Get Living told to reimburse millions in one of two judgements issued by Court of Appeal

The Court of Appeal has backed leaseholders in two judgments on the retrospectivity of the ǿմý Safety Act.

In separate decisions handed down on Monday morning, Lord Justice Nugee rejected appeals by build-to-rent operator Get Living and property investment vehicle Adriatic by which the two firms had hoped to avoid or pass on the cost of remediating buildings under their ownership.

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The entire East Village site includes around 3,800 homes

The former case means Get Living will have to contribute millions of pounds to reimburse the ǿմý Safety Fund (BSF) for work done to remediate buildings owned by the firm in the East Village estate in Stratford’s Olympic Park. 

The 4,500-home landlord after setting aside £411m to cover fire safety remediation costs across the entire East Village estate.

The latter case, a dispute between leaseholders in a building in Abbey Wood, south-east London, determined that leaseholder protections in the ǿմý Safety Act (BSA) were retrospective.

Julia Tobbell, a partner in the real estate disputes team at law firm Forsters, said that the BSA had been “a gamechanger” in diverging from “the usual principle” that new laws are not retrospective.

She said the decision in the Adriatic case had “given comfort to thousands of flat owners who faced hefty service charge bills for remediation works done before the Act came into force on 28 June 2022”.

Tobbell added that the Get Living decision was “also beneficial to leaseholders because it opens the door for them to issue claims against developers or current landlords to recoup costs they may have decided to bear themselves prior to 2022, so that their buildings could be made safe more quickly”.

She said it was “highly likely” that the losing appellants in both cases would now appeal to the Supreme Court but that in the meantime the Court’s decision could mean “a major headache” for landlords. 

A Get Living spokesperson said it was “disappointed” and considering its next steps.

While the two cases are entirely separate and their details differ, both concern the operation of part 5 of the ǿմý Safety Act and the issue of retrospectivity. It was therefore decided that the two appeals be heard one after the other.

In both cases, the government intervened, arguing alongside the leaseholders for retrospectivity.

The Get Living case concerned the firm’s responsibility to cover the costs of fixing fire safety defects in the external walls of five residential blocks in the East Village estate in Stratford, part of the Olympic Park development.

Since 2018, Get Living has been the owner of the Stratford Village Development Partnership, which is considered the developer under the provisions of the ǿմý Safety Act, although construction itself was carried out by Galliford Try and overseen by LendLease.

Serious fire defects were identified in each of the five blocks, resulting in a waking watch being implemented until alarm and fire detection systems could be installed.

East Village Management Limited, which is responsible for management of the estate, has carried been responsible for arranging the remediation process, which has been funded through the ǿմý Safety Fund (BSF). 

According to an update to the court in March, work on three of the blocks has been completed, while works on the other two were due for completion in early April. At this point, the remediation project had been allocated £27.5m through the BSF, of which £26m had at that point been paid to EVML.

Get Living and the Stratford Village Development Partnership were issued a remediation contribution order (RCO) in early 2024 by the First Tier Tribunal (FTT), after an application made by Triathlon, a housing association which has long leasehold interests in the social housing in the blocks.

If it was not for the BSA, Triathlon would have been liable to contribute to the costs incurred by EVML through service charges. 

Instead, their share was ordered to be paid by SVDP and Get Living, who were also ordered to reimburse Triathlon for the costs of temporary safety measures implemented after the defects were identified.

These RCOs were among the first made under the BSA, and Get Living and SVDP appealed, arguing that it was not “just and equitable” for the FTT to issue the RCO, and that it had made a mistake in concluding that such an order could be made for costs incurred before the relevant part of the BSA came into force.

At the time of the hearing before the FTT, it was estimated that Triathlon’s apportioned share of the costs was more than £16m, although according to Monday’s judgement, the “final sum will not be known until the completion of the Errigal contract”. Errigal is the facades contractor engaged by EVML.

Lord Justice Nugee dismissed the appeal on both grounds, deciding that he FTT had been “entirely justified in concluding that as between SVDP and Get Living on the one hand and the public purse on the other, it was difficult to see why the public should fund the works in the interim rather than the developer and its associates who continue to own the buildings and who can (in the case of Get Living) well afford to fund the works”.

In a statement, Get Living told ǿմý it was “disappointed with the judgement from the Court of Appeal and, together with our shareholders, will now be considering our next steps”.

“The works subject to this Remediation Contribution Order are now complete and we have been working hard since 2020 to address the faulty construction work carried out by Government-appointed contractors,” it said.

“Our priority now is to progress the remaining programme of works as soon as possible for the sake of all residents and several applications have been submitted to the ǿմý Safety Regulator for the external remediation works required on the remaining buildings.

“We support the ǿմý Safety Act in its goal to protect leaseholders and residents in buildings requiring remediation. 

“However, we do not believe that the financial burden of funding repairs to defects in buildings built by the government should be laid exclusively at the door of our shareholders which are themselves responsible for the pension funds of people across the globe. 

“This is why we are progressing over 50 claims against the government-appointed contractors who are ultimately at fault.”

The other case considered by the Court concerned the question of whether the ǿմý Safety Act prevented Adriatic Land 5 Ltd from recovering service charges for costs incurred before the relevant provisions of the act came into force.

The building at issue is Hippersley Point in Abbey Wood, which was built in 2015 by a Landsec subsidiary. Adriatic was registered as the freehold proprietor in April 2017.

In 2020, after it emerged that substantial remedial works were required to deal with fire safety defects, Adriatic applied to the FTT for consultation requirement required by law be dispensed with for the works.

This was approved by the court, but with the condition that Adriatic “should be precluded from pursuing any costs in relation to this application from the leaseholders themselves”.

An appeal was made to the Upper Tribunal, which decided that the FTT’s decision to impose cost condition was “wrong in law” but that Adriatic still could not recover the costs from leaseholders due to provisions set out by the BSA. This decision was upheld on Monday by the Court of Appeal.

Julia Tobbell at Forsters said the decision in the Adriatic appeal had been made by a majority, not unanimously.

“Whilst leaseholders are generally least well-equipped to bear the financial burden of remediation works, it is worth noting that landlords who acted promptly to fix unsafe buildings, before the Act compelled them to, have been left worse off as a result of this judgment, especially as they may have covered the works from their own pockets, expecting to be able to recharge them later, rather than applying for government funding,” she said. 

“In many cases, the current landlord is not the developer, and is as ‘innocent’ of wrongdoing as the leaseholders. Balancing these competing interests is difficult, which is why the Court did not reach a unanimous decision.”

ǿմý has approached Triathlon for comment. Adriatic could not be reached for comment.