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Expanding Liability under the Building Safety Act 2022: What Developers and Landlords Need to Know

The Building Safety Act 2022 (BSA) continues to redefine the liability landscape for residential and mixed-use development in England and provide an increasingly forceful litigation framework.

Over the past two years, the courts have adopted a distinctly purposive interpretation of the Act, consistently widening the routes by which claimants can recover the costs of remediating historic defects. In addition to the extended limitation periods and enhanced regulatory powers granted by the BSA, recent case law demonstrates a clear judicial trend towards extending liability across the whole development chain and deep into associated corporate structures.

Key Recent Cases

381 Southwark Park Road RTM Co Ltd & ors v Click St Andrews Ltd & anor (TCC, 2024)

In 381 Southwark Park Road the first Building Liability Order (BLO) was granted under section 13. The High Court imposed joint and several liability on an associated parent company where the original development vehicle was a thinly capitalised special purpose vehicle (SPV).

The judgment makes clear that historic corporate structuring offers limited protection where it is just and equitable to extend the scope of liability to entities with real control and financial substance – an approach which has since been re-emphasised in Triathlon.

BLOs operate via statutory association rather than traditional veil piercing, enabling liability to be extended across group structures. This decision signals the Court’s readiness to deploy BLOs to prevent asset structuring from frustrating remediation cost recovery, and establishes a practical template for claimants seeking to reach solvent group companies in circumstances where those companies might have thought themselves ring-fenced from any claims.

URS Corp Ltd v BDW Trading Ltd [2025] (21 May 2025)

The Supreme Court’s decision in URS v BDW is now the leading authority on the interaction between the BSA, the Defective Premises Act 1972, and contribution claims.

The Court confirmed that where a developer undertakes remedial works to address serious fire or structural defects, those costs are not irrecoverable merely because the developer was not under an immediate legal compulsion to act. While the “reasonableness” of such remedial works is relevant, the Court indicated that public and reputational interests would factor into any assessment. It even went so far as to suggest that in such cases, remedial works are not entirely “voluntary”.

Perhaps more importantly, the judgment confirmed the breadth of section 135, allowing the Act’s extended retrospective limitation periods to support related contribution and negligence claims. The practical effect is that parties involved in projects completed decades ago may now face revived liability with real financial consequences, regardless of whether the claimant was under and enforceable legal obligation to remedy the defects in question.

Triathlon Homes LLP v Stratford Village Development Partnership [2025] EWCA Civ 846

If URS expanded recovery rights horizontally across the professional team, Triathlon Homes strengthened the vertical hierarchy of responsibility.

In Triathlon, the courts have confirmed that remediation contribution orders (RCOs) should be used robustly to ensure that developers and associated landlords bear the primary financial burden of making buildings safe:

1. The fact that remediation costs had initially been met through the Building Safety Fund did not prevent the claimant from recovering these privately; and
2. “Associated Companies” was construed broadly for the purposes of RCOs so as to include any associated group entities, including associates acquired after the fact, or entities having had no involvement in the relevant development.

The significance of Triathlon further lies in its endorsement of a broad “just and equitable” discretion which focuses on developer primacy, repayment of public funds, means, and overall fairness – though there is no presumption that any wealthy associate should pay; the nature, degree and duration of association can still limit or defeat an RCO.

How Our Team Can Support You

The latest case law confirms that courts are increasingly willing to look beyond corporate form to actual control and benefit when imposing liability under the BSA. In this environment, legal risk management is now a strategic necessity.

Our construction law team provide end-to-end advice—from structuring, procurement and compliance to remediation strategy, dispute resolution, and regulator engagement. We also draft, review, and negotiate construction contracts on existing projects which allocate risk clearly, and maximise your recovery options in the event of any failure by your professional team to comply with their own obligations under the BSA.

If you think these developments may affect you, please do not hesitate to contact our team.

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Your Home, Your Risk: Why Legal Contracts Matter on Renovations

What value do you place on your home?

Your home is one of the largest investments you will make. In almost all cases, it is your most important asset not just because of its capital value, but because it’s your home and hopefully a sanctuary. Yet so many of us neglect its importance when arranging for works to be undertaken to it.

It is exciting to be improving or extending your home. However, without proper planning and legal safeguards, home improvement projects very often spiral into dispute, financial loss, and even damage to your most valuable asset.

How can you protect yourself?

