Building Liability Orders – the net widens

The first reported decision on BLOs appeared in 2025. In the last two months alone, two further significant decisions have underlined just how powerful – and far-reaching – these orders are.

Crest Nicholson v Ardmore was the first fully contested BLO decision. Mulalley v Sto was the first reported case in which a BLO was made against an overseas parent. Taken together, these decisions make it clear that corporate structuring is unlikely to shield historical building safety liabilities. BLOs can extend to parent, sister and associated companies, including overseas parents, where it is just and equitable to do so.

What is a Building Liability Order?

BLOs are a statutory mechanism under section 130 of the Building Safety Act 2022 (BSA), allowing the court to extend liability for building safety failures beyond the contracting entity to its associated companies. The relevant liability has to relate to liabilities arising under section 1 of the Defective Premises Act 1972, or as a result of a “building safety risk” which is a risk to the safety of people in or about a building arising from the spread of fire or structural failure. They are made by the court provided it is “just and equitable” to do so.

In Crest Nicholson v Ardmore, the court confirmed that it may grant:

• Anticipatory BLOs – imposed before final judgment, so that if the original project entity is found liable, associated companies will also be liable;
• “Adjudication” BLOs – enabling an adjudication award to be enforced against associated companies; and
• Partial BLOs – extending liability for only part of a claim where appropriate.

In Mulalley v Sto, the court demonstrated how BLOs can operate alongside section 149 BSA extending liability from a UK subsidiary to its overseas parent. Section 149 provides a new retrospective legal remedy against construction product manufacturers and suppliers for liability for past defaults relating to cladding products where those products are inherently defective or misrepresented.

Crest Nicholson & others v Ardmore Construction Limited (in administration) and others [2026] EWHC 789 (TCC)

The case concerned the Admiralty Quarter development in Portsmouth, completed by Ardmore Construction between 2007 and 2009 under a JCT design and build contract. Post-Grenfell investigations identified alleged fire safety defects.

An adjudicator awarded the developer, Crest Nicholson, approximately £14.9 million for Ardmore Construction’s breach of its contractual obligations and duties under section 1 of the Defective Premises Act 1972. Ardmore Construction entered administration the day before the decision.

Crest Nicolson then went on to seek relief in the form of BLOs, and successfully secured:

• An anticipatory BLO, making any future liability of Ardmore Construction under the Defective Premises Act or arising from a building safety risk the joint and several liability of its associated companies; and
• An adjudication BLO, making the associated companies jointly and severally liable for the monies awarded in the adjudication, effectively extending the £14.9 million adjudication award across the Ardmore group.

In effect Crest Nicholson secured group liability for a £14.9 million award, despite the contractor entity, Ardmore Construction, being in administration. Arguments that a BLO would not be “just and equitable” were rejected.

As a direct consequence, the wider Ardmore group – including multiple trading entities – entered administration, with the loss of several hundred jobs. The group cited the “profound impact” of the BLO decision on its financial position and ability to trade given the impact on client confidence across the group. The case is a stark illustration of how historic building safety liabilities can crystallise rapidly into group-level exposure making continued trading challenging.

Mulalley & Co Ltd v Sto Ltd & Sto SE & Co. KGaA [2026] EWHC 1552 (TCC)

This decision is one of the first contribution claims under the BSA to reach judgment and shows how BLOs can extend liability to overseas parents and cladding product suppliers.

Mulalley was engaged in 2006 to refurbish a residential tower in Chelmsford, including installing an external wall system. Defects later emerged. In 2022, Mulalley settled with the building owner and undertook remediation works.

Mulalley then pursued recovery from:

• Sto Ltd (UK) – under section 149 BSA for defective cladding products; and
• Sto Germany (parent) – via a BLO, after Sto Ltd entered administration in 2025.

Sto Germany did not participate in the proceedings so the case was not fully defended. Default judgment was entered on liability, leaving quantum to be assessed.

Mr Justice Pepperall found that the “principal cause” of the losses was the supply of an “inherently defective product”. Sto Ltd was held responsible for 87.5% of the remediation costs (£1.77 million), and a BLO was made against the German parent for that amount.

This is the first time that a building liability order has been made by default judgment and in respect of suppliers of cladding products. The decision highlights the significant exposure facing cladding product suppliers – and their parent companies, including overseas groups with UK subsidiaries – where products are implicated in building safety defects.

Why these decisions matter

Expect more “Ardmore” scenarios

The Ardmore decision is unlikely to be a one-off. Building safety risk is an enforceable and potentially group-wide issue. Developers and building owners can tactically combine adjudication with BLOs to reach well-resourced group companies particularly where the original project entity is insolvent or under-capitalised.

Building safety risk is an enforceable and potentially group‑wide issue.

These adjudication awards can therefore quickly become a large, enforceable group liability via a BLO which can crystallise at short notice – potentially years before a final trial. This means that the timing and scale of risk have altered for group boards and insurers alike.

Corporate diligence

These decisions emphasise the need for robust intra-group diligence. Liability can attach across the group irrespective of formal corporate structuring. Historic projects and legacy risks require renewed scrutiny.

Financial reporting

Companies will need to reassess how they identify, quantify and disclose potential building safety liabilities. If adjudication can trigger immediate group exposure, auditors may require provisions or disclosures at group level earlier than previously anticipated.

“Just and equitable” – a high bar to resist

The courts are taking a purposive approach, aligned with the BSA’s objective of ensuring those responsible for historical building safety defects bear the cost of remediation. While the “just and equitable” test is broad, the direction of travel suggests that will be difficult (though not impossible) to resist a BLO on just and equitable grounds. The court will consider all the circumstances, including group structure and the nature of the underlying liability.

Insurance and investor risk

Insurance coverage for BLO liabilities remains uncertain.

• Risk managers should review whether existing policies respond to BLO exposure; and
• Investors and parent companies should recognise that group association may bring them within scope for building safety claims.

This may necessitate enhanced indemnities, insurance protections and contractual risk allocation where there is potential to be treated as an “associate” under the BSA.

