Part 5: Other provisions about safety standards, etc. Remediation of Certain defects Section 121 – Associated persons Proposed use of power
The power at section 121(12) will allow modifications to be made to subsections (3) to (5) in respect of the application of those subsections to the application of the associated persons tests in sections 122 to 125 and Schedule 8. This is because a slightly different definition of associated persons may be appropriate to the circumstances in which the test is used.
Example
A body corporate A shares all of its directors with a body corporate B. It could be argued that A is able to ensure that B acts how A wishes B to conduct its affairs.
B controls 100% of the voting rights exercisable in the general meetings of body corporate C.
C is a member of a limited liability partnership of which bodies corporate D and E are also members.
D controls the majority of the voting rights in the limited liability partnership.
Due to these connections and subsection (6), A, B, C, D and E are associated under section 121.
If B is the freeholder of a building for which A was the developer, then B is classed as being associated with the developer. For the purposes of paragraph 2 of Schedule 8, this means that B is responsible for any initial defects contained within the building.
If a relevant building contains relevant defects, and any of A, B, C, D or E had an interest in the building, then the First-tier Tribunal could require A, B, C, D and E to make payments in respect of remediating the relevant defects through a remediation contribution order under section 124