once again, the Tribunal has focused on the underlying purpose of the Building Safety Act being leaseholder protections and a significant contributing factor to the remediation order being made was the support of 57 leaseholders to the application.  Where leaseholders are seeking a remediation order and the relevant criteria are met, it seems likely that the Tribunal will make a remediation order to protect those leaseholders, even where there landlord has demonstrated that it has taken steps towards undertaking the remedial works.