Remediation orders – landlords beware

Spur House is the latest FTT decision on remediation orders. It adds to the tally a fifth case (after the Leigham Court Road, Orchard House, Centrillion Point and Space Apartments). Robert Bowker focuses on just three key features of the case followed by three take-away points.

The case concerned insulation and timber balconies. The building was converted offices, mixed-use, comprising 39 flats and over 18 metres. The applicants were six long-lessees. The respondent was the developer and landlord. The tribunal was Mrs Helen Bowers MRICS, Mr Andrew Thomas MRICS MIFireE and Mr Stephen Mason FRICS.

The first key feature is that this was a remediation order made by consent. The FTT explained the position in §25 of the decision: “Although the parties presented the Tribunal with the terms of an agreed Remediation Order, they both requested that these reasons set out the background to the case”. The remediation order attached to the decision included the recital “AND UPON [the parties agreeing the terms of this Remediation Order]”. Notwithstanding the parenthesis, it seems clear that this was a consent order. The order followed the type of order made by the FTT in the Leigham Court Road case but added a commencement date and a notification of compliance provision (the Regulator, the GLA and the LFB). It also provided by agreement for the work to be approved and supervised by Harris Associates.

That introduces the case’s second key feature – the appointment of a single joint expert. Mr Shaun Harris (of Harris Associates) was appointed SJE by agreement (see §§41 and 42 of the decision). Although Mr Harris’s appointment as SJE and Harris Associates’ appointment to its supervising and approving role were each made by consent, as far as the landlord was concerned things do not appear to have gone smoothly. As the FTT explained  in §43: “It is submitted [presumably by the applicants] that despite the agreement in respect of the SJE, the Respondent refused to accept the findings and opinions of Mr Harris. In a letter to Mr Harris dated 8 February 2024, the Respondent indicated that it had instructed Mr Jack Bruton of Bruton Safety Solutions Limited to prepare a report and the report was sent to Mr Harris. The letter asked Mr Harris to confirm whether he agrees to the proposals set out in Mr Bruton’s report. There was no application for permission for the Respondent to file the Bruton report,  nor had the Respondent indicated that there was a manifest error in Mr Harris’s report.” The reference to a manifest error related to the landlord’s earlier position when Mr Harris was appointed that it would not file its own expert report unless Mr Harris made a manifest error.

The third feature is the terms of Schedule 2 to the order in which the parties agreed and the FTT recorded a “Schedule of Specified Relevant Defects and Works Required to Remedy Them”. The schedule comprised two items, each expressed in a single sentence. In each sentence, the emphasis is clearly on the work itself: “1. Install new external wall system to Spur House to be compliant with Building Regulations in force at the time of installation.”; and “2. Removal and replacement of combustible elements of the balconies at Spur House (including but not limited to the horizontal decking surface and vertical cheeks/walls where present.” The FTT was, therefore, willing to approve a schedule to a consent order in which the requirement in s.123(2) for ‘an order…to remedy specified relevant defects’ was expressed in terms that, arguably, did not state explicitly the relevant defects, or rather identified them by inference. In the first item in Schedule 2 the relevant defect is no more than the ‘external wall system’ and in the second the ‘combustible element of the balconies’. In the recital to the main order, the FTT recited that Harris Associates had produced a report which identifies relevant defects, but in Schedule 2 to the order the FTT was content to approve just the single sentences in items 1 and 2.

Take-away points? These principally concern respondent landlords.

• Beware remediation orders made by consent. Although the main order included the now familiar provision giving permission to apply, specifically in relation to the scope of the works, the start date and the end date, will a landlord who consented to the terms of an order face greater difficulty subsequently persuading the FTT to vary its terms than a landlord who maintained its objections throughout? Consider a landlord who applies to defer the dates for starting or finishing the work. Will that landlord be met by an argument along the lines that delay was foreseeable and the dates it agreed should have included reasonable provision for delay including sufficient float within the construction programme. And why agree to a start date at all given that this is not required by s.123(2)?
• Beware single joint experts. Balancing the obvious advantage of saving expense with the benefit of being able to give instructions and take advice under the protection of legal privilege (subject, of course, to rule 19), the latter course is likely to be far more attractive in most cases involving serious defects and costly works.
• Beware remediation orders that do not identify the relevant defects with reasonable precision. Although simplicity has its clear benefits, there is a risk that by failing to pinpoint accurately the relevant defects within the order itself, rather than by a general reference to defects described in reports, the question of whether the requisite work has been completed in full might come back to haunt the landlord. Although the point cuts both ways, it will be landlord making an application in the FTT to vary terms or defending in the county court enforcement of the order. If there is further litigation, a landlord might regret not having pressed for an order that identified the relevant defects in very specific terms.

 

You can find a copy of the decision here.