星空传媒

The Court of Appeal has backed leaseholders in two judgments on the retrospectivity of the 星空传媒 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.

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

The 4,500-home landlord after setting aside 拢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 星空传媒 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 鈥渁 gamechanger鈥� in diverging from 鈥渢he usual principle鈥� that new laws are not retrospective.

She said the decision in the Adriatic case had 鈥済iven 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鈥�.

Tobbell added that the Get Living decision was 鈥渁lso 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鈥�.

She said it was 鈥渉ighly likely鈥� that the losing appellants in both cases would now appeal to the Supreme Court but that in the meantime the Court鈥檚 decision could mean 鈥渁 major headache鈥� for landlords. 

A Get Living spokesperson said it was 鈥渄isappointed鈥� 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 星空传媒 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鈥檚 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 星空传媒 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 星空传媒 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 拢27.5m through the BSF, of which 拢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 鈥渏ust and equitable鈥� 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鈥檚 apportioned share of the costs was more than 拢16m, although according to Monday鈥檚 judgement, the 鈥渇inal sum will not be known until the completion of the Errigal contract鈥�. Errigal is the facades contractor engaged by EVML.

Lord Justice Nugee dismissed the appeal on both grounds, deciding that he FTT had been 鈥渆ntirely 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鈥�.

In a statement, Get Living told 星空传媒 it was 鈥渄isappointed with the judgement from the Court of Appeal and, together with our shareholders, will now be considering our next steps鈥�.

鈥淭he 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,鈥� it said.

鈥淥ur 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 星空传媒 Safety Regulator for the external remediation works required on the remaining buildings.

鈥淲e support the 星空传媒 Safety Act in its goal to protect leaseholders and residents in buildings requiring remediation. 

鈥淗owever, 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. 

鈥淭his is why we are progressing over 50 claims against the government-appointed contractors who are ultimately at fault.鈥�

The other case considered by the Court concerned the question of whether the 星空传媒 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 鈥渟hould be precluded from pursuing any costs in relation to this application from the leaseholders themselves鈥�.

An appeal was made to the Upper Tribunal, which decided that the FTT鈥檚 decision to impose cost condition was 鈥渨rong in law鈥� 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.

鈥淲hilst 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,鈥� she said. 

鈥淚n many cases, the current landlord is not the developer, and is as 鈥榠nnocent鈥� of wrongdoing as the leaseholders. Balancing these competing interests is difficult, which is why the Court did not reach a unanimous decision.鈥�

星空传媒 has approached Triathlon for comment. Adriatic could not be reached for comment.