Remediation Contribution Orders came into force on 28 June 2022. An order can be sought seeking payment towards the costs incurred, or to be incurred, in remedying a defect, ie, a cladding or building safety risk in respect of a qualifying lease. (See Lauren Michaelides's blog as to what is a building safety risk.)
The Secretary of State, the Building Safety Regulator, a local authority, the fire and rescue authority and a person with a legal or equitable interest in the part or whole of the building (ie, landlords or leaseholders) are all able to apply for a Remediation Contribution Order.
An order can be made against a landlord, developer or those "associated" with the developer, current landlord or (if different) the landlord as at 14 February 2022 (for more on the importance of that date see Stuart Pemble's blog on building safety). There are detailed provisions as to who is deemed to be "associated" (see 121 of the Building Safety Act).
This type of order can be used in multiple different scenarios. The explanatory notes to the Building Safety Act give as one example the following situation: “The freeholder for a building is liable for the costs of remediating it under Schedule 8. Having forward funded the remediation, they apply for a remediation contribution order against the parent company of the developer who developed the building. The Tribunal considers that it would be just and equitable to order the developer to make payments to the freeholder in connection with the remediation of the building. The Tribunal issues an order against the company, ordering it to make payments in connection with fixing specified relevant defects. The order specifies that the payments must be made within a specified timeframe.”
In practice, the first Remediation Contribution Order to be made was a completely different scenario to the example scenario set out in the explanatory notes to the Building Safety Act. The first order was made on 13 January this year in the case of Arjun Batish and Others v Inspired Sutton Limited and Others in relation to 9, Sutton Court Road, Sutton. Here the application was made by the leaseholders on the basis that they had paid service charge payments for the remedying of defects and they were asking for those payments to be returned because they had qualifying leases under the Act and the works related to cladding costs, which they were therefore not required to pay (see part 2 of Kate Rushworth's blog on qualifying leases and cladding remedial works). Inspired Sutton Limited, the original landlord, was ordered to pay £194,680.62. Click here for the judgment.
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