Recent developments in RCOs and BLOs

By Nia Stewart

19 May 2026 4 min read

Close up of coloured window panels from student accommodation in England

Who pays for building safety? The courts are making that increasingly clear

When a residential block (and in certain circumstances commercial premises) turns out to have unsafe cladding or structural defects, the question that follows is always the same: who picks up the bill? A wave of recent decisions in England and Wales is now answering that question with growing consistency – and the answer, overwhelmingly, is developers and their corporate associates.

The Building Safety Act 2022 (“BSA”) equips tribunals and courts with two key mechanisms for allocating responsibility for building safety defects: Remediation Contribution Orders (“RCOs”) and Building Liability Orders (“BLOs”). RCOs made by the First-tier Tribunal under section 124 BSA, require developers, landlords or associated entities to fund the remediation of relevant defects where it is “just and equitable” to do so. BLOs, granted by the High Court under section 130, go further: they extend a company’s existing building-safety liabilities to associated companies within the same corporate group, making them jointly and severally liable. Together, these remedies establish a clear liability hierarchy – developers and associates first, leaseholders and public funding (via the Cladding Safety Scheme) last.

That hierarchy has now been tested (and upheld) at every level. In Triathlon Homes v Stratford Village Development Partnership, the Court of Appeal confirmed that RCOs can reach back to cover costs already incurred before the Act’s remediation provisions came into force, and that the availability of Building Safety Fund grants does not let developers off the hook – public money is interim finance, not a substitute for developer liability. The Upper Tribunal reinforced the point in Grey GR Ltd Partnership v Edgewater (Stevenage) Ltd (the Vista Tower case), holding that RCOs can impose joint and several liability across multiple respondents and taking a deliberately broad view of corporate “association” – looking beyond common directorships to the practical reality of interconnected group structures. On the BLO side, 381 Southwark Park Road RTM Co Ltd v Click St Andrews Ltd saw the High Court extend a thinly capitalised SPV’s building-safety liabilities to its parent, though it cautioned that BLOs track only “relevant liabilities” and are not a gateway to unrelated losses.

The message from the courts is clear: developers cannot hide behind innovative corporate structures; the courts will protect leaseholders from developer/landlord insolvency – someone must pay; and public funds should flow only as a backstop, to be recouped when other legal remedies exist.

What this means in practice

For developers

The implications are significant. Joint and several BLOs mean that liability can follow the group, not just the project SPV, even where a vehicle has been sold, wound down or is effectively empty. Due diligence on legacy exposure, supply-chain recourse, insurance and group structuring is now essential.

For building managers and freeholders

The case law opens clearer recovery routes – but with that comes an expectation (often embedded in grant conditions) to pursue RCO applications proactively, backed by robust evidential records of defects, costs and corporate association.

For tenants and leaseholders

The trajectory is positive: stronger protection from service charges and faster access to remediation funding, though some uncertainty remains as appeals on retrospectivity and joint liability work through the system.

For government and public bodies

The courts’ characterisation of the Building Safety Fund (now the Cladding Safety Scheme) as temporary aligns with a policy of recouping costs from those connected to the building. The priority now is to tighten grant conditions and align enforcement with the Building Safety Regulator’s oversight of high-risk stock.

Navigating what comes next for those operating in the Built Environment

In a sector already managing thin margins, evolving regulation and heightened scrutiny, these developments add real operational and financial pressure. Burges Salmon’s Construction and Engineering team, working alongside our Real Estate, Disputes, Corporate, Regulatory and Public Law specialists, advises across this landscape – from RCO/BLO strategy and evidence preparation to grant structures, supply-chain resource and transactional risk on live and legacy projects.

The bottom line is straightforward: SPV structures will not shield group assets where association is shown, and public funds will expect reimbursement where legal remedies exist. Stakeholders who assess their exposure and recovery pathways early will be best placed as the courts continue to sharpen these tools.

This article was written by Nia Stewart and James Hancock.