Building Safety Act enforcement – six cases that have redefined liability and risk

Corporate structures offer no safe harbour. Recent rulings confirm that associated companies, parent entities and even later acquirers can be held jointly and severally liable for remediation costs – sometimes decades after construction. Judges scrutinise ownership links, financial interdependence and group presentation to investors.

Voluntary action does not preclude recovery. Developers who remediate defects without legal compulsion can still pursue claims against consultants and contractors, aided by the BSA’s extended limitation periods. Professional advisers now face heightened exposure, reinforcing the need for robust contractual protections.

Leaseholder protections bite hard. Attempts to pass on legacy legal and professional costs have failed, with courts applying Schedule 8 retrospectively. Landlords must absorb these costs and factor them into future risk models.

In this round-up, we provide key takeaways from six landmark cases decided over the past year. Each illustrates how the BSA is being interpreted and enforced, highlighting evolving obligations for developers, investors, landlords and consultants. Together, they underscore the importance of proactive risk management and comprehensive due diligence across the property lifecycle.

GREY GR LIMITED PARTNERSHIP V EDGEWATER (STEVENAGE) LIMITED AND OTHERS

Associated companies could be held jointly and severally liable for remediation even if they weren’t directly involved in the development. Whilst there’s no automatic presumption of liability for associated companies, a wide range of factors may create links that make an order “just and equitable”.

Grey GR bought Vista Tower in 2018 and discovered serious fire safety defects from a residential conversion which took place in 2015. Grey sought a remediation contribution order in respect of the costs of fixing these issues from the developer responsible for the conversion, Edgewater, along with 90 associated entities.

The court considered whether it was “just and equitable” under Section 124 to order the associated entities to contribute towards the remediation costs, based on their corporate links to the developer, ultimately granting a Remediation Costs Order for £13 million against 76 of the entities.

In reaching its judgement, the court considered whether the associated company operated in the building/property sector, was presented to investors as part of the group (e.g. shared name), had common ownership with the Developer, and was involved in financial or other linked dealings.

Key Impacts

• Developers can’t hide behind corporate structures – group companies may be liable.
• Investors must assess group-wide exposure and legacy risks.

Further case details are available here.

URS CORPORATION LTD V BDW TRADING LTD [2025] UKSC 21

Developers who voluntarily fix safety defects can still recover costs and seek contributions from responsible parties. The Court confirmed that Defective Premises Act (DPA) can apply even where developers voluntarily remediate defects without legal obligation or current ownership.

A major developer, BDW Trading Ltd (BDW), undertook voluntary remedial works on two high-rise developments, Capital East and Freemans Meadow, after structural defects were discovered and attributed to URS Corporation Ltd.’s (URS) engineering design of the developments. BDW undertook the works despite no longer owning the development and had not been sued for remediation costs. It sought to recover its costs from URS in negligence and under the Defective Premises Act 1972 (DPA).

The Supreme Court confirmed that claims under the Defective Premises Act (DPA) can proceed up to 30 years after completion, thanks to the BSA’s extended limitation period, even if negligence claims are time-barred.

The Court confirmed that this extension applies even where developers voluntarily remediate defects without legal obligation or current ownership. It also clarified that professional consultants, such as engineers, fall within the DPA’s scope – broadening the reach of statutory duties under the BSA.

Key Impacts

• Voluntary remediation costs are recoverable if the developer acted reasonably in the face of safety risks, reputational harm, or potential future liability.
• Consultants and insurers face heightened exposure, even where developers act voluntarily. Robust contractual protections and risk assessments are needed from the outset of a project.

Further case details are available here.

381 SOUTHWARK PARK ROAD RTM CO. LTD V CLICK ST ANDREWS LTD (IN LIQUIDATION) [2024]

Insolvency won’t shield liability if there’s a viable parent company. Holding or parent companies are liable for building safety risks caused by subsidiaries despite separate legal personalities.

Click St Andrews Ltd, a ‘special purpose vehicle’ (SPV) developed 381 Southwark Park Road by adding a new storey on the top of the building.

The court found that the development was completed with building safety risks including structural and fire safety inadequacies. During the proceedings, the SPV entered liquidation and the leaseholder claimants applied for a BLO to assign responsibility for the building safety risks to its parent company Click Group Holdings Ltd.

The crucial consideration was the relationship between the SPV and the associated holding company – particularly common controlling persons, the nature of the companies’ businesses, and the prejudice caused by ordering a BLO. The SPV and associated company clearly shared controlling persons in the form of common directors. The judge further noted that the sole purpose of the SPV was to hold and develop the freehold property, and it was dependent on inter-company or inter-group loans from the associated company. In the absence of any prejudice, the judge considered it just and equitable to impose a BLO. The wealth of the associated parent company was deemed irrelevant.

Key Impacts

• Setting up an SPV to carry out a development and winding up the vehicle following completion will not protect parent companies from long-term liability for future defective works.
• Holding or parent companies are liable for building safety risks caused by closely related subsidiaries despite those subsidiaries having separate legal personalities.

Further case details are available here.

TRIATHLON HOMES LLP V STRATFORD VILLAGE DEVELOPMENT PARTNERSHIP & GET LIVING PLC [2025] EWCA CIV 846

A parent company can be liable for a developer’s defects, even if it didn’t own the developer at the time of construction. Liability can pierce the corporate veil going back up to 30 years, regardless of (lack of) direct involvement in the original development. Ownership transfer in either direction may not draw a line under risk.

Triathlon Homes LLP, a social housing provider and long leaseholder of five residential blocks in the former London Olympic Village sought Remediation Contribution Orders (RCOs) against Get Living Plc, the parent company of the blocks’ developer, Stratford Village Development Partnership (SVDP).

Get Living was not the developer but was held liable due to its association with SVDP as its parent company. The RCOs required the company to pay over £16 million to cover fire safety remediation costs – despite Get Living acquiring SVDP years after the development was completed and Get Living being neither involved in the original development (which used defective cladding) nor having benefitted from the receipt of proceeds of sale.

