Building safety – Leaseholder protection – Qualifying lease – Contribution condition – Appellant holding lease of flat in block – Respondent landlord issuing appellant with demand for service charge contribution towards cost of insulation and fire stopping works – Whether appellant entitled to protection from liability to pay contribution under schedule 8 of Building Safety Act 2022 – Whether works constituting cladding remediation – Appeal allowed
The appellant owned the lease of flat 44 in block A, 4 Sanctuary Street, London SE1. Following the Grenfell Tower fire in June 2017 the safety of all modern high-rise buildings came under scrutiny. In February 2018, a fire risk assessment report assessed the block’s fire risk as low, but in October 2019, the cladding and balconies were inspected by a specialist contractor which recommended the replacement of the insulation behind the vertical cladding panels on the exterior of the block and the addition of vertical cavity barriers between each flat.
The respondent was the appellant’s immediate landlord and was responsible for commissioning the works and was entitled to collect any service charges due.
An issue arose concerning the appellant’s liability, as leaseholder, to contribute towards the cost of removing and replacing combustible insulation and installing additional fire stopping in the cavities between the interior and exterior surfaces of the walls of certain parts of the building.
The appellant applied to the First-tier Tribunal for a determination under section 27A of the Landlord and Tenant Act 1985, of his liability to contribute towards the costs of the proposed works. The FTT determined that the appellant was liable to pay £1,244.85 demanded as a service charge contribution towards the cost of the insulation and fire-stopping work intended to be undertaken to the walls of the building. The appellant appealed.
Held: The appeal was allowed.
(1) The service charge demanded was not payable by the appellant and would not be payable even if a proper demand was made for it in future. The demand failed to state the name and address of the landlord so that section 47 of the Landlord and Tenant Act 1987 meant that the amount demanded was not due.
(2) Section 122 of, and schedule 8 to, the Building Safety Act 2022 were designed to protect leaseholders under “qualifying leases” from liability to pay some or all of the service charges which would otherwise be due as their contribution towards costs connected with “relevant defects”. All leaseholders were protected from liability to contribute towards the cost of “relevant measures” if their landlord was “responsible for” the relevant defect. Where the landlord satisfied a contribution condition, qualifying leaseholders were protected from all liability to contribute towards the cost of relevant measures. Where the contribution condition was not satisfied, the qualifying leaseholder’s liability was limited to a permitted maximum. Qualifying leaseholders were also protected from any liability to contribute towards “cladding remediation” costs, and in respect of the cost of certain legal or other professional services.
(3) In the present case, the property was a relevant building within section 117 of the 2022 Act. It was self-contained, contained at least two dwellings, and was both at least 11 metres high and had at least five storeys above ground level.
The disputed service charge was claimed in respect of the works found by the FTT to comprise the removal of the cladding and insulation, the replacement of the insulation with material meeting current standards, and the reinstatement of the cladding using the original panels. All those works were completed within the period of 30 years ending on 14 February 2022 and they were therefore relevant works within the meaning of section 120(3)(a) of the 2022 Act.
The absence of cavity barriers in the original construction, combined with insulation of the type originally employed, gave rise to an unacceptable building safety risk, namely the risk to the safety of people from the spread of fire. The defects to which the disputed service charges related were therefore relevant defects, as defined in section 120 of the 2022 Act.
The purpose of the works was to remedy the relevant defects, and the works were therefore relevant measures for the purpose of schedule 8.
(4) By paragraph 8 of schedule 8, no service charge was payable under a qualifying lease in respect of “cladding remediation” which meant the removal or replacement of any part of a cladding system that formed the outer wall of an external wall system and was unsafe. If so, the service charge was not payable in respect of the removal or replacement works.
The 2022 Act contained no definition of a “cladding system” but it was clearly not intended to be limited simply to a single building component such as the final layer of cladding panels visible on the facade of a building. Any “system” had a number of components, each within the scope of paragraph 8(2): cladding remediation comprised the removal of replacement of “any part of a cladding system”.
The cladding system had to form the “outer wall” of the external wall system. If an external wall comprised an outer wall and an inner wall, with a cavity between them, only a cladding system which formed the outer wall would be covered by paragraph 8.
(5) The work done to the block comprised the removal of the original two sheets of insulation and their replacement with a new single sheet of a different material with improved fire-resistant properties. That part of the work involved the removal and replacement of part of the cladding system. The work also included the installation of cavity barriers where they had previously been omitted. Therefore, the whole of the work done to the block comprised the removal or replacement of part of a cladding system.
There was no doubt that the cladding system as a whole was “unsafe” in the sense that it failed to meet the standards required to comply with Government’s Advice for Building Owners of Multi-storey Multi-occupied Residential Buildings issued in January 2020. It lacked adequate cavity barriers and, without them, the increased risk of a fire spreading meant that the form of insulation which had been employed in the cladding system was inadequate and failed to meet the appropriate safety standard.
(6) The FTT was wrong to conclude that the works were not covered by the paragraph 8 protection. The entire works were cladding remediation and no service charge was payable in respect of those works by the appellant or any other qualifying leaseholder.
Further, the work in respect of which the demand was made was “cladding remediation” and, as the owner of a qualifying lease, the appellant had the benefit of the paragraph 8 protection and was not liable to pay such a charge. Accordingly, no service charge was payable by the appellant in respect of the works.
The appellant appeared by his representative; Ashley Pratt (instructed by Rradar Solicitors) appeared for the respondent.
Eileen O’Grady, barrister
Click here to read a transcript of Lehner v Lant Street Management Co Ltd
