As those familiar with the Building Safety Act 2022 (“BSA”) will be well-versed, the BSA introduced two new avenues by which ‘interested persons’ could take action to compel a responsible party to take action to and / or fund the remedial works to “relevant buildings” – Remediation Orders under s123 BSA and Remediation Contribution Orders under s124 BSA, both of which are contingent upon an Applicant establishing the existence of “relevant defects”.
In the recent decision of Secretary of State for Housing and Communities and Local Government v Canary Riverside Estate Management Limited & Others, concerning two applications for a Remediation Order and Remediation Contribution Order respectively, the First Tier Tribunal has provided welcome clarification on the, relatively low, bar that must be reached in order to establish the existence of “relevant defects”.
The Statutory Position
A relevant defect is defined in s120(2) BSA as:
“a defect as regards the building that –
- arises as a result of anything done (or not done), or anything used (or not used), in connection with relevant works, and
- causes a building safety risk”
“Relevant works” are defined under s120(3) as works undertaken in the thirty years prior to enactment of s120(3) relating to the construction or conversion of the building or undertaken or commissioned by or on behalf of a relevant landlord, or works taken after expiry of that period to remedy a relevant defect.
A “building safety risk” is defined as a risk to the safety of people in or about the building arising from the spread of fire or the collapse of the building or any part of it – a reminder that whilst actions under the BSA have to date primarily focussed upon fire safety matters, the remit of the BSA extends beyond this (see, for example, the Building Safety Regulator’s recent circular regarding potential structural safety issues affecting reinforced concrete buildings constructed with ‘transfer slabs’).
It was common ground between the parties that the alleged defects identified arose from relevant works. The question before the Tribunal was therefore whether the alleged defects constituted a “building safety risk”.
The Decision – what is a “relevant defect”?
Relying on the Tribunal’s consideration in Vista Tower that “any risk above “low risk”…may be a building safety risk” (emphasis added), the Respondent had advanced that the intention of s120(2) could not have been to encompass any risk arising from the spread of fire or the collapse of a building as all buildings have some inherent risk. Consequently, any defect identified in a PAS9980 survey as being “low risk” should not amount to a “relevant defect”.
The Tribunal disagreed with this approach, finding that any risk to the safety of people in or about the building arising from the spread of fire or collapse, however small, may amount to a “building safety risk” – “there is no threshold test in s.120, and words such as tolerable,” “low,” “medium,” high” or “ordinarily unavoidable” are noticeably absent”.
It is worth noting also that the Tribunal found that a risk arising from the spread of “fire” within the meaning of s120 encompasses not just a fire in and of itself, but the risk arising from flames, heat, light, gases and smoke generated from burning material.
To the extent that this decision conflicts with the decision reached in Vista Tower the Tribunal disagreed with the conclusion in that case that a “low risk” classification meant a defect could not be a ‘relevant defect’.
This is a timely reminder that First Tier Tribunal decisions are not binding and, in this emerging area of case law, it is likely that different Tribunal panels will reach different conclusions on different facts.
Does the existence of a “relevant defect” mean a Remediation Order / Remediation Contribution Order will be made?
In short – no. Whilst the threshold for establishing the existence of a defect is therefore relatively low, it will be of some comfort to potential Respondents that the Tribunal did not consider that it necessarily follows that the existence of a “relevant defect” means that a Remediation Order / Remediation Contribution Order will be made in respect of that defect.
Comment
Whether an item is a “relevant defect” will be considered at the date of the hearing.
If any risk may amount to a “building safety risk” there may be more “relevant defects” at the hearing than building owners / managers anticipated.
Whilst it may not be ‘just and equitable’ to make a Remediation Contribution Order based on a ‘low risk’ relevant defect, there is an inherent conflict facing freeholders between the work it may be compelled to do / funds it may be required to expend to remedy an expansively defined “relevant defect”, and the recourse it may have against an original contractor / developer by way of a claim (for breach of contract or otherwise) by reference to the standards in place at the time of construction and / or under the Self Remediation Terms. Those terms (as acknowledged by the Tribunal in Empire Square) require remediation only to a “tolerable” risk.
What to do?
- Put forward a positive case on Relevant Defects at an early stage
- Seek to agree remedial scopes asap
- If possible / practical, engage early with original contractors and engage them in the FTT proceedings to achieve buy in to the terms agreed in those proceedings