1. Contractor selection – Select your contractors and professionals very carefully.
2. Defined works – Be very clear about what is and what is not included.
3. Insurance – Make sure the contractor is adequately insured.
4. Contract – Have the contractors and advisers enter into a formal contract.

Selecting a Contractor

Just a few of the many considerations include:

• Where possible, obtaining a personal recommendation, and attending previous jobs and speak to the contractor’s client;
• Checking the contractor’s financial solvency; and
• Ensuring the contractor is adequately insured.

Defining the Works

Make sure that all the works you are instructing to be carried out are clearly defined, and that you specify to what standard these must be completed.

Insuring the Works

Even on small jobs, things can do drastically wrong – a nail through the wrong wall could mean a pipe bursting and flooding your home and any adjoining properties, or faulty wiring could result in fire damage to your property and contents. Standard home insurance will not cover any ongoing works, and you should ensure that your contractor (a) is adequately insured to cover these risks and (b) takes responsibility for such damage by means of a formal contract.

A Formal Contract

The best step you can take to protect yourself is put a proper building contract in place at the outset. A well-drafted contract does more than just describe the works to be carried out – it manages your risk, defines responsibilities, and provides legal recourse if something goes wrong.

Many homeowners assume that standard or unamended forms of agreement offer sufficient protection. In reality, these agreements are inherently contractor-friendly and leave homeowners exposed.

Why do you need a contract?

Without appropriate contractual protection, you may be exposed to serious risks which can affect your ability to live in, sell, or borrow against your home. For example:

1. Defective works

Statutory construction obligations are unlikely to protect you from the full extent of any damage and financial losses you might suffer as a result of poor workmanship. And even where they do, contractors routinely seek to limit your ability to recover losses by inserting onerous limitation clauses into construction forms. Even where you believe you are “covered,” you may find you cannot recoup your losses in practice.

2. Legal and Regulatory Consequences

If works are completed without the necessary approvals or certificates (e.g. building control sign-off or listed building consent), you may be in breach of legal obligations or planning conditions. Standard forms of contract tend to place the burden of complying with these on you, rather than on the contractor. This can cause problems years down the line. Solicitors acting for prospective buyers will raise enquiries about the works, and any gaps in paperwork will come to light.

3. Impact on Property Value and Mortgageability

Failure to complete your project in compliance with your mortgage terms could reduce a valuation of your home – or worse, lose you your mortgage. Mortgage lenders can refuse to lend against properties with unresolved building issues or works which have not been signed off. If you need to refinance or a buyer needs a mortgage, the transaction could fall through.

4. Inadequate Insurance and Uninsured Works

Standard, unamended building contracts often contain minimal insurance provisions, offering little or no protection against professional negligence, leaving you exposed if things go wrong. The risks of professional negligence are real and potentially devastating, as seen in tragic cases like Grenfell Tower.

Your home insurance should be carefully considered to establish if it covers the works, but worse, could also be in jeopardy. Many homeowners are also unaware that their standard buildings insurance policy will almost certainly not cover construction works, and that these need to be insured separately. Failure to notify your insurers or ensure the works are completed in accordance with their requirements could also invalidate your cover.

Your contract, if well drafted, can provide critical protection, allowing you to recover losses arising from negligent or defective works for up to 12 years after completion.

5. Breaching your Leasehold Terms

Leaseholders face heightened risk, as they must comply not only with general legal obligations but also with general legal obligations but also with the specific terms of their lease. Unauthorised works can amount to a breach, exposing the leaseholder to enforcement action or even forfeiture.

Even when works are authorised, problems can arise if the building contract doesn’t require the contractor to comply with the terms of the lease or any licence for alterations. Breach of those terms, however inadvertent, remains the leaseholder’s responsibility. Crucially, you are unlikely to recover losses from the contractor, who is not bound by your lease or licence as they are not a party to that agreement.

Get in touch with our Construction Team

Our specialist Construction Team is experienced in identifying and addressing risks before problems arise. We offer cost-effective, tailored contracts that help safeguard your home and your finances, giving you peace of mind.

Making this small investment now could save you significant time, stress, and expense later – potentially avoiding costly litigation. Get in touch to find out how we can help.

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Issues to Consider When Obtaining Construction Finance

The general concept of ‘real estate finance’ can cover loans to assist a borrower with the acquisition of a property (whether residential or commercial) or refinancing an existing loan secured against the borrower’s property, loans for the borrower’s business purposes that are secured against property that it owns and loans for the development or construction of property.

