Construct.law - Winter 2025
Two Court of Appeal judgments offer clarity on the Building Safety Act
By Richard Flenley and Michael O'Connor
LODGE: A Living Sector Update Winter 2025
Court Of Appeal Backs FTT on Fire-Safety Defects Remediation
By Michael O'Connor and Mark Barley
- Two recent rulings from the Court of Appeal have marked a turning point in the legal interpretation of the Building Safety Act 2022 (BSA).
- Hippersley judgment concludes that landlords cannot pass defect-related costs to qualifying leaseholders irrespective of whether those costs were incurred before or after Schedule 8 to the BSA came into force but that leaseholders cannot reclaim service charges in respect of such costs that were paid before 28 June 2022.
- Triathlon case concludes that RCOs can cover pre-BSA remediation costs.
- Both judgments pave the way for developers and associates facing extended liability.
- With permission to appeal applications to the Supreme Court being lodged for each case, further appeals may reshape the law in the short and longer term.
In Triathlon Homes LLP v Stratford Village Development Partnership & Get Living Plc and Adriatic Land 5 Ltd v Leaseholders at Hippersley Point, the Court confronted two of the most pressing questions facing the property sector today: how far back the BSA can reach, and who must ultimately bear the costs of remediating unsafe buildings. Handed down on the same day in July 2025, these judgments offer clarity in a fast-moving legal landscape. They show that the courts are willing to apply the BSA robustly in line with the government’s policy objectives but are also careful not to allow a completely retrospective rewriting of obligations. For landlords, developers, and leaseholders, the message is clear: the courts are prepared to enforce the principle that developers, landlords and their associates will bear the brunt of putting right building safety risks in residential and certain mixed-use buildings.
The Background
When the BSA was introduced in the wake of the Grenfell Tower fire in June 2017, the government pledged to ensure that leaseholders would be protected from the costs of remediating unsafe cladding and certain other historic defects. At the heart of the BSA are two mechanisms now under close judicial scrutiny:
- Leaseholder protections (Schedule 8): These provisions prevent certain costs of remediation from being passed to “qualifying tenants.
- Remediation Contribution Orders (RCOs) (Section124): These allow the First-tier Tribunal (FTT) to require developers, current landlords or a landlord as at 14 February 2022, and their associated companies and partnerships to contribute to remediation costs for work to a the building of at least 11 metres or having at least five storeys, with at least two dwellings completed in the period of 30 years prior to 28 June 2022.
Until now, the scope of these powers - and especially whether they could apply to costs incurred before the BSA came into force in June 2022 - has been unclear.
Hippersley: Can Leaseholders reclaim past costs?
This case concerned a residential block with serious fire safety issues. Adriatic, the ground rent investor, sought dispensation from the statutory consultation requirements under Section 20 of the Landlord and Tenant Act 1985. The FTT granted dispensation but barred Adriatic from recovering its costs from leaseholders. On review, it effectivey reached the same decision. Adriatic appealed, arguing that this unfairly left it out of pocket. By the time the case reached the Upper Tribunal, the BSA had come into force. The Upper Tribunal noted that Schedule 8 now restricted landlords from recovering certain professional (and other) costs from “qualifying tenants” where they arose from relevant building safety defects. Although criticising certain parts of the FTT’s decision, the position remained that Adriatic was unable recover the sums it sought. The matter proceeded to the Court of Appeal, which considered three issues:
- Did Schedule 8 apply to the costs of the dispensation application?
- Could it cover costs incurred before 28 June 2022?
- Would applying them retrospectively infringe landlords’ rights under human rights law (A1P1 of the European Convention)?
By a 2–1 majority, the Court of Appeal ruled that Adriatic could not pass on costs, even those incurred before the BSA’s commencement date. The majority stressed Parliament’s intention to shield leaseholders which justified limiting recovery. However, the Court of Appeal drew an important line. Unpaid costs demanded before June 2022 were no longer due, but costs already paid by leaseholders had to be repaid. Otherwise, the court said, accounts would be reopened, creating uncertainty. This gave landlords certainty and avoided costly litigation. That said, leaseholders who had already paid could still seek relief via an RCO if just and equitable. The dissenting judge argued the protections should only apply to liabilities incurred after June 2022. An application for permission to appeal to the Supreme Court has now been lodged.
Triathlon: Holding Developers and Associates to Account
This second case dealt with an even more consequential question: whether RCOs can cover costs incurred before Section 124 of the BSA came into force. Triathlon, a leaseholder in the former Olympic Village development, sought RCOs against the original developer (SVDP) and Get Living, its associated company. The FTT had agreed, ordering both to contribute not only to future costs but also to costs Triathlon had already incurred. On appeal, SVDP and Get Living argued two points:
- That it was not “just and equitable” to make RCOs against them, particularly as public funding was available for the works.