The Court held that it was “just and equitable”, as required by the BSA, to impose liability on Get Living even for costs incurred before the BSA came into force in June 2022.

Key Impacts

• Prospective corporate investors must consider the risks of inheriting liability when acquiring businesses.
• Investors will need to integrate both legal and technical construction and real estate BSA specific due diligence into their purchasing process, including establishing whether buildings included in the acquisition are “relevant buildings” and may have “relevant defects” as well as whether any remediation orders or RCOs have been issued or are likely.

Further case details are available here.

(NB. It should be noted that leave to appeal to the Supreme Court has been granted but only in respect of the issue as to whether the Act applies to costs incurred prior to the BSA coming into force).

ADRIATIC LAND 5 LTD V LONG LEASEHOLDERS AT HIPPERSLEY POINT [2025]

Landlords can’t charge leaseholders for professional costs related to building safety – even if those costs were from before the Building Safety Act (BSA) came into effect.

Adriatic Land was the freeholder of Hippersley Point, a higher risk building which required cladding remediation and other fire safety works. It applied for an exemption from the need to consult on major building safety works under section 20 of the Landlord and Tenant Act 1985. Although the Tribunal granted the exemption, it barred Adriatic from passing on the legal costs of its application to leaseholders.

Adriatic appealed this condition and the Court of Appeal held by a 2:1 majority that paragraph 9 of Schedule 8 applies retrospectively: qualifying leaseholders are protected from paying for remediation of “relevant defects” and related legal/professional costs – no matter when  those costs were incurred. It also confirmed this protection doesn’t breach human rights law.

Key Impacts

• All service charges relating to relevant costs caught by the leaseholder protections in Schedule 8 of the BSA ceased to be payable from 28 June 2022, even where these costs had occurred, been demanded or were payable before this date.
• Landlords must absorb legacy costs and factor future allocation risks.
• ‘Late paying’ leaseholders who failed to pay service charges for dispensation or building safety remediation costs before 28 June 2022 will no longer be liable for those costs, while leaseholders who paid before that date aren’t entitled to a refund.

Further case details are available here.

(NB. It should be noted that leave to appeal to the Supreme Court has been granted in respect of the issue as to whether the Act applies to costs incurred prior to the BSA coming into force. The appeal is linked to the Triathlon appeal on the same issue).

ALMACANTAR CENTRE POINT NOMINEE NO.1 LTD & ORS V PENELOPE DE VALK & ORS

BSA leaseholder protections can apply to defective cladding over 30 years old. Almacantar appealed a decision by the First Tier Property Tribunal, in which it was found that fixing defects to the exterior of Centre Point House, a relevant building constructed in the 1960s, fell within its repair obligations.

The Upper Tribunal decided:

• The leaseholder protections contained in the Building Safety Act 2022 (BSA) which protect qualifying leaseholders from paying service charge for fixing unsafe cladding may apply even where a “relevant defect” is not present.
• For the purposes of the BSA, the meaning of “cladding” is not limited merely to combustible cladding products affixed to the outside of a building, and could apply to a range of systems and materials. Similarly, the meaning of “unsafe” is not constrained to fire safety concerns.
• The limitation period of 30 years prior to the coming into force of the BSA does not apply to leaseholder protections in the BSA in respect of unsafe cladding remediation.

Almacantar was therefore required to pay for remediating the building’s exterior, and could not reclaim the costs of doing so from qualifying leaseholders.

The decision is subject to a further appeal by Almacantar is due to be heard in 2026.

Key Impacts

• The decision potentially broadens the range of defects for which landlords may be liable related to residential properties with qualifying leases.
• Extra caution should be taken by investors when acquiring residential buildings containing units subject to qualifying leases, as they may find themselves on the hook for remediation of defects, even where such defects arise from works carried out more than 30 years ago.

Further case details are available here.

Judicial guidance on defect claims and leaseholder protections under the Building Safety Act 2022

In Almacantar Centre Point Nominee No.1 Ltd & Ors v Penelope de Valk & Ors, on appeal to the Upper Tribunal (UT) from the First Tier Tribunal (FTT), the UT has held that:

• Proving the existence of a “relevant defect” as defined under the Building Safety Act 2022 (BSA) is not required to engage the leaseholder protections contained in the BSA which protect “qualifying leaseholders” from paying service charge for fixing unsafe cladding.
• The meaning of “unsafe cladding” goes beyond combustible products affixed to the outside of a building.
• The limitation period of 30 years prior to the coming into force of the BSA does not apply to leaseholder protections in the BSA in respect of unsafe cladding remediation.

The UT’s decision may expose landlords to greater risks of paying for remediation of residential buildings that are deemed unsafe.

Background

This case concerns the recovery of service charge by Almacantar, the landlord, from the leaseholders of dwellings at Centre Point House.

Centre Point House is a relevant building for the purposes of the BSA, and was built in the 1960s. Its façade had deteriorated over time and was assessed as being in poor condition. Due to its original design, the FTT declared it to be “inherently defective from the date it was completed“.

Almacantar put forward a scheme to remediate the defects. The work would cost around £7,000,000; around £240,000 per flat. The case centred on whether Almacantar could recoup this sum from the leaseholders via the service charge.

The FTT found that while the proposed scheme fell within Almacantar’s repair obligations under the leases (and therefore service charge could otherwise be recoverable from the leaseholders), leaseholders with “qualifying” leases could rely on the leaseholder protections contained in the BSA, and were exempted from paying service charge related to “cladding remediation“. Almacantar appealed to the UT.

Protections for Qualifying Leaseholders

The BSA protects qualifying leaseholders from paying certain service charges for remedying “relevant defects” and all service charges for “cladding remediation“.

Such protections are only available to leaseholders owning a “qualifying lease“. Ascertaining whether a lease is a ‘qualifying’ lease is complex and landlords and leaseholders should seek detailed advice on this.

For information on qualifying leases, click here: Building Safety Act 2022, a landlord’s guide to leaseholder protections – Wedlake Bell.

