A recent Court of Appeal ruling has established a significant precedent by determining that building owners and developers are prohibited from passing on fire safety remediation costs to leaseholders. This decision follows two separate cases and is expected to have substantial implications on the financial responsibilities surrounding building safety compliance.
The ruling emerges amidst heightened scrutiny of building safety standards after the Grenfell Tower fire, which revealed serious safety defects in numerous properties. It confirms that owners cannot impose charges for pre-2022 discovered fire safety defects, thus protecting leaseholders from unexpected financial burdens.
Central to the court's opinion was the retrospective application of parts of the Building Safety Act (BSA) of 2022, which was enacted as a direct response to the failures that led to the Grenfell disaster. The BSA, as noted by Secretary of State Angela Rayner in her submissions, is designed to provide necessary redress and accountability for historical safety issues that have recently come to light.
The cases in question involved Hippersley Point in Abbey Wood and multiple residential blocks in the East Village Estate at Stratford, London. In the Hippersley situation, Adriatic, the owner, sought to recover tribunal costs incurred while attempting to bypass certain regulations, charging leaseholders over £250 each for remedial fire safety work. Conversely, in the East Village case, a request was made to compel developers to cover the costs of fixing established fire safety flaws.
Legal experts noted the unusual nature of the law's retrospective application, emphasizing the necessity of such provisions to hold developers accountable for historical negligence in building safety. Nitej Davda from Cripps highlighted that the intent of the BSA is to ensure leaseholder protection while simultaneously passing the responsibility for safety defect rectification onto developers.
As this ruling takes effect, leaseholders are currently shielded from bearing the financial responsibility for the fire safety repairs, representing a pivotal victory in the ongoing battle for tenant rights and building safety reform.
