What is a Building Liability Order and why does it matter for social housing providers?

Why were BLOs introduced?

Building Liability Orders (BLOs) were introduced by the Building Safety Act 2022 to address a long‑standing problem in the construction and housing sectors: when serious building defects come to light, the company that carried out the work often no longer exists, or has no financial means to put things right. In those circumstances, the cost of remediation has historically fallen on building owners, landlords and, ultimately, residents.

BLOs form part of the wider programme of reform that followed the Grenfell Tower tragedy and the Hackitt Review. That review highlighted how responsibility for unsafe buildings could be shifted away from those who designed, developed or profited from construction, often through complex corporate structures.

Large developments are frequently delivered through companies set up solely for a single project, with few assets and a limited lifespan. Once the scheme is completed, those entities may be wound down or left dormant. Years later, when defects emerge, there is often no meaningful route to recovery, even though parent companies or wider groups may still be operating and may have benefited financially from the development.

BLOs were introduced to address this gap. They allow responsibility for certain building safety defects to extend beyond the original delivery vehicle, ensuring liability reflects economic reality rather than stopping at a corporate shell, a shift often described as reinforcing a ‘polluter pays’ approach.

What does a BLO actually do?

A BLO allows the court to order that a relevant liability of one company (the ‘original body’) is also treated as the liability of one or more associated companies. Those companies may then be jointly and severally liable for the cost of remediation or related losses.

Key features of BLOs include:

• Liability can be extended across a corporate group, not just the company that signed the original contract.
• The original company does not need to be solvent or even still exist.
• Association is assessed over a defined ‘relevant period’, which can span from the start of construction which related to the relevant liability through to the date the order is made.

This means that liability can attach to parent companies, sister companies or other entities under common control, even if their involvement was indirect.

What counts as a ‘relevant liability’?

The Building Safety Act defines relevant liabilities broadly and they are not limited to fire safety issues alone.

They include:

• Liabilities arising under the Defective Premises Act, where works result in dwellings being unfit for habitation.
• Liabilities arising from breaches of building regulations (under section 38 of the Building Act 1984, once in force).
• Liabilities relating to building safety risks, including risks from fire or structural failure.

For social housing providers, this wider scope is significant. It means that BLOs may apply to a broader range of legacy defects than is sometimes assumed.

Who can be targeted by a BLO?

The court can make a BLO against any body corporate that is associated with the original company. Association is defined by control - whether one company controls another, or both are controlled by a third entity.

Importantly:

• A company only needs to have been associated at any point during the relevant period.
• The fact that a company is no longer in the group does not automatically remove it from the scope.
• BLOs can still be made where the original contractor or developer has entered administration or been dissolved.

This reflects Parliament’s intention that liability should follow the group, not stop with the entity that happened to sit at the end of the contracting chain.

Why are BLOs particularly relevant for social housing now?

For a long time, many providers have assumed that if a developer no longer exists or has no money, recovery isn’t realistic. In many cases, costs are simply absorbed and built into long‑term business plans.

BLOs challenge that assumption.

They don’t guarantee recovery, but they change the starting point. They encourage a wider look at who was involved in a development and where financial strength might still sit today.

As remediation costs continue to rise and funding remains under pressure, that shift matters. BLOs are increasingly being thought of not just as a legal tool, but as part of a broader strategy for understanding risk, responsibility and options.

Get in touch

If you would like to explore how Building Liability Orders may affect your organisation, or to discuss potential risk, recovery or strategy, please get in touch.

Contact us