In the instant case, there were 13 qualifying leaseholders with interests in 18 of the 36 flats at Centre Point House.

Relevant Defect Required?

Paragraph 8 of Schedule 8 of the BSA provides: “no service charge is payable under a qualifying lease in respect of cladding remediation“. In its appeal, Almacantar argued that in order for that leaseholder protection to apply, that cladding remediation must also include “relevant defects“.

The definition of a “relevant defect” under the BSA is also a complex area of law and beyond the scope of this article. However, the key point for the purposes of this case is that “relevant defects” must arise from works which took place within the 30 years prior to the BSA coming into force. Therefore, the original works at Centre Point House, which were carried out between 1966 and 1969, could not have caused relevant defects.

While the wording in Paragraph 8 of Schedule 8 of the BSA appears unequivocal, Almacantar put forward numerous arguments regarding interpretation of the BSA wording, including that:

• Other related sections of the BSA expressly provide that Schedule 8 applies to the remediation of relevant defects only; therefore, that requirement must be satisfied to engage the cladding remediation
• Previous case law provides that Schedules to an Act are subsidiary to the operative provisions contained in the Act itself.
• The drafting of the Explanatory Notes of BSA indicate that Schedule 8 relates to relevant defects only.

However, the UT decided that the wording in Paragraph 8 of Schedule 8 should be read at face value. In reaching its decision, the UT considered the underlying aims of the BSA and the intentions of the government. In particular, the UT referred to a ministerial statement that “no leaseholder living in their own flat ‘would have to pay a penny to fix dangerous cladding’”. The UT noted that Paragraph 8 of Schedule 8 provided a ‘fallback position’ for leaseholders whose buildings had unsafe cladding that was installed before the 30-year cutoff date for relevant defects.

Proving the existence of relevant defects was therefore not required to engage the protection from service charges to pay for cladding remediation, and it was not relevant that the defects at Centre Point House arose from works which took place more than 30 years before the BSA came into force.

“Cladding”

Next, the UT turned to the definition of “cladding remediation” in the BSA, which is “removal or replacement of any part of a cladding system that (a) forms the outer wall of an external wall system, and (b) is unsafe“.

Almacantar had argued that the external wall components at Centre Point House were not “cladding” forming part of a “cladding system” since they were built into the external wall itself, rather than being a product affixed to the external wall (such as the cladding used at Grenfell Tower).

The UT noted that “cladding” is not defined in the BSA. It considered definitions from the Oxford English Dictionary and RICS Guidance, but ultimately did not introduce any new definition. The UT decided that the FTT’s decision that the exterior of Centre Point House did constitute cladding should stand. The FTT had considered evidence over 5 days (including technical evidence from experts) and was therefore entitled to come to its conclusion.

“Unsafe”

Turning to the interpretation of the word “unsafe“, Almacantar argued that the BSA covered cladding which was “inherently unsafe” and “posed a fire safety risk” but that this did not extend to general degradation or structural decay over time. However, the UT decided not to limit the ambit of Paragraph 8 purely to inherent fire safety concerns. It decided the word “unsafe” should be read with its ordinary and natural meaning.

In its decision, the FTT had already found that “unsafe” means more than simply “out of repair” and encompasses a range of threats to the building, its residents or the public, thus setting a high threshold. Considering the FTT’s finding that the cladding at Centre Point House posed a risk of fatality to passers-by, the UT agreed with the FTT’s decision that the cladding was unsafe.

Almacantar’s appeal was therefore dismissed. The qualifying leaseholders were exempt from paying for the cladding remediation at Centre Point House, meaning that those costs fell to be borne by Almacantar.

Key Take-Aways

The FTT and UT have:

• Broadly interpreted the meaning of “unsafe cladding“.
• Confirmed that the 30-year limitation period does not apply to the leaseholder protections in respect of cladding remediation.

The UT has potentially opened the door to claims against landlords from leaseholders for past service charge contributions to fix historic defects on exteriors of buildings constructed pre-1992. Looking forward, landlords could be at risk of greater liability for remediating buildings with ageing out-of-repair exteriors.

The UT acknowledged Almacantar’s argument that this apparent expansion in scope of the leaseholder protections could impact landlords extraordinarily. However, it considered that this accords with the policy of the BSA, and as it observed its decision in Adriatic Land 5 Limited v Leaseholders at Hippersley Point, “what might be seen as unfair results are…simply a reflection of life in the new world of the (BSA)”.

The decision is subject to a further appeal by Almacantar is due to be heard in 2026.

Staged HRB building control approvals – updated guidance

A staged G2 application can now be made for new Higher Risk Building (HRB) developments — those over seven storeys or 18 metres — where works will be delivered in stages/phases. Each stage is assessed and approved separately by the BSR, and stages can start or finish on the same or different dates. This approach applies to single tower projects and multi-tower schemes.

Crucially, BSR will now accept staged G2 applications for all new single tower HRBs classified as “non-complex” (with no more than one basement level), separating groundwork and foundations from the above-ground structure. This marks a significant improvement to the G2 process. The definition of “complex” versus “non-complex” is set out in Regulation 46A of the Building Regulations 2010. Previously, staged applications were limited to complex buildings such as multi-tower developments, buildings with multiple basement levels, or public buildings. The change means developers can seek early approval for groundwork and foundations, then apply later for the superstructure, provided BSR criteria are met. This could allow earlier site starts while later designs are finalised, rather than waiting for full development approval upfront.

For multi-tower projects, BSR now advises contacting them before submitting a staged application — a major shift from earlier guidance that ruled out pre-application advice. Developers should factor this into programmes, although it remains to be seen how quickly advice will be available. Whether or not advice is sought, no building work can begin on any stage until G2 approval for that stage is granted.

BSR’s aim is clear: streamline G2 approvals, reduce bottlenecks and accelerate HRB construction. If properly resourced, staged applications should lead to faster approvals, parallel workstreams and more effective project management, particularly for complex schemes. They would also allow design teams to focus on discrete elements while maintaining compliance across the whole project. However, programmes must account for potential delays in multiple G2 approvals, and parties will need to agree who bears the risk of any hold-ups.

