Landlord held liable for repairs to historic building: Almacantar Centre Point v de Valk [2025] UKUT 298

Background

This case concerns not the iconic Henry Hyams tower, but its more discreet sibling, a smaller former office block of six storeys known as Centre Point House ("CPH").  CPH is connected to Centre Point Tower by a linked building that is used as commercial/restaurant space. Both were built in the early 1960s. At some time in the 1980s, CPH was converted into twenty six flats. At the date of the application to the First Tier Tribunal ("FTT") in 2024, the freeholder of CPH (the "Landlord") owned ten of the flats. A further three were not part of the application, and this left thirteen leaseholders who were the respondents (the "Leaseholders"). 

The building is therefore elderly. There had long been a concern with the integrity of the fenestration. Over the past twenty five years, several panes of glass have popped out of their frames and fallen to the ground. The Landlord had commissioned reports on how to repair the building envelope and had discussed many different courses of action with the Leaseholders. However, there seems to have been little trust on the Leaseholders' side, and no agreement had been reached.

Expert evidence at the FTT, at first instance, which was accepted, stated that CPH was found to have serious defects in its façade dating back to its original 1960s design and construction. The external envelope consisted of a timber ladder-frame system with glass, insulation and spandrel panels and was fixed with aluminium rods to the concrete frame of the core. It was accepted by the FTT that this system was non-loadbearing “cladding” and that it was unsafe, presenting a fire spread risk.

In 2023, the Landlord had issued an application under section 27A(3) of the Landlord and Tenant Act 1985 for a declaration that the Leaseholders were liable through the service charge provisions for the costs of the repairs to the façade, amounting to over £6m. At first instance, before the FTT, the Landlord had lost. It therefore appealed to the Upper Tribunal

The impact of Schedule 8 of the Building Safety Act 2022 ("BSA")

Section 122 and Schedule 8 of the Building Safety Act 2022 (the "Act") contain protections for qualifying tenants against the costs of remediation of relevant defects – as set out in section 120(2) of the Act – and impose liabilities on certain landlords to pay the costs of the remediation. The clear legislative aim is to ensure that any given developer should pay for dangerous cladding it had installed

However, paragraph 2 of Schedule 8 of the Act could not help the Leaseholders of CPH, as neither the current landlord nor any associate was responsible for the qualifying defects. The disrepair had come about either through age or the innovative 1960s construction methods. 

The only way for the Leaseholders to escape their obligation to pay for the remediation works through their service charges was under paragraph 8 of Schedule 8 of the Act. The wording is simply and directly drafted and says:

"8(1)  No service charge is payable under a qualifying lease in respect of cladding remediation.

(2)    In this paragraph “cladding remediation” means the removal or replacement of any part of a cladding system that—

(a)    forms the outer wall of an external wall system, and

(b)    is unsafe."

It was a late amendment by the Lords in the progress of the Bill through Parliament, and was not even discussed on its return to the Commons. 

Course of the litigation

The Landlord lost on all points in front of the FTT. The more natural construction of paragraph 8 was accepted and the ingenious arguments of the Landlord's counsel were rejected. The Landlord pursued the same arguments in front of the Upper Tribunal. 

The Landlord’s argument

The Landlord argued firstly that Schedule 8 of the Act must be read in line with the rest of the Act, so that the seemingly clear and expansive scope of Paragraph 8 should be limited by reading in the concepts of “relevant works” and “relevant defects”.

Further, it contended that the intention was only to protect leaseholders from unsafe cladding in post - 1992 buildings, whilst landlords were to remain able to recover their costs of remediating older properties. 

It is difficult not to have some sympathy with this position. The legislation had been aimed at specific practices in the construction industry since the nineties, and was not directly concerned with other, older buildings that might have become unsafe because of wear and tear. In these sorts of situations, the obligations should fall as they had always done according to the contract between the parties. 

The Leaseholders' argument

The Leaseholders, both at the FTT and before the Upper Tribunal, maintained that para 8 of Schedule 8 of the Act is deliberately different and distinct from paragraph 2 and the hierarchy of liabilities in the following paragraphs. It is clearly worded, and reflects Parliament’s purpose to shield leaseholders from defective cladding costs.

The words of then Housing Minister Michael Gove were quoted both before the FTT and at the Upper Tribunal with approbation: 

"no leaseholder living in their own flat 'would pay a penny to fix dangerous cladding.'" 

They further submitted that whilst the Act was a radical legislative response to the Grenfell Tower tragedy, it sought to correct the consequences of the cavalier attitude towards fire safety that developers had shown, and regulators had failed to pick up. In other words, what mattered was the safety of the leaseholders in a building, and not the unprecedented displacement of historic liabilities.

Whereas it could be considered fair that many developers were required by the government through the Act to remediate their workmanship , it seems an extreme reaction to impose a hefty liability on a landlord wholly innocent of any wrongdoing especially in regard to a building that was over sixty years old. 

The judgment

Given the purposive approach we have seen the judiciary adopting to the construction of Schedule 8 of the Act - Lant Street [2024] UKUT 135 (LC)) for example - it is unsurprising that the Upper Tribunal followed the FTT in the preferred the construction of paragraph 8 as freestanding; nothing should be read into it to fetter its effect. The drafting is straightforward on its surface, and the Landlord's submissions required implying into paragraph 8 a level of complexity that proved unattractive to the court. 

The Landlord further contended that the envelope on CPH was not "cladding", but that too was rejected by the Upper Tribunal

Conclusion

We expect that the case will appeal. Perhaps this time, the Landlord will seek to introduce a new ground under the Human Rights Act 1998, as the paragraph could be seen as exproprietary and unfair. Whether this would meet with any more success, in the current climate, remains to be seen.