Five companies linked to Manchester property developer Urban Splash have been ordered to repay a combined £46.5m that was used to fund post-Grenfell fire safety works at seven high-rise blocks. The decision was published by a tribunal on Thursday (November 5).
The case concerns works at Burton Place in Castlefield; the Chips Building in New Islington; Moho Building on Ellesmere Street; The Box Works on Worsley Street; and the Three Towers on Dalton Street.
Tribunal Finds Fire Safety Defects
The Secretary of State for Housing, Communities and Local Government took the matter to court earlier this year, with tribunal proceedings starting in April. The tribunal found all of the buildings had 'defects relating to fire-safety' which needed fixing.
A total of £60m was spent on the safety works, of which £51m was funded through the government's Building Safety Fund. The tribunal looked at the 'central question' of whether remediation costs funded by the taxpayer should continue to be borne by the taxpayer, or whether liability should be transferred to the developer and associated entities.
Government Argument
Kerry Bretherton KC, representing the government, said on the opening day of the tribunal in April: "We are here because the taxpayer has had to pay some £50m to remediate these buildings. There is a responsibility to reclaim public monies that have had to be paid out only because Urban Splash did not do the right thing."
For Urban Splash, Nicholas Dennys KC responded: "We categorically did not fail to do the right thing, we did what we could, when we could."
Companies Named in Judgement
The companies named in the judgement are Urban Splash Limited; Urban Splash Developments Limited; Urban Splash Group Holdings Limited; Urban Splash Work Limited; and Stubbs Mill LLP. The judgement reads: "Most of that amount is payable to the Secretary of State in respect of remediation expenditure funded through the BSF [Building Safety Fund]."
The high-rise buildings part of the case were developed by Urban Splash Limited between 2000 and 2008.
Reactions to the Decision
Angela Rayner, Secretary of State, said: "I welcome this important decision, which is clear that those responsible for unsafe buildings need to pay their fair share to fix them. We will continue in our efforts to recover taxpayer funds spent on remediation and our work to make people's homes safe."
Responding to the tribunal's decision, an Urban Splash spokesperson said: "While we are reviewing it and taking legal advice our focus is finding a constructive way forward with government while continuing to deliver much-needed homes and regeneration across the country. Making buildings safe and protecting residents and leaseholders is of fundamental importance to Urban Splash. We have remained closely engaged throughout the remediation process, and we are pleased that the Tribunal recognised the 'useful and responsible assistance' Urban Splash provided with the post-Grenfell investigations into these buildings. We are, however, disappointed by the decision to include a number of entities which played no part in the original development of these seven buildings."
Martin McKeague, real estate litigation partner at Walker Morris which acted for the government in the proceedings, said: "This outcome is an important step in the government's efforts to recover public money spent on building safety remediation. This £46.5m decision demonstrates that responsibility for remediation can extend beyond the original developer to the wider enterprise, where it is just and equitable to do so."
The Ministry of Housing, Communities and Local Government was approached for comment.