For further information, the BSR Guidance to staged G2 applications can be found here: Building Safety Regulator: latest news and updates and the CLC guidance here: News – Construction Leadership Council

Building Liability Orders and Corporate Risk

Updating Contracts for Building Safety Regime

BSA in practice: challenges and evolving solutions

Gateway 2: BSR Bottlenecks

Unsurprisingly, delays in securing Gateway 2 approvals from the BSR remain high on the agenda.  The delays have a domino effect: developers are unable to commence construction, and investors are reluctant to release funds which in turn can affect housing delivery targets.

Concerns remain around lack of BSR resources and insufficient guidance to the industry exacerbates the problem.  Although organisations such as the Construction Leadership Council (CLC) and Build UK have issued excellent guidance, the consensus was that there is still a need for more structured engagement with the BSR, particularly at the pre-application stage.

Programming adjustments and change procedure

Contractors generally are calling for Pre-Construction Services Agreements (PCSAs) at an early stage to enable them to engage their supply chains sooner. However, PCSA arrangements can be costly and risky if those arrangements last for prolonged periods and pose significant challenges to contractors who need to lock in sub-contractor prices for longer durations. However, early commitment to sub-contractors could provide them with some clarity around future pipelines of work.

The need to front-load design development to meet Gateway 2 requirements has significantly altered project programming for contractors and reduced the scope of value-engineering for both contractors and sub-contractors alike. Developers are wary of changes to design and layouts once construction has started due to the need to seek BSR approval during the build. One unintended consequence is that the change procedure might stifle innovation and efficiency, for example, by limiting the ability to adapt to technical innovations during long build periods.

Insolvency scenarios add another layer of complexity. A change in contractor mid-project could trigger fresh BSR approvals, and cause delays and contractual disputes.

Gateway 3: challenges

Gateway 3 presents its own set of challenges.  Extending contract programmes to accommodate BSR sign-off and delays ahead of practical completion might be favoured by developers and funders but is onerous for contractors, particularly in terms of liability for liquidated damages. The difficulty of unoccupied units and concerns around site security and insurance also need to be addressed. For developers (and their lawyers) the challenge is to find solutions to enable projects to remain financially viable for contractors while satisfying concerns of developers and their funders.

A possible mechanism to achieve partial relief and financial certainty for contractors while maintaining compliance with Gateway 3 regulatory requirements is to treat “physical completion” prior to the BSR completion certificate application akin to sectional completion. For contractors, this would allow for some relief from liquidated damages and partial retention release, while a separate financial rate could be provided for the Contractor to cover the interim period until Gateway 3 approval and final completion of the works are achieved.  This requires careful thought. There would still need to be sufficient contractual commitment and incentive for contractors to provide developers (and their funders) certainty in the delivery of all the requisite documentation to be included in the Gateway 3 application, but this is an example of a possible way to manage the risks surrounding Gateway 3.

Clarity from the BSR in relation to the extent of any snagging work or non-Building Regulations works that could be carried out in the period leading up to Gateway 3 approval would also be helpful when considering Gateway 3 risk. Debate around the scope of work that contractors could carry out post-Gateway 3 application concluded that this was likely to be limited to such things as landscaping (so long as this did not affect fire escapes) or minor finishes only.

Final thoughts

It’s hoped that the recent changes at the BSR and commitment to clear the backlog of Gateway 2 applications will help projects get off the ground.  However, there are still major challenges in terms of BSR resources and uncertainty in the market over the Gateway system.

On a positive note, the consensus was that despite the friction that the regulatory landscape has introduced to the development and construction process for higher-risk buildings, the construction industry is adapting and will find a way to make the Gateway system work.

Autumn BSA Regulatory Update

On 7 October 2025, amendments to the Building Regulations 2010 and Registered Building Control Approvers (RBCAs) Regulations (England) 2024 came into force. These:

• Clarify the obligations of clients/developers (Client) in relation to building control completion notices, which must be given within five days after construction work has been completed. These notices are required to include key completion statements from principal or sole contractors and designer dutyholders required under the Building Safety Act (BSA), the amendments set out what must happen if any of these statements are unavailable.
• Place new obligations on RBCAs in relation to the notification of contravention orders issued under the BSA.
• Clarify the completion notice requirements that apply to building work which was subject to an Initial Notice, but where supervision has now passed to the relevant authority. This will be relevant, for example, where private building control approvers cease to trade.

Under the amended regulations, where a Client is unable to obtain a completion statement from the principal or sole contractor and/or the principal or sole designer, the completion notice submitted to the relevant building control authority – whether the Building Safety Regulator (BSR) or a local authority (including where supervision has reverted to the local authority) must now include a formal explanation from the Client giving the reasons for the absence of such statements.

In parallel, the amended regulations introduce a new requirement for the BSR to notify all local authorities in England of any serious contravention orders which are issued. This measure is intended to enhance transparency and regulatory oversight.

If the Initial Notice for building regulation approval (being the notice required to be given by the registered building inspector prior to the commencement of works) is cancelled by the relevant building control approver or Client, a declaration must be made on the cancellation form if the person completing the form is subject to a serious contravention notice. A new Initial Notice cannot then be given whilst the works remain subject to a contravention notice.

Compliance with Building Regulations generally – a Reminder

Clients, designers and contractors all have legal duties to comply with the relevant requirements of the building regulations and local authorities responsible for building control have a general duty and statutory obligation to enforce those regulations. Clients are also obliged under the BSA to make suitable arrangements for the planning, managing and monitoring of a project to ensure compliance with all relevant building control requirements.

Generally, the BSA has strengthened the building regulations regime to improve oversight and ensure compliance. As well as being able to cancel Initial Notices in an increased number of circumstances, a building control local authority can issue compliance notices requiring non-compliant work to be remedied by a set date and stop notices requiring work to stop immediately. Failure to comply with such notices may be a criminal offence not only for corporate bodies but also culpable individuals within those corporate organisations.

