Breaking Property News – 20/02/24
Daily bite-sized proptech and property news in partnership with Proptech-X.
Since Grenfell, remediation liability has come sharply into focus – so who ends up paying the bill and why?
Across the UK, numerous property assets require remedial measures to make them safe and compliant, the big kicker is who is liable for the often huge cost of this work? And just as with Grenfell where who was to blame was opaque, the new legislation to settle the matter will require a number of cases to pinpoint the same.
Tim Seal, Head of Construction at Ridgemont, a boutique law firm specialising in Real Estate and Construction guides us through the legal maze.
‘Recently the First-Tier Tribunal (Property Chamber) (FTT) handed down judgment in the case of Triathlon v SVDP & GLP & EVML. In doing so it awarded remediation contribution orders (RCOs) under S.124 Building Safety Act 2022 (BSA), that Triathlon sought against SVDP and GLP. The Judgment is lengthy and looks in detail at parts of the BSA, which is an Act that the FTT openly admits, is not always easy to follow.
This case concerns five- residential blocks in East London, developed by SVDP as athletes accommodation for the London 2012 Olympic Games, and since redeveloped into a residential estate of new homes called “East Village”. GLP owns SVDP although it didn’t at the time the development was undertaken. EVML repairs and maintains the structure and common parts of East Village and is owned jointly by GLP and Triathlon. Triathlon was established to provide affordable housing at East Village and owns all of that stock there.
Post the 2017 Grenfell Tower fire, combustible material was found in the exterior cladding at East Village. Remedial works began in 2023 and should finish in 2025. They are being funded by grants to EVML from the Building Safety Fund. The total cost of the works is due to exceed £24.5 million. Under the RCOs,SVDP & GLP have been ordered to make payment to Triathlon and EVML of £17M+, to cover most of the remedial costs past and future.
The introduction of the BSA in 2022 caused a problem for the parties. Until then the cost of remediation would likely be met through service charges payable by Triathlon (and another party), but the BSA prohibited reliance on service charges for this purpose and exposed SVDP and GLP to the risk of RCOs.
The question ofwhether it is just and equitable for the FTT to make the RCOs(which is the test stated in S.124 BSA), is the primary issue in the judgment. However, section 124 gives no guidance on how the FTT is to decide whether it is “just and equitable” in any particular case to make an order. Beyond stating the obvious, that the power is discretionary and should therefore be exercised having regard to the purpose of the 2022 Act and all relevant factors, it is not possible to identify a particular approach which should be taken… (paragraph 237 Judgement). This is therefore where the significance of this case lies, but as always the findings are specific to the facts and hence their applicability to later disputes is not clear.
Moreover, bear in mind paragraph 49 of the Judgment. When dealing with the fact that this case was wrongly started in the Upper Tribunal and then transferred down to the FTT, the Judgment states:…..it is regrettable that this matter cannot proceed to a determination in the Upper Tribunal which would be binding on tribunals at FTT level and (with permission) could be the subject of an appeal to the Court of Appeal.’
Flex workspace provider Runway East expands into Birmingham
PRESS RELEASE February 2024 Birmingham Runway East (RWE), the culture-led flexible workplace operator, signs circa 20,000sq.ft. of new workspace at Arca, Birmingham, in a 20-year joint venture with Oval Real Estate. A landmark deal for the company, with a trio of successes; their tenth site, in their tenth year and their first in the Midlands.
The distinctive building, formerly a shopping centre, will be reinvented as home to a community of over 400 members startups and scaleups – equidistance between Birmingham Snow Hill and New Street. Located in Birmingham’s core CBD, the office has been refurbished to a Grade A standard.
It will be home to a community of 400 members from startups and SMEs, with customisable office spaces for teams of 4 – 100 people, a large roof terrace with views over the city, thousands of square feet of breakout space and 15+ meeting rooms and phone booths on site.
“We’ve been waiting to move into Birmingham, and now we are here!” shares Natasha Guerra, CEO of Runway East, (Pic above) “The Big City Plan is changing the face of the city, with Birmingham playing a pivotal role in the green revolution. Runway East started out as a tech collective, and so we’re so excited to be entering a city with such a thriving tech community. It’s full circle for us as this year marks 10 years of bringing what we call team bliss to startups, scale-ups and SMEs so that they can concentrate on what’s most important in their day-to-day.”
In 2023, central Birmingham’s office market enjoyed its best year since 2019 according to figures published by the Birmingham Office Market Forum. The site is expected to be opening in Summer 2024, with prices starting from £360+VAT. Runway East is a B-Corp certified flexible workspace provider, which has been operational since 2014. Led by Natasha Guerra, it has now grown to 10 spaces, across London, Birmingham, Brighton and Bristol. Businesses using their space include Deliveroo, Matches Fashion, and Grind, among other household names.
Andrew Stanton Executive Editor – moving property and proptech forward. PropTech-X
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