The First-tier Tribunal (FTT) has made a Remediation Contribution Order (RCO) against 76 companies under section 124 of the Building Safety Act 2022 (BSA), ordering them to jointly and severally contribute over £13 million towards the remediation of building safety defects at Vista Tower, Stevenage.

We summarise below some of the FTT's key findings in this case and consider where these might have wider significance for remediation schemes across the country that are currently being decided upon.

Recap: Remediation Contribution Orders

As we described in more detail in our earlier insight on First substantive Remediation Contribution Orders, RCOs (together with Remediation Orders) form part of what are collectively referred to as the "leaseholder protections" established by the BSA. These are aimed at protecting leaseholders in multi-occupied residential buildings from the costs associated with remediating historical building safety defects.

Under section 124 of the BSA, the FTT may, on the application of an interested person – and if it considers it "just and equitable" to do so – make a RCO in relation to a "relevant building", requiring a company to make payments to a specified person for the purpose of meeting costs incurred or to be incurred in remedying relevant defects, or taking relevant steps in relation to remedying relevant defects.

An RCO may be made against a landlord, a person who was a landlord at the qualifying time (i.e. the start of 14 February 2022), or the building's developer, as well as any person "associated" with any of these parties. "Associated" parties are broadly defined and encompass, for example, both parent companies, subsidiaries, and sister companies within a group structure, as well as companies that share or have shared a director in the five years leading up to 14 February 2022.

Background

Vista Tower was the subject of the former Department for Levelling Up, Housing and Communities (DLUHC)'s "test case", in which it obtained a Remediation Order (RO) in mid-2024 under section 123 of the BSA against the freehold owner, Grey GR Limited Partnership (Grey). The RO required Grey to fix certain building safety defects, including in relation to combustible PIR insulation, panels with a combustible polystyrene core, and lack of effective cavity barriers and fire stopping, by 9 September 2025.

Grey applied to the FTT for RCOs to be made against the original developer, Edgewater (Stevenage) Limited (Edgewater) as well as 95 associated companies (the Respondents), for costs incurred and expected to be incurred in remediating the building safety defects. Grey has also commenced proceedings in the Technology and Construction Court for Building Liability Orders against Edgewater and two of the further Respondents, although these proceedings are yet to be heard.

FTT decision

When exercising its discretion as to whether it was "just and equitable" to make the RCO, the FTT followed the decision in Triathlon Homes LLP -v- (1) SVDP (2) Get Living plc (3) EVML[2024] UKFTT 26 (PC) (in which Gowling WLG acted for the successful applicant). The FTT gave some useful further guidance, particularly in relation to:

  1. Meaning of "relevant defect"

    The fire safety experts had opined that it was reasonable to interpret "defect" as "building work that did not comply with the Building Regulations 2010 as at 9 October 2014".

    The FTT disagreed, observing that it would be "surprising" if the BSA limited “defect” to non-compliance with the pre-Grenfell version of the building regulations, which Dame Judith Hackitt's Independent Review had found not to be fit for purpose. Instead, the FTT held that non-compliance with the building regulations was "merely one way" and "not the only way" of defining a defect for the purposes of the BSA.

  2. Low / medium: tolerable risk rating in a fire risk assessment of the external walls (FRAEW)

    The Respondents had also argued that whether something causes a "building safety risk" as defined in the BSA will depend on "whether the risk is tolerable, having regard to the other features and characteristics of the building."

    The fire safety experts endorsed that approach, opining that a "medium: tolerable" rating in a FRAEW carried out under PAS 9980 would not be a building safety risk.

    The FTT rejected this argument, stating that the "better view is that any risk above 'low' risk (understood as the ordinary unavoidable fire risks in residential buildings and/or in relation to PAS9980 as an assessment that fire spread would be within normal expectations) may be a building safety risk."