Failure to comply with building regulations can be a statutory criminal offence punishable by a fine or imprisonment of culpable individuals. This is in addition to possible civil liability if, as is likely, the non- compliance is a breach of a relevant contract.

 Practical implications of the October 2025 Amendments

While the latest amendments are relatively concise, their practical implications in view of the overall duties referred to above are important. There are two key areas where proactive steps which should be taken to ensure compliance:

1. Strengthen Project Documentation Protocols

Clients should ensure that a robust documentation strategy is implemented from the outset of their projects to ensure compliance generally with the building regulations and the BSA. This includes ensuring, in line with the new regulations, that a contemporaneous record is maintained of all efforts to engage with principal contractors and designers, as dutyholders, regarding their statutory declarations. Where a completion statement cannot be obtained, the Client’s explanation as to why that has not been possible, must be credible, detailed, and supported by evidence of reasonable attempts to secure the required documentation. A Client should satisfy itself that these checks are being made and properly recorded bearing in mind that the Client itself is a dutyholder.

The lack of sufficient explanation and supporting evidence as to why the statements cannot be obtained in a notice will at best delay a certificate of satisfactory compliance with the building regulations or at worst eventually lead to sanctions and or enforcement action being taken.

2. RBCAs to Establish a Protocol for Contravention Orders

Where a serious contravention order is issued to an RBCA, it is now mandatory for the Building Safety Regulator to notify each building control authority in England. To ensure timely and accurate compliance with these regulations:

• RBCA organisations (whether local authority or private) should establish an internal reporting mechanism to flag and escalate such orders.
• A designated compliance officer or legal contact should be responsible for recording and updating the data.
• A centralised log of all contravention orders and related correspondence should be maintained for audit purposes.

These procedural steps should help avoid inadvertent breaches of the regulations and reinforce a culture of transparency and accountability.

Final Thoughts

These amendments to the regulations, which are mandatory for all construction projects, reflect the government’s continued focus on strengthening the regulatory framework for building safety in England. Clients and construction professionals, particularly building control approvers, must not only understand the letter of the law but also embed practical safeguards into their own project management to ensure compliance.

The original regulations and the recent amendments should be read together:

• The Building Regulations etc. (Amendment) (England) Regulations 2025
• The Building (Registered Building Control Approvers etc.) (England) Regulations 2024
• The Building Regulations 2010
• The Building Act 1984

For further advice on implementing these changes or reviewing your current compliance protocols, please get in touch with our Construction team.

Do due diligence and your own surveys before appointment

The Building Safety Act 2022 (BSA) was the Government’s decisive response to the Grenfell fire tragedy, based on Dame Judith Hackett’s review of building safety. Aimed at improving the safety of people in and around buildings and improving building standards, the scope of the BSA is extensive, with 170 sections and numerous regulations requiring secondary legislation.

This article focuses on key provisions affecting IPs and receivers in real estate and construction situations.

The BSA aims to make buildings safe, creating the Building Safety Regulator (BSR) to oversee safety and standards, improve industry competence, and enforce the new regulatory regime. The BSR is now the sole authority for ‘higher‑risk buildings’ (HRBs), playing a crucial role at all stages of these structures. If you are appointed over a company involved in HRB projects, engaging with the BSR and following procedures is essential.

New registers maintained by the BSR include:

1. Occupied higher‑risk buildings
2. Building inspectors
3. Building control approvers (replacing approved inspectors)

The BSA also aims to persuade owners, developers, and construction parties to fix issues and punishes non‑compliance, bringing major changes to roles and responsibilities in construction.

Higher‑risk buildings

An ‘in occupation’ HRB is defined as a building that is at least 18 metres or seven storeys in height with at least two residential units. There is a slightly different definition for HRBs for entirely new construction work in that care homes and hospitals are also included. For in‑construction HRBs, it is necessary to comply with the ‘gateways’ regime. However, a process similar to the gateways must be complied with for work to existing HRBs.

The gateways regime

The ‘gateways regime’ for in‑construction HRBs refers to the three ‘gateways’ outlined in building safety regulations, and includes a series of ‘hard stops’ that need to be passed with approval at each stage of a project:

• Gateway 1 – As part of planning permission is granted
• Gateway 2 – Before work can start
• Gateway 3 – On completion and before the building can be occupied

Insolvency processes and due diligence

Office‑holders will need to review whether the entity they seek appointment over will have obligations under the BSA – obligations which may not have existed on the last occasion they accepted a similar appointment. There are, for example, extensive obligations imposed on an ‘accountable person’. There might even be more than one ‘accountable person’. Such legal persons will be obliged to assess and manage risks of fire and structural failure in an occupied building. Proposed appointees will need to carry out due diligence. Will they have the time and resources to comply? What information/ documentation will they need to assess the situation? Is an EWS1 (a certificate based on a risk assessment conducted by a fire engineer) necessary to satisfy mortgage lenders? A survey? How much extra cost and risk will be involved, and can they obtain adequate insurance, and ideally an indemnity?

Accountable person

Under the BSA, the accountable person (AP) is defined as anyone who has the obligation to repair and maintain the common parts of an HRB. These common parts can include shared areas like hallways, stairwells, and corridors within a building.

The AP should not be confused with the principal accountable person (PAP). The PAP is responsible for the outer structure of the building. This typically involves the maintenance, repair, and safety of the building’s external elements, such as the facade, roof, windows, and other structural components. The PAP is often the landlord or the management company responsible for the building’s overall upkeep. While APs and PAPs are rarely individuals, there must always be an identifiable legal person or entity assigned to these roles.

All PAPs will necessarily also be APs, but not all APs will be PAPs. It is not open to them to simply delegate their duties elsewhere, but of course they can engage a management company to assist and also seek professional advice.

APs’ duties include assessing and managing building safety risks, ensuring proportionate measures are in place to manage these risks, cooperating with other APs in different parts of a multi‑tenanted building and providing information to the BSR, residents and certain other parties.

