Govt v Urban Splash £48m lawsuit begins
The Ministry of Housing, Communities, and Local Government has taken the developer to court in an effort to recoup public money spent on building safety improvements in Manchester.
The court case centres on seven buildings: Burton Place, the Chips Building, Moho Building, The Box Works, and the Three Towers – Emmeline House, Cristabel, and Sylvia.
The government argued on Monday that Urban Splash should have undertaken a series of remediation actions on seven Manchester buildings itself. Urban Splash has maintained that it was unable to do so because of financial reasons.
Instead, the work was supported by the publicly financed Building Safety Fund and overseen by the government rather than the developer.
In the lawsuit, the government is retroactively seeking the money spent on the buildings, which totals £48m.
An MHCLG spokesperson said: “This case forms part of the government’s efforts to recover taxpayer funds spent on remediating unsafe buildings from those responsible.”
Urban Splash has argued that it was a responsible developer who worked within the existing Building Regulations regime at the time of each of the buildings’ construction programme.
What is more, the developer has contended, the £48m bill represented more work done than was necessary and was much higher than it would have been should Urban Splash have led the project.
“The government’s approach to recovering its costs of implementing those improvements, in this case, is neither fair nor proportionate and if successful, will lead to SME developers funding much higher remediation costs than major developers after taxpayer money has been wasted through uncontrolled spending,” an Urban Splash spokesperson said.
Burton Place was highlighted as a prime example of this. The government spent £23m on remediating the seven-storey, 90-apartment building. Some of the money was used to decant residents, which Urban Splash argued in court documents would not have been necessary if the government had explored an encapsulation solution.
“The remediation at Burton Place is, on any basis, a ‘Rolls Royce’ solution to a problem, the scope of which was not adequately recorded at the time and remains to be established,” the developer argued in court documents, noting that the £23m spent exceeds the market value of the apartments.
Here is how much was spent on the buildings at the heart of the lawsuit:
- Burton Place – £23m
- Chips Building in New Islington – £3.2m
- Christabel at Three Towers on Dalton Street – £1.5m
- Emmeline House on Dalton Street – £2m
- Moho Building on Ellesmere Street – £15.9m
- Sylvia on Dalton Street – £585,900
- The Box Works on Worsley Street – £1.9m
The government’s case hinges on Section 124 of the Building Safety Act, which gives the secretary of state the power to recoup public money spent on fixing buildings with fire safety issues.
Urban Splash is not the only developer being held to account. MHCLG is also seeking to recoup money spent on projects developed by Hollybrook Homes and Yianis Holdings. In total, the buildings involved in these cases represented more than 1,000 homes.
