Urban Splash and four associated companies have been ordered to contribute £46.5m towards fire safety remediation at seven apartment blocks in Manchester, following a Government legal action to recover public money spent addressing defects at the former developments.
The five businesses have until 3 December to make the payments after the First-tier Tribunal (Property Chamber) rejected their challenge to the scale and cost of the works. However, the tribunal reduced the amount recoverable from the companies by 10%, reflecting Government failings that it found had contributed to the building safety crisis.
The case concerns Burton Place, Chips, Moho, The Box Works and the Christabel, Emmeline and Sylvia apartment blocks. The developments were built between approximately 2000 and 2008, but investigations following the Grenfell Tower fire identified a range of safety defects, including combustible materials, ineffective cavity barriers, inadequate fire-stopping and failures in compartmentation.
By the time the defects were addressed, the buildings had passed out of Urban Splash’s ownership. The Government subsequently paid or committed approximately £51.5m through the Building Safety Fund to finance remediation.
Urban Splash disputed the extent and cost of the work, arguing that the publicly funded approach had resulted in unnecessarily expensive solutions. At Burton Place, the estimated cost increased from around £9m to almost £23m, while the funding approval for Moho rose from £9.9m to more than £18m.
The tribunal concluded that the increases were principally attributable to additional defects identified as investigations progressed and parts of the buildings were opened up. It found that no technically viable alternative offering materially lower costs had been demonstrated.
In its ruling, the tribunal said: “The evidence therefore did not support the contention that public funding had produced ‘gold-plated’ remediation rather than reasonable responses to the defects encountered.”
The liability order covers Urban Splash Limited, Urban Splash Developments Limited, Urban Splash Group Holdings Limited, Urban Splash Work Limited and Stubbs Mill LLP. All five companies are jointly and severally liable for the amount awarded.
Most of the £46.5m will go towards reimbursing Government expenditure on the remediation programme. A further £741,594 is payable directly to Moho’s management company.
The tribunal also took account of a separate £600,000 settlement reached by Shed KM Holding Limited and Shed KM Limited, which was credited against the Moho claim. Claims against two family investment companies and two residential fund entities were dismissed.
The decision adds to the Government’s efforts to recover the cost of fire safety work from developers and other parties responsible for buildings affected by serious construction defects. It follows an earlier ruling against Hollybrook, which was ordered to pay £3.68m towards publicly funded remediation at Hallings Wharf Studios in east London.