PAPs and their duties

PAPs are under the same duties as APs but are responsible for various additional duties including to:

• Register the HRB with the BSR
• Provide key information about the buildings to the BSR
• Apply for a building assessment certificate if directed by the BSR
• Produce a safety case report
• Establish and operate a mandatory occurrence reporting system
• Prepare a residents engagement strategy
• Establish and operate a complaints procedure.

Contravention of these duties is a criminal offence. The AP and PAP are likely to be the borrower or connected company rather than the office‑holder, but nonetheless there could potentially be the risk of fault‑based (tortious) liability and expense claims, so it should very much be in the office‑holder’s interests to take appropriate advice and ensure compliance with these specific BSA requirements.

Reporting requirements

Where an IP is appointed over a responsible person (RP) there are reporting requirements under s125A BSA.

Who is a responsible person?

• In the case of an HRB, the responsible person is an AP for the building
• In the case of a relevant building (a self‑contained building, or self‑contained part of a building, in England that contains at least two dwellings, and is at least 11 meters high or has at least five storeys) that is not an HRB, the responsible person would be an AP for the building if, effectively, the building was an HRB.

The reporting information to be provided within 14 days of appointment includes the name and address of the person in relation to whom the IP is appointed and details of the IP, the address the building, the register of title and title plan and such information set out in the table in rule 1.6 of the Insolvency (England and Wales) Rules 2016 (SI 2016/1024) as is known to the IP. Readers will know that this rule contains a table setting out information identifying a person, company, office‑holder or proceedings, such as name, address and registration number.

The IP must give the information to:

• The fire and rescue authority
• The local authority; and
• The BSR (if the IP is appointed over an AP for an HRB).

Note also that where there is a live construction project on an HRB and an IP is appointed, there is an obligation for an IP to notify the BSR within 14 days of their appointment. The IP may take on the obligations of the ‘client’ in relation to the HRB work (obligations under secondary legislation under the BSA applicable to construction works) if they progress the works, so all work on any HRBs should not progress unless specialist advice has been taken.

Relevance to IPs

As is often the case with legislation enacted in a hurry, however laudable the aim, the BSA envisages solvent companies controlled by a board of directors and does not always translate well to distressed entities in a formal insolvency process.

Different parts of the BSA have come into force gradually since June 2022 with the reporting requirement only coming into force on 24 July 2024. It is still at an early stage in terms of liability for an IP. To the extent that IPs are appointed over, and therefore in control of, the AP/RP, they may face liabilities as a result of not complying with the duties and obligations of the AP/RP under the BSA. There could be a potential financial impact on an IP who allows or causes an accountable person to breach their obligations, by way of fines, costs, or other unexpected outlays which could rank as an expense of the administration (for example) with ramifications on distributions and of course their own remuneration.

In terms of criminal liability, there is a possibility under the new legislation that an IP could be found criminally liable for the actions of the AP.

The last high‑profile prosecution of an IP reached the Supreme Court in R ( on the application of Palmer) v. Northern Derbyshire Magistrates’ Court and another [2023] UKSC 38. The facts of the case concerned actions by one of the joint administrators to make the employees of the company’s warehouse in Dundonald in Scotland redundant the day after it went into administration.

Section 194 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) requires employers to notify employee representatives of potential redundancies, and failure to do so is a criminal offence. However, s194(3) provides an exemption for certain individuals, specifically those who are not considered ‘officers’ of the employer.

The Supreme Court unanimously allowed the administrators’ appeal on the grounds that Mr Palmer, was not an ‘officer’ for the purposes of s194(3) of TULRCA.

In that case, the Supreme Court held that a person appointed as an administrator under the Insolvency Act 1986 does not meet the statutory definition of an ‘officer’ in that context. An administrator’s role, the court noted, is distinct from that of a company director or other managerial roles that might typically be considered ‘officers’ under TULRCA.

This decision could also apply to s161 of the BSA, which provides for personal liability for offences under parts 2 and 4 of the BSA and uses the word ‘officer’ – albeit the context is very different.

In extreme cases, it may be that the costs of compliance and renovation of an HRB are such that the property is sufficiently ‘onerous’ to warrant the liquidators’ power of disclaimer under s178 Insolvency Act 1986. The better approach is probably to do as much due diligence as possible before accepting an appointment. The prospective appointee will also want to ensure they have sufficient pre‑appointment funding to obtain surveys/ specialist reports to establish if the property falls within the BSA and HRB definition and, if so, establish the extent of remediation works required and the potential cost. The appointor and secured creditors will in addition need to understand the time and costs required to bring the development to market. Finally, the IP will want sufficient funding, comfort (indemnity) and insurance to satisfy themselves and their risk committees that the benefit of the job will outweigh the risk, albeit that the risks are still new and the BSA is still bedding in.

Solicitor apprentice Isabelle Burnett at Wedlake Bell also contributed to this article.

This article first appeared in the Summer 2025 edition of Recovery, the magazine for professionals working within insolvency and business recovery and is reproduced with permission of R3, the Association of Business Recovery Professionals.

“In the light of the Building Safety Act, what does a company seller or purchaser need to consider when that company owns property assets?”

The Case in Brief

• Triathlon Homes LLP, a social housing provider, successfully obtained Remediation Contribution Orders (RCOs) introduced by the BSA against Get Living Plc, the parent company of Stratford Village Development Partnership (SVDP), the original developer of five residential blocks in Stratford, which were part of the Olympic Village. The RCOs required them to pay over £16 million to cover fire safety remediation costs — despite Get Living acquiring SVDP years after the development was completed and Get Living not being involved in the original development which used defective cladding whatsoever.
• The Court held that it was “just and equitable” as required by the BSA,to impose liability on Get Living, even for costs incurred before the BSA came into force in June 2022.