Legal Steps and Obligations for Borrowing Against an Existing Property

Borrowing against an existing property (that has already been built) will, in broad terms, follow standard(ish) legal steps with which many homeowners are familiar, to provide security to a lender. Generally, there will be some form of loan agreement that imposes on the borrower certain financial obligations (i.e. obligations to pay interest and repay the loan sum that was lent) and property obligations (to take steps to maintain the value of the property throughout the duration of the loan agreement, e.g. by requiring the borrower to keep the property in repair, to insure the property, not to cause or permit damage to be caused to the property etc.) and the borrower will be required to enter into documents to provide security in favour of the lender (usually a first legal charge/mortgage over the property and sometimes guarantees in favour of the lender). Development Finance can differ from these more familiar real estate finance methods and additional legal steps and documents may be required.

How Is Development Finance Different From a Standard Loan Secured Against Property?

‘Development finance’ or ‘construction finance’ involves a lender providing a loan to a borrower for it to develop (i.e. build, extend, renovate or refurbish) a property. It can form part of a loan that is made to also acquire the property that will be developed. The loan is secured against the property (as with other forms of real estate finance) but security will also be given over the developer’s (i.e. the borrower’s) rights under relevant construction documents – e.g. security over rights of the borrower/landowner under the contract with its building contractor to carry out the development and overs its rights under services agreements with other professionals such as the architects and engineers for the construction project – as well as security over the borrower’s rights to proceeds of insurance policies relating to the property and the construction project itself.

Comprehensive Due Diligence Requirements for Lenders In Property Development Projects

A prudent lender will usually insist on a full due diligence review not only of the property which is being provided as security, but also a full review of the planned development and all construction contracts and the contractors themselves before funding is released to the borrower. The lender will want to review:

• the value of the property itself, which will be lower while the construction project is being carried out compared to what its value will be when the development has been completed. On a development project that will involve the sale or lease of units on a development (e.g. building a block of apartments), a lender will want to have a clear picture of (and certain controls in respect of) agreements for leases or sales of units that are in place and will be put in place;
• the experience and skill of the project team (e.g. main building contractor and associated professionals – e.g. architects, structural engineers and other members of the design team) and what levels of professional indemnity insurance they have in place to cover any defects that may arise in their design (and in the case of the main contractor, whether they have sufficient cover to protect against the possible insolvency of any subcontractors or consultants);
• the costs to complete the design, build and sale of the development (which, together with funding costs, should not exceed the value of the completed development) – often a lender will require its own ‘monitoring surveyor’ or ‘quantity surveyor’ to review the budgets or, as a minimum, they will arrange for their own professionals to ‘sense-check’ the costings;
• what rights the lender will have if the borrower/developer is unable to complete the development, such that the lender must ‘step in’ and take over the construction project to get it completed.

Conditions Precedent for Standard Real Estate Loans

Lenders of ‘standard’ real estate loans (that do not involve construction elements) normally impose numerous conditions precedent (known as ‘CP’s) such as requiring satisfactory reviews of the property title documents, insurance, appropriate consents and authorisations and planning permissions etc. These CPs must be satisfied by the borrower before the lender will make any funds available to the borrower.

Conditions Precedent For Construction and Development Loans

The list of CPs for a construction loan/development loan will include all of these ‘usual’ conditions and impose numerous further construction specific conditions, such as requiring sight of signed building contracts, professional appointments, professional indemnity insurance documents and collateral warranties, as well as detailed budgets that have been approved by the lender’s representatives.

It may be that the construction loan will be released in separate tranches when certain phases of the development have been reached, and in that case it may be that there will be CPs that need to be satisfied at each stage of the development process, possibly to be signed off at each stage by the lender’s own monitoring surveyor (who would represent the lender, but whose fees must be paid by the borrower).

It is for these reasons that the various documents required for a development loan will be more detailed and complicated and accordingly they take more time to negotiate and finalise between the parties and their lawyers than would be the case for a loan that does not involve construction elements.

Summary

Development finance or construction finance facilities are complex, and the legal processes can take a long time, involving many legal advisors acting for the borrower, the lender and sometimes for the building contractors as well. At Quastels, we have experienced lawyers in our Finance & Banking, Real Estate and Construction departments who work together as a single team to progress matters for our clients (both borrowers and lenders) as swiftly as possible.

To discuss any of the points raised in this article, please contact Jason Greenberg or fill in the form below.

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