A New Vista: A Remediation Contribution Order Granted Against 76 Entities

Vista Tower marks a significant decision by the First-Tier Tribunal (“FTT”) in relation to remediation contribution orders (“RCOs”) under the Building Safety Act 2022 (“BSA”). The FTT held that it was just and equitable to make an RCO for approximately £13.2m against 76 of 96 respondent companies for the remediation works at Vista Tower. Importantly, this is the first RCO where the FTT considered whether it was just and equitable to order an RCO against an associated company linked through one or two directors to the original developer.

Background

Vista Tower is 16-storey block of flats in Stevenage. It was converted from offices into residential flats in 2016/2017 by Edgewater (Stevenage) Ltd (“Original Developer”). Grey GR Limited Partnership (“Grey GR”) purchased the freehold in 2018 as an investment for a pension fund.

Investigations post-Grenfell revealed significant building safety defects, including fire safety defects regarding fire stopping and compartmentation. While Grey GR commenced remediation works in January 2024, the Government sought a remediation order (“RO”) requiring Grey GR to complete the remediation works by 9 September 2025.

Prior to the RO, Grey GR applied for an RCO against the Original Developer and 96 other respondents seeking recovery of the majority of its costs for the remediation works.

What is a Remediation Contribution Order?

An RCO requires a specified body corporate or partnership to pay the costs incurred, or costs to be incurred, in remedying “relevant defects” in a “relevant building”. An RCO can be ordered against a landlord, a developer or a person associated with any of these categories.

The FTT can make an RCO if it considers that it is “just and equitable” to do so.

The Decision

The FTT held that 76 of 96 respondents were jointly and severally liable for approximately £13.2 million of the remediation works at Vista Tower. The FTT did not apportion liability or sums to each respondent; rather it left the respondents to determine what contributions should be made by each.

Liability of the Original Developer

The FTT confirmed the approach taken in Triathlon,[1] the first FTT decision ordering an RCO, that the original developer is at the top of the “hierarchy of liability”. The FTT dismissed arguments that Grey GR was an investor, well-funded, and in the property investment industry. Instead, it stated that the purpose of the BSA is to seek to recover from those at the top of the hierarchy of liability (i.e. the original developer), before those lower down the waterfall, including a freeholder who was not responsible for the defects and importantly, leaseholders.

“Relevant Defect”

Fire safety experts interpreted a defect with regard to an RCO as building works that did not comply with the relevant Building Regulations at the time of construction. Interestingly, the FTT disagreed and held that a defect is not limited solely to non-compliance with the Building Regulations at the time of the works. Rather, it held that non-compliance with Building Regulations is “merely one way, not the only way” to identify a defect for the purpose of an RCO. In its reasoning, the FTT referred to the BSA’s broader purpose to ensure safety in residential buildings and noted that, in her report, Dame Judith Hackitt found that many of the Building Regulations were inadequate.

The “Just and Equitable” Test

This is first time the FTT has considered what is just and equitable in the context of multiple respondents in an RCO application. In particular, the FTT considered in what circumstances it is just and equitable for a company linked by one or two director(s) to an original developer to be responsible for remediation costs where the company may have had no control or involvement in such defects.

All 96 respondents shared at least one director (and often two) with the Original Developer, and therefore were considered “associated” under the BSA for the purposes of an RCO. Comparatively, in Triathlon the associated company was a parent company.

The FTT held that it was just and equitable to find 76 respondents jointly and severally liable. To reach this conclusion, the FTT analysed each of the 96 respondents and provided reasoning as to whether it was just and equitable to order an RCO against each respondent. In its analysis, the factors the FTT considered included, but are not limited to, the following:

1. the business of the Original Developer and associated companies as property, property development and/or being in the building sector;
2. whether the associated company was linked through financial or other dealings to the Original Developer as part of a “fluid, disorganised and blurred network or structures” controlled by the shared directors;
3. whether the associated company had family links to the shared directors;
4. whether the associated company was marketed or presented to potential investors as part of the overall group associated with the Original Developer; and
5. the impact that the RCO would have on external investors who had no link to Vista Tower.

Comment

The FTT has provided welcome guidance for future RCO applications, particularly regarding when it may be just and equitable for an RCO to be ordered against an associated company of an original developer. The FTT’s decision in this case also builds on recent building safety decisions which show a willingness of the courts and tribunals to find developers responsible for the costs of remediation through reliance on the purpose of the BSA.

If you have any questions on RCOs or building safety generally, please contact Edwin Coe’s Building Safety Team.

[1] Triathlon Homes LLP v Stratford Village Development Partnership & Others [2024] UKFTT 26 (PC)

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