Key Legal and Commercial Implications for M&A Transactions

1. Retrospective Liability: Buyer Beware

• The BSA allows for RCOs to be made in respect of historic costs. This means that a company acquiring a target with property assets which qualify as relevant buildings — even if the acquisition occurs long after construction — may inherit liability for building safety defects dating back up to 30 years.
• The court in Triathlon explicitly endorsed the statement from the First Tier Tribunal (FTT) to which an application for an RCO had first been made that ‘we give no weight to the changing identity of the ultimate beneficial owners‘ of the developer company. The BSA allows affected parties to look up the corporate chain to ‘search for pockets … deep enough to pay for remediation‘ even where those pockets have no connection to the development and acquired the developer company after the development was long completed.
• The court suggested that its decision may have been different had the associated parent company decided to acquire just the land and buildings, leaving the liabilities of the developer behind, as opposed to acquiring the development company. The court’s view was that, in deciding to acquire the assets and liabilities of the development company as a whole, and not just the real estate assets, the parent company (and its future investors) understood the risk of historic liabilities coming to bear.
• M&A Implication: Buyers must conduct very careful due diligence on the development history of all relevant property assets with a look-back period of up to 30 years across the whole corporate structure of the target company. Specialist advice should be sought on a case-by-case basis when deciding whether to acquire/sell an SPV versus the underlying asset.

2. Association Risk: Group Companies Are Not Shielded

• Under the BSA, liability can extend to associated companies— defined broadly to include entities under common control or ownership. The Court in Triathlon explicitly emphasised that the Act was designed to prevent developers from shielding assets behind “thinly capitalized SPVs”.
• In Triathlon, Get Living was not the developer but was held liable due to its associationwith SVDP as its parent company. This sets a precedent that the corporate veil can be lifted and that liability can be triggered, regardless of (lack of) direct involvement in the original development. The court explicitly stated in the case that “a wealthy parent company or other wealthy entity which is caught by the association provisions cannot evade responsibility .… by hiding behind the separate personality of the development company.”
• However, this is a new and novel area of law and the boundaries of the BSA definitions are still being tested. The court in Triathlon suggested, although not in a binding manner, that there may be cases where it would not be ‘just and equitable’ for liability to attach to a company that is caught by the association provisions. The specific example the court gave was that under the BSA a company is deemed an associated company if at any time during the 5 years prior to 14 February 2022 (when the relevant provisions came into force) a director of the developer was also a director of that company. This could, in theory, mean that BSA liability attaches to companies that have no connection whatsoever with relevant properties or developments other than that common director meaning that for example, charitable companies, family investment companies could all potentially be caught. The court intimated that it may not be just and equitable to pursue such associated companies, but this has not yet been tested. It is important, therefore, that specialist advice is sought wherever there is a connection to potential BSA liability, no matter how remote.
• M&A Implication: Buyers acquiring a group company must assess whether any subsidiaries or affiliates were involved in development or management of affected buildings. Sellers should anticipate scrutiny of their group structure and historical roles.

3. Public Funding Immunity

• Although public funds (principally the Building Safety Fund set up by the Government to remediate unsafe qualifying buildings) may initially cover remediation costs, this does not protect developers and their associates from liability for those costs. In Triathlon, the court made it explicitly clear that public funding does not absolve developers or their associates of liability, stating that public funding ‘is to be characterised as a last resort’ and that the BSA provisions should be used to ground liability ‘despite the fact that (public) funding has been provided’.
• M&A Implication: Buyers should not assume that the presence or use of public funding eliminates risk, even where that funding has been approved, paid out, and works commenced or even completed. Indemnities and warranties should explicitly address potential clawbacks or RCOs.

4. Claims against third parties are no protection

• Liability under the BSA is not affected by the potential liability of third parties; claims can be properly made against developers and their associates even if the eventual liability may sit with third parties such as architects/builders/engineers or the builder. The developer/associate can be properly subject to an RCO even where there is ongoing litigation against a third party.
• M&A Implication: Buyers cannot assume that they will not need to foot the costs for remediation works just because there is ongoing, or even successful, litigation against a third party who is ultimately responsible for the defects; an RCO can still be made against the developer or their associate. Moreover, the cost of remedying building safety defects within the meaning of the BSA, cannot be recovered from tenants by way of service charge.

5. Due Diligence Must Go Beyond Title and Tenancy

Traditional property due diligence, focused on title, leases, and income, is no longer sufficient. Buyers must now assess:

• Whether the building is a “relevant building”under the BSA (11m+ or 5+ storeys).
• Whether there are “relevant defects”(fire safety or structural).
• Whether the company is or was a landlord, developer, or associate.
• Whether any remediation orders or RCOshave been issued or are likely.
• M&A Implication: Legal and technical construction / real estate due diligence must be integrated. Engage fire safety consultants and building surveyors early in the process to advise as well as lawyers familiar with the implications of the BSA and the Triathlon decision.

6. Contractual Protections: Indemnities, Warranties, and Escrows

Given the potential for significant post-completion liabilities, buyers should negotiate:

• Warrantiesconfirming no known defects or RCOs.
• Indemnitiesfor any future liabilities under the BSA.
• Escrow arrangementsor price adjustments to reflect remediation risk.

Sellers, in turn, should prepare for these negotiations by conducting internal audits and disclosing known risks.

Strategic Recommendations

For Buyers:

• Map the corporate structureof the target and its historical involvement in development.
• Assess all property assetsfor BSA exposure — not just current liabilities but potential future claims.
• Negotiate robust protections, including indemnities, warranties, and retention mechanisms.
• Engage multi-disciplinary advisors, including legal, technical, and insurance specialists.

For Sellers:

• Audit your portfoliofor BSA risks and disclose them transparently.
• Resolve known issueswhere possible to enhance deal certainty.
• Prepare for buyer scrutinyof historical development roles and group structure.
• Consider ring-fencing liabilitiesthrough restructuring or insurance.

Conclusion

As showcased in the Triathlon case, The Building Safety Act has created a regime where liability can pierce the corporate veil, going back up to 30 years. For buyers and sellers of companies with property assets, this means that building safety is no longer just a compliance issue — it’s a material transaction risk that must be addressed head-on.