- That the FTT had erred in allowing RCOs to cover costs incurred before Section 124 came into force.
The Court of Appeal dismissed the first ground, confirming that the circumstances when it would be “just and equitable” to make an RCO are broad. It did not, however, take as strict a stance as the FTT had taken on whether the target of an RCO who is well able to fund the relevant remediation works should always be preferred instead of the public purse. Instead, it acknowledged that there may be circumstances where an associated company can resist an order – for example, where its connection to the landlord was tenuous. On the second ground, the court was unequivocal: RCOs can apply to remediation costs incurred before Section 124 came into force. To hold otherwise would frustrate the BSA’s purpose of ensuring that risks from historical defects are remedied without leaseholders bearing very large costs. Pending an appeal, the judgment cements the principle that developers and associates remain liable for historic costs, even if they have since exited the project or reorganised their corporate structures.
Comparing the two Judgments
Hippersley makes clear that while leaseholders are protected from paying professional costs connected with defects, it they meet the qualifying criteria in Schedule 8, the BSA does not allow them to recover service charges already paid before June 2022. This balances leaseholder protection with legal certainty (albeit that there might still be liability under an RCO). Triathlon confirms that RCOs can bite on pre-BSA costs, reinforcing the Government’s central policy objective under the BSA: that developers, landlords and their associates should foot the bill for unsafe buildings, not leaseholders or the taxpayer (subject only to the application of the just and equitable test).
Wider implications for the sector
For developers and their associates, the Triathlon judgment makes clear that liability can extend decades into the past and that courts are willing to apply it as a non-fault based remedy. Corporate structures, joint ventures, and associated entities can all come under scrutiny. Even developers and former landlords who sold their interest or restructured may remain exposed. For some, this could mean substantial contingent liabilities re-emerging on balance sheets. For landlords, Hippersley clarifies that landlords cannot pass certain professional costs to leaseholders. For leaseholders, the judgments confirm the core protection Parliament intended: leaseholders should not be liable for the costs of remediating unsafe cladding and certain other historic building safety defects. However, expectations of refunds for charges already paid may be disappointed, as the court has drawn a line to prevent automatic retrospective upheaval. For insurers and funders, both cases highlight the potential for long-tail liability. Insurers will need to consider whether existing policies respond to RCOs, while funders will have to assess the creditworthiness of developers and landlords facing historic claims. For wider policy, the rulings align with the government’s policy aim of shifting costs away from leaseholders and the taxpayer. However, they also raise questions about whether public funding schemes will be fully recoverable if courts continue to take a broad view of RCOs.
Key takeaways
Although the two rulings address different provisions of the BSA, they together underscore key principles in how the courts are interpreting the legislation. Here are several key takeaways from the decisions: Underlining the position of Associates under the BSA: The Triathlon ruling reinforces the broad net cast by Section 124, which allows RCOs to be made not only against developers and landlords, but also associated entities, regardless of their direct involvement in the development. While the “just and equitable” test provides a safety valve, the presumption now leans heavily in favour of remediation responsibility falling on those linked to the original development. Policy is driving judicial interpretation: The judiciary is reading the BSA through the lens of its overarching purpose: to move the financial burden of building safety to those perceived to be better placed to bear it. This principle guided both the validation of RCOs in Triathlon and the restrictions on enforceable service charges in Hippersley. Further scrutiny for developers: These decisions underline the long-tail liability risk attached to past developments. Even if a developer or former landlord has exited a project or passed ownership, they may still be liable for remediation costs, and so might their group companies. Corporate structuring and historic relationships will continue to be closely scrutinised.
Looking ahead
The Court of Appeal’s rulings represent a significant step in clarifying how the BSA works in practice. But they are unlikely to be the last word, with applications for permission to appeal to the Supreme Court being lodged in each case and more cases already making their way through the Tribunals. The courts are committed to enforcing the principle that developers, landlords and their associates will bear the costs of making Britain’s high rise housing stock safe. For developers and landlords, that means heightened risk and greater scrutiny of past projects. As they navigate this new territory, landlords and developers are advised to seek professional advice on their rights and liabilities. For leaseholders, it means application of the protections built into the BSA. What is certain is that debate and legislative interpretation of the BSA is far from over, the judgments in Triathlon and Hippersley provide much-needed guidance, but they also set the stage for the next phase of litigation, and for the continued reshaping of the relationship between landlords, developers and leaseholders in light of the BSA.
This article was first published in Construction Law publication on 1 October 2025.