  3. Recoverable costs

    The experts engaged in the case considered that parts of the remedial scheme were, from a purely technical perspective, "too comprehensive". On that basis, counsel for the Respondents argued that anything which has not been shown to be "unavoidable" should be outside the scope of an RCO.

    However, the FTT held that although the experts' view carried "significant weight", this did not exclude recovery of those costs and that when considering whether it is "just and equitable" to include certain costs it is "helpful to ask whether the relevant remedial works/costs were within a reasonable range of responses/costs". In this case, the range was "relatively wide".

    The FTT also accepted Grey's submissions that it had followed expert advice throughout, had had to act quickly to protect residents, work with the Building Safety Fund, and satisfy the Secretary of State by carrying out the remedial works, even though it had not itself created the relevant building safety risks.

  4. Hierarchy of liability

    The Respondents had argued that in exercising its discretion, the FTT should take into account several factors including Grey's ultimate ownership by a sophisticated pension fund with substantial assets. Further, Grey had chosen to purchase the freehold a year after the Grenfell tragedy, having investigated fire safety matters and obtained a warranty from the developer, Edgewater – which it knew was a single-purpose vehicle but nonetheless sought no further warranties or guarantees for its obligations.

    The FTT held that:

    • While it is true that Grey and its associates do fall within the "categories of body corporate or partnership which could be required by a RCO to make payments", it considered the developer and its associates to be "higher in the hierarchy of liability".
    • The developer – who it described as "a key target, at the top of the hierarchy of liability (or waterfall)" – and its associates should therefore "pay before, the Applicant (let alone the taxpayer or leaseholders)".
    • Grey had obtained a "surprisingly firm warranty" from Edgewater, which transpired to be "untrue". Furthermore, the sellers had failed to disclose "serious warnings" and had obtained a "misleading fire risk assessment". This makes it difficult to criticise Grey for proceeding with the purchase without insisting on security for the warranty it obtained from Edgewater.

    Finally, the FTT observed that the "new jurisdiction" of RCOs appears "not to be fault-based". One of its main purposes is to ensure that the "pot is filled promptly" to ensure that remedial action can be expedited, with an emphasis on the protection of leaseholders and residents.



  5. Associated persons test

    6. This is understood to be the first case to be heard in which RCOs have been sought against a large number of "associated persons", taking advantage of what the FTT described as the "wide association provisions" of the BSA. The FTT held that those Respondents which it included in the RCO were "sufficiently linked for us to consider it just and equitable to expect them to arrange between themselves what contributions should be made by each company".

    Many of the Respondents included in the RCO were "associated" with the developer by virtue of common directorship. Some of the further factors the FTT took into consideration included that:

    • the business of each of these companies involved the property, property development and/or building sectors;
    • most of those with the “Edgewater” name were presented to potential funders and/or third parties as if they were part of a group;
    • they all had family / ownership links to one of the two families who owned the developer company; and
    • they were all "likely to be linked by financial or other dealings and their records are opaque and/or do not appear reliable", and it appeared that many of the relevant Respondents were "not actually run as carefully separated SPVs but as part of a fluid, disorganised and blurred network or structure".

Commentary

The FTT decision in the Vista Tower case – although not binding in later cases – sheds welcome light on how the BSA is likely to be applied by the Tribunal in practice. It is a useful reminder that both the "just and equitable" and the associated persons tests are deliberately wide so as to give effect to the policy intent of the BSA, ensuring "that the money can be found" and remedial work can be carried out promptly.

The FTT's comments on the weight to be given to "medium:tolerable" as compared with "low" FRAEW risk ratings may be of significance to those currently procuring remedial schemes for building safety defects. It is not yet clear whether they will impact on how such ratings are perceived in the market; we will be monitoring market developments in this regard.  It is also not known at this stage whether this determination by the FTT will be appealed by the Respondents as clarity is needed for the reasons mentioned.

If you have any questions about this article or would like further advice on any of the issues raised, please get in touch with Sue Ryan or Sarah Dyer.