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Introduction
The Upper Tribunal has handed down its decision in Almacantar Centre Point Nominee No.1 Ltd & Ors v Penelope de Valk & Ors [2025] UKUT 298 (LC).
This is an important case on the meaning of “cladding remediation” under the Building Safety Act 2022 (“BSA”). Most significantly, the UT confirmed the FTT’s finding that “cladding remediation” in paragraph 8 of schedule 8 is not limited to works that also amount to a “relevant measure relating to a relevant defect”.
The case is of particular importance as the provisions in issue in this case have not previously been directly considered by an appellate court.
Background
The appeal concerns whether the cost of proposed major works (‘the Proposed Scheme’) to the façade of Centre Point House would be recoverable by way of service charge under the respondent leaseholders’ leases.
At first instance, the FTT held that the façade at Centre Point House comprises an unsafe cladding system to which paragraph 8 of Schedule 8 to the BSA applies; further, that the presumption in paragraph 13(2) of Schedule 8 applied in favour of the respondents such that their leases are deemed qualifying leases; and therefore, no service charge would be payable by the respondents in respect of the Proposed Scheme.
Grounds of Appeal
The appeal was heard over 3 days in July 2025. The Appellants advanced the following grounds:
The FTT gave the Appellant permission on grounds 1-4 and the UT granted permission on ground 1A following an abortive prior hearing. The Appellant also sought permission to appeal on a further ground (Ground 5) (discussed below) on a rolled-up basis at the July hearing.
The UT’s Decision
Ground 1A – Is “cladding remediation” confined to remedying a “relevant defect”?
Schedule 8 of the BSA contains protections for leaseholders from paying certain costs of remediating buildings as part of their service charge. Paragraphs 2, 3 and 4 of Schedule 8 prevent the costs of “relevant measures” in respect of “relevant defects” from being charged to tenants in certain circumstances.
Paragraph 8 of schedule 8 provides:
(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”.
The issue in Ground 1A concerned whether paragraph 8 of schedule 8 applies to defective cladding which is not also a “relevant defect”. By s.120, a “relevant defect” is a defect that causes a “building safety risk” as a result of “relevant works”. By s.120(3) relevant works are time limited to works carried out within the “relevant period” being the 30 years prior to 28 June 2022, as well as works carried out after that date to remedy relevant works. As the defects to the façade of Centre Point House originated in its original design and construction between 1963 and 1966, the works involved in the Proposed Scheme are not “relevant measures” to remedy “relevant defects”.
The Appellants argued that the fact that the Proposed Scheme was not “relevant measures” in respect of “relevant defects” meant that the BSA was not engaged. They said that the FTT was wrong to find that cladding remediation was to be treated as a distinct protection outside the waterfall of protections in schedule 8, not contingent on the existence of a relevant defect and that the cladding in question need not have been installed in the “relevant period”.
However, the UT held that paragraph 8 is not limited by reference to “relevant defect” and no qualification is to be imported to that effect. The words of paragraph 8 were held to be “clear and unambiguous, and accord with the underlying policy of the Act and reflect the clear ministerial statement that “no leasehold living in their own flat ‘would pay a penny to fix dangerous cladding’””. Accordingly, Ground 1A was dismissed.
Grounds 1 – 4 – Cladding and Cladding System
Grounds 1-4 relate primarily to whether as a matter of fact there is “cladding” at Centre Point House which could form part of a “cladding system” for the purposes of paragraph 8 of schedule 8 and whether it was “unsafe”.
No definition of “cladding” is given in the BSA. However, having heard expert evidence over several days during the trial before the FTT, the FTT concluded that there was cladding at Centre Point House. The UT found that there was no justification to depart from the FTT’s findings.
As to whether there was a “cladding system”, the UT rejected the Appellant’s argument that “cladding system” required two systems: the cladding system and the external wall system. The UT adopted the analysis in Lant Street at paragraph 144 as follows:
“The other requirement of paragraph 8 is that the cladding system must form the “outer wall” of the external wall system. Paragraph 8 is not concerned with a cladding system which forms the inner wall of an 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.”
The UT accepted the respondents’ submission that that there was no justification for limiting paragraph 8 to structures with two separate systems and that the clear words in paragraph 8 did not require two separate systems.
The UT also rejected the Appellant’s argument that “unsafe” should be narrowly construed to mean “posing a fire risk”. Again, it found that that words used are clear and unambiguous and not limited to fire risk. It held that the FTT was correct to find that the cladding at Centre Point House was unsafe in circumstances where the deteriorated condition of the façade means that there is a risk that windows (or worse) may became detached and fall out.
Ground 5 – Presumption as to “qualifying lease”
The final ground of appeal concerned the presumption in paragraph 13 of Schedule 8, which provides that a lease, which meets the conditions of paragraphs (a) to (c) of section 119(2) of the BSA, is to be treated as a qualifying lease unless: (a) the landlord under the lease has taken all reasonable steps (and any prescribed steps) to obtain a qualifying lease certificate from a tenant under the lease, and (b) no such certificate has been provided to the landlord.
As the time of the trial before the FTT, the Appellant had not taken steps to obtain a qualifying lease certificate and the found FTT found that the presumption applied to a number of the leases of the tenants at Centre Point House.
The Appellant argued that the FTT was wrong to conclude that the effect of the presumption was that no service charge was recoverable from those leaseholders because, it said, the FTT had appeared to have made a unqualified finding of fact as to which tenants held a qualifying lease.
The UT dismissed ground 5 on the basis that the FTT did not make any determination on evidence and was simply applying the presumption. The UT further held that it would be inappropriate for it to decide whether or not the finding of the FTT was binding or whether it may be rebutted.
Simon Allison KC (representing Respondent 13) and Justin Bates KC and Mattie Green (representing Respondents 1 – 10) represented the successful respondents.
