Buildings Safety Act 2022: Different statutory regimes do not operate in isolation

A group of 59 leaseholders recently successfully appealed against improvement notices served by Central Bedfordshire Council, with the relevant notices quashed. Robert Bowker and Claire Lyon, who represented the leaseholders, look at the lessons to be learnt.

Background

In Various Leaseholders of Priory Heights v Central Bedfordshire Council (CAM/00KC/HIN/2022/0006), Priory Heights, Church Street, Dunstable, Beds LU5 4RQ, a former tax office, is over 29 metres high, was converted from commercial to residential use between 2003 and 2008, and contains 64 flats. It contains two staircases one of which is external and covered in combustible HPL cladding. It is indisputable that the cladding must be removed and replaced. The necessary remediation measures also include compartmentation and fire stopping work in the building’s common parts.

The Council sought to compel the leaseholders to carry out fire safety works by serving on each of them an improvement notice under the Housing Act 2004 in April and May 2022. The leaseholders joined forces and appealed. The Tribunal issued directions leading through to a final hearing which was heard on 7 and 8 June 2023. The leaseholders called its property manager and lead leaseholder as witnesses of fact, and a fire safety expert.

The Tribunal’s decision is significant because it dealt with not only the circumstances in which an improvement notice requiring fire safety remediation work will be quashed but additionally the interaction between competing regimes under the Housing Act 2004 and the Building Safety Act 2002. It is clear from the decision that the different regimes will not operate in isolation.

Hastings v Braemer

In serving the improvement notices on the leaseholders rather than, for example, the freeholder or the RTMC, the Council justified its decision on a decision of the Upper Tribunal, Hastings Borough Council v Braemer Developments Limited [2015] UKUT 0145 (LC). The leaseholders sought to distinguish the decision on various grounds. The Tribunal agreed.

The Tribunal’s decision

In terms of wider considerations, the Tribunal made the following comments about leaseholder protections and remedies under the Building Safety Act 2022, and the Building Safety Fund.

1. Building Safety Act 2022 – leaseholder protections

In respect of the leaseholder protections in Part 5 and Schedule 8 of the Building Safety Act 2022, the Tribunal observed (at paragraph 50):

“while we make no specific findings about this…the effect of Part 5 of and Schedule 8 to the 2022 Act may well be that the cost of these works would not be recoverable from most, or at least some, of the leaseholders under their leases…[As to] the remediation and leaseholder protection provisions in Part 5 and Schedule 8…this is a relevant building and the conversion works were carried out within the relevant 30-year period. It is difficult to see why the remedial works would not be service charges in respect of a relevant measure relating to a relevant defect. It appears at least some of the leases will be qualifying leases; some leaseholders live in their flats and it is unlikely that all the other leaseholders will own more than two other dwellings. As matters stand, all of them may be treated as qualifying leases, since there is no indication the Landlord has sought the requisite qualifying lease certificates from them (paragraph 13 of Schedule 8).”

2. Building Safety Act 2022 – remedies

And in respect of remedies under the Building Safety Act 2002, the Tribunal said this (at paragraph 57):

“If an improvement notice became appropriate for the relevant work, it is not clear why it could not be served on the Landlord alone if, for example, the Company agreed a workable scheme for the Landlord to procure the work. Further, following the creation in the 2022 Act of mechanisms designed to deal with precisely this type of building, it is not clear why an application against the Landlord for a remediation order and/or the Landlord and/or others for a remediation contribution order could not be an appropriate course of action, if enforcement action is needed.”

3. Building Safety Fund

Furthermore, in respect of the Building Safety Fund, the Tribunal said this (at paragraph 57):

“Ultimately, even if it could be appropriate to serve improvement notices on the leaseholders (personally, or to seek to procure the works by the Company, alone or at the same time as the Landlord), we consider that it would not be appropriate to do so in relation to the external staircase without allowing them more time to pursue their application to the BSF and take any other appropriate steps to seek to secure any other funding.”

Conclusions

Local authorities are an interested person within the meaning of section 123 and 124 of the Building Safety Act 2002 and, consequently, have standing to apply for a remediation order or remediation contribution order.

In view of those remedies, let alone the obvious impediments to compelling individual leaseholders, many of who have limited means, to carry out substantial remediation work at huge expense, the Council’s decision to serve improvement notices in this case seems extraordinary.

It remains to be seen whether local authorities, along with fire and rescue authorities, will start to take an interest in being an “interested person” under sections 123(5) and 124(5) of the Building Safety Act 2022 or whether the cost of those remedies will continue to be shouldered by leaseholders. As the Tribunal commented in this case (paragraph 85):

“…all the Applicants will have incurred far more on legal fees preparing for and attending the hearing, which would have been better spent on further remedial works…”.

Robert Bowker is a barrister at Tanfield Chambers and Claire Lyon is a Senior Consultant – Real Estate Dispute Resolution at Setfords (LinkedIn). Together they represented the successful leaseholders.

Further information about the BSA 2022 is available on the Tanfield BSA Hub.