A2Dominion South Limited v BDW Trading Limited - Pieris House – First-tier Tribunal decision

Summary of case 

The First-tier Tribunal (Property Chamber) (FTT) decision in A2Dominion South Limited (A2Dominion) v BDW Trading Limited (BDW), considered the meaning of a “relevant building” for the purposes of s117 of the Building Safety Act 2022 (BSA). This case will be of interest to developers, past and present building owners, and interested parties in the context of potential claims for Remediation Contribution Orders (RCO) under s124 of the BSA, remediation orders (RO) under section 123 of the BSA and the application of the leaseholder protections in Schedule 8 of the BSA.

The FTT found that a 4-storey building (the Lower Parts), which, on the face of it, would not appear to be a relevant building as defined under the BSA, was in fact part of a relevant building due to it being structurally attached to (or not structurally detached from), and not capable of vertical division from, a building that was itself a relevant building (the Higher Parts). The two parts shared services to such an extent that it was not possible to separate them without significant interruption. One of the requirements for a relevant building is that it is a self- contained building or self-contained part of a building. Together the Lower Parts and the Higher Parts are known as “Pieris House”.

The Lower Parts were subject to relevant defects as defined under the BSA and, as they were held to form part of a relevant building, they could be the subject of an RCO brought by A2Dominion against BDW. The FTT followed established case law under the right to manage and leasehold enfranchisement regimes (the Commonhold and Leasehold Reform Act 2002 (2002 Act) and, primarily, the Leasehold Reform Housing and Urban Development Act 1993 (1993 Act) to determine what is a relevant building.

The decision highlights the significance of a development’s physical configuration, especially the level of structural connectivity and shared services between buildings, in shaping liability for remediation costs under the BSA.

Background 

Pieris House is a mixed-use development in the London Borough of Feltham. The Higher Parts comprise Flats 1-28 and the Lower Parts comprise Flats 29-40.

The Higher Parts measure approximately 21 metres and 7 storeys (and so meet the height and user criteria for a relevant building), whereas the Lower Parts consist of 4 storeys (a commercial unit on the ground floor and 3 storeys of flats above). For a building to be a relevant building it must be in England, be at least 5 storeys or 11m high with two or more dwellings and be a self-contained building or self-contained part of a building. 

The Lower Parts of Pieris House are physically connected to the Higher Parts via an enclosed steel framed stair core (Stair Core), which serves as a fire escape for both parts. The Stair Core is attached to the reinforced concrete structure frame of the Higher Parts, and, in addition, there are horizontal transfer support beams which give structural support to each part.

The majority of the building’s services are housed within the Higher Parts but are shared across both parts. It was accepted that the Higher Parts were a relevant building.

However, the question for the FTT to answer was whether all Pieris House (i.e. the Higher Parts and the Lower Parts) was a single relevant building.

FTT decision 

A2Dominion, as the applicant, sought an RCO pursuant to s124 of the BSA in respect of alleged relevant defects affecting the Lower Parts.  An RCO is an order requiring a specified body corporate or partnership (here, BDW) to make payments to a specified person (here, A2Dominion) for the purpose of meeting costs incurred, or to be incurred, in remedying or otherwise addressing relevant defects (or specified relevant defects) in a relevant building.

A2Dominion contended that the Lower Parts form part of the whole of Pieris House and therefore it is a relevant building. BDW, by contrast, argued that the Lower Parts did not qualify as a “relevant building”, on the basis that they were situated within a structurally detached building or, alternatively, constituted a separate part of the wider building. The definition of “relevant building” under s117 of the BSA is fundamentally based on s72 of the 2002 Act and s3 of the 1993 Act.

The FTT therefore relied on established case law under those Acts to determine if Pieris House (ie, the Higher Parts and the Lower Parts) was a single relevant building.

The FTT considered each limb of s117 of the BSA and accepted A2Dominion’s submissions to conclude that the Lower Parts formed part of the wider building because:

1. The Lower Parts were not structurally detached by virtue of there being structural interdependence and therefore structural attachment between the Higher and Lower Parts.
2. There was no vertical division between the Lower and Higher Parts due to the Stair Core.
3. The Lower Parts could not be redeveloped without also redeveloping the Higher Parts, and any such redevelopment could result in building safety issues arising; and 
4. Key services, in particular heating and hot water, were not provided independently to the Lower Parts and could not be provided independently without causing significant disruption to the services enjoyed by occupiers of the Higher Parts.

The FTT was asked to consider whether the definition of “higher risk building” in Part 4 of the BSA, as expanded by the Higher-Risk Buildings (Descriptions and Supplementary Provisions) Regulations 2023, could assist in interpreting the definition of “relevant building” in Part 5 of the BSA.

The FTT held that Parts 4 and 5 of the BSA contain their own distinct definitional regime reflecting different statutory aims:

1. Part 4 - focuses on the regulatory oversight of higher risk buildings. 
2. Part 5 - addresses the remediation of building safety defects.

While it recognised the potential anomaly that the same building could fall into different risk categories depending on the Part engaged (and presumably therefore be subject to different obligations), the FTT considered this outcome to be mandated by the plain wording of the legislation.

Conclusion

This is an important decision in the treatment of a building for the purposes of a RCO, a RO and the leaseholder protections under the BSA. Developers, past and present building owners, and interested parties should take note where their building is interconnected to a relevant building.

In addition, there is clear interplay between the BSA, the 2002 Act and the 1993 Act. The tests applied by the FTT in this case to determine whether Pieris House constitutes a “relevant building” mirrored the tests under the right to manage and enfranchisement regimes for establishing entitlement to the exercise of the rights under those regimes. This is to be expected given the similarities of the legislation. Whilst existing case law is a useful guide to the scope of a relevant building, it is not necessarily conclusive.

The FTT stressed that interpretation of the term must be grounded in the context of the legislation in question. The overriding context of the BSA is building safety, with the context of the right to manage and enfranchisement regimes being management and freehold acquisition respectively.

The FTT has indicated that the same building could be treated differently by virtue of the different purposes of Parts 4 and 5 of the BSA. Whilst for now existing case law and legislative interpretation of the BSA, right to manage and enfranchisement regimes are aligned, could there be a time when, in the interests of building safety, the FTT determines that a building (or part of a building) is a “relevant building” for BSA purposes, but that same building (or part of a building) does not qualify for the right to manage or enfranchisement regimes? 

Should you require advice on any of the matters raised in this article, please do not hesitate to contact us.

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