A landmark tribunal case provides the first binding ruling on how to apportion remediation costs under the Building Safety Act between commercial and residential leaseholders in a mixed-use block.. Case Study: FTT Sets Precedent for BSA Remediation Costs in Mixed Use Schemes The First tier Tribunal (Property Chamber) has, in a late 2026 ruling, handed down a pivotal decision regarding the apportionment of remediation costs under the Building Safety Act 2022 (BSA 2022) within a mixed use development. This landmark judgment offers much needed clarity for landlords, leaseholders, and building safety professionals grappling with the complexities of multi tenure buildings. Prior to this, the mechanism for fairly distributing significant remediation expenses between commercial and residential elements of a single structure under the BSA 2022 remained largely uncharted territory in formal legal precedent. The case specifically addressed a high rise building with ground floor retail units, office space on intermediate levels, and residential dwellings occupying the upper floors, each subject to varying leasehold agreements and responsibilities. The FTT's detailed reasoning provides a framework that is likely to influence future interpretations and negotiations concerning Section 124 of the BSA 2022, which empowers the tribunal to make orders relating to remediation contribution orders. The Challenge of Mixed Use Allocations Under BSA 2022 The Building Safety Act 2022 introduced stringent requirements for the remediation of historical building safety defects, particularly those involving fire safety. While the Act provides protections for qualifying residential leaseholders, the interaction of these protections with commercial interests in a mixed use scenario has presented a significant interpretive challenge. The "owner pays" principle, fundamental to the BSA 2022, is simpler to apply in purely residential blocks. However, in mixed use schemes, the question of how to apportion costs equitably, acknowledging different leasehold terms, service charge liabilities, and the potential for different fire risk profiles across various occupancies, has been a contentious issue. The FTT's deliberation in this instance meticulously examined the specific wording of leases, the nature of the identified defects, and the relative benefits derived by different classes of leaseholder from the proposed remediation works. Fire Safety Regulations and the Interplay with BSA Costs The remediation works under consideration in the FTT case were largely driven by failures to comply with modern fire safety standards, echoing the requirements of the Regulatory Reform (Fire Safety) Order 2005 (RRO 2005) and the Fire Safety (England) Regulations 2022 (FS(E)R 2022). These regulations place significant duties on the Responsible Person(s) to ensure the safety of relevant premises. The FTT noted that the identified defects, such as non compliant external wall systems (EWS) and inadequate compartmentation, posed a risk to all occupants, irrespective of their lease type. The tribunal's decision therefore had to reconcile the "building safety risk" as defined by the BSA 2022 with the scope of fire safety deficiencies as assessed under the RRO 2005 and industry guidance like PAS 9980:2022, which provides a methodology for fire risk appraisals of external walls. Key Determinants in the FTT's Apportionment Formula The FTT's rationale for cost allocation was multifaceted, considering several key factors: Beneficiary Principle: The extent to which each part of the building (residential, commercial, office) directly benefited from the remediation work. Leasehold Terms: The specific clauses within each lease relating to service charges, maintenance, and capital expenditure, and how these aligned with the nature of the remediation. Fire Risk Exposure: The FTT considered the relative fire risk presented to different parts of the building by the identified defects, acknowledging that a compromised EWS affects the entire building envelope. Financial Capacity and Ownership: While not a primary determinant for statutory apportionment, the tribunal considered the landlord's overall financial responsibilities and the potential for cost recovery from original developers or contractors where applicable. The tribunal ultimately favoured an apportionment model that reflected a combination of floor area and a weighted factor accounting for statutory protections afforded to residential leaseholders under the BSA 2022. Implications for Responsible Persons and Accountable Persons This ruling has significant implications for Responsible Persons (under RRO 2005) and Accountable Persons (under BSA 2022) in mixed use buildings. It underscores the importance of a thorough understanding of their duties and the potential financial liabilities associated with non compliance. Accountable Persons, in particular, must now meticulously review the leasehold structures of their building