Landlords in the line of fire over cladding

A High Court ruling says landlords are responsible for removing dangerous cladding.

Following a recent High Court ruling, every building owner must understand that if their buildings have a certain type of exterior cladding, they are responsible for its removal. 

The ruling was handed down on 5 June 2026 by High Court judge Stephen Davies. It reinforces something that landlords and building owners have been dragging their feet over ever since the Grenfell Tower disaster in June 2017, 9 years ago almost to the day.

The rule says that if a building has dangerous cladding, the owner is directly responsible for removing it, regardless of who installed it in the first place, and regardless of whether the cladding panels show any visible signs of damage or deterioration.

This ruling changes everything 

In Essendi UK Hotels 2 Limited v London Property Company (LPC) Limited [2026], a case which concerned the Ibis Wembley hotel, his honour Judge Stephen Davies found that the building’s owner, London Property Company Limited (LPC), had breached its lease obligations.

By failing to address the risk posed by aluminium composite material (ACM), cladding with a polyethylene (PE) core, risk experts on both sides agreed it presented, in the court’s phrase, an “intolerable risk” of fire. The owner company was found to be in serious breach.

The court ordered LPC to remove the cladding within six months and complete replacement works within 18 months of the judgment.

The immediate reaction of many landlords reading this may be that cladding on a hotel will not affect them. That’s not true, it does. The legal principle this ruling establishes is, it will extend well beyond the hospitality sector. Any building with ACM or other high-risk cladding is vulnerable.

What exactly is ACM?

ACM or Aluminium Composite Material is a lightweight, rigid cladding material consisting of two thin aluminium sheets bonded to a non-aluminium filler core. 

Because of its flexibility, weather resistance, and affordability, it was widely used for building cladding material for many years.

The core material made of Polyethylene (PE) is a pure plastic which is highly flammable and it became notorious with its involvement in the Grenfell Tower fire, as it allowed flames to spread rapidly up the building's exterior.

Architects and builders favoured the ACM material for decades because it was cheap, significantly lighter than solid aluminium, it’s easy to shape, and provides excellent flatness with a modern looking design aesthetic.

Following the Grenfell Tower tragedy, however, the UK building fire regulations have been significantly tightened. The installation of ACM cladding with a combustible (PE) core is strictly prohibited on high-rise buildings. There are many existing buildings already fitted with the material, that have been mandated to have it removed.

The cladding scandal – what are the issues involved?

The UK cladding scandal refers to the discovery after the event that the use of flammable cladding materials on many buildings throughout the country was widespread. This has left hundreds of thousands of residential leaseholders in high rise buildings trapped in unsellable homes, with the prospect of massive remediation liabilities, bills and exorbitant insurance costs that many residents are ill equipped to deal with.

Detailed investigations have revealed that many buildings used the Aluminum Composite Material as well as some with High-Pressure Laminate (HPL) another material that has been condemned as presenting a fire risk.

But, it’s not just the cladding. Many high-rise blocks suffer from "hidden" construction defects, sloppy workmanship hidden behind the cladding. These include missing internal fire barriers, defective wall cavities, faulty compartmentation, and unsafe wooden balconies. It means that many cladded and non-cladded high-rise buildings are also dangerous.

Had the investigations not been carried out, these unscrupulous building industry practices leading to high risks would never have come to light. They are the result of "systemic dishonesty" among some manufacturers and developers/builders. 

The results of fire-testing processes were manipulated with false data, supplied to developers and builders when manufacturers aggressively marketed their products, products that alarmingly did not meet safety standards.

Who pays for the remediation?

This is the big issue. This court ruling clearly places the financial burden, at least in the first instance, on the building owner. They may be able to claim some or all the cost of replacing the panels from the developer who in turn may claim off the manufacturer of the panels, if they have been mis-sold. If there are other defects found when the panels are removed, this could be down to the developer/builder to pick up the bill

What’s more, millions of leaseholders (who typically own the flats but not the building structure) have faced ruinous bills through service charges ranging from tens to hundreds of thousands of pounds to fix defects they were not aware of when they bought. 

In order to sell, buy, or remortgage a flat, mortgage lenders now require an EWS1 (External Wall System) form. This is a standardised document created by the Royal Institution of Chartered Surveyors (RICS) and UK Finance which certifies that a residential building's external cladding and wall systems have been assessed for fire safety by a qualified professional.

Because of a massive backlog and shortage of qualified fire engineers, many leaseholders have been unable to obtain these forms, effectively rendering their properties unsalable. 

In the meantime, for those leaseholders affected, spiralling Insurance and “waking watch” costs are crippling them. Many buildings are deemed so unsafe that insurance premiums have skyrocketed and freeholders have also had to employ 24/7 fire wardens ("waking watches"), passing on the cost to the residents. 

The remediation work, even though the UK government has committed billions in funding to fix high-rise blocks, has progressed at a smails pace, leaving many residents living in unsafe housing conditions for years.

What happened in the London Property Company case?

The Ibis Wembley hotel was fitted with ACM cladding which had a flammable polyethylene core in 2005. This was the same type of material that contributed to the rapid spread of fire at Grenfell Tower in June 2017. 

Testing carried out post the Grenfell fire classified this material as “Category 3” with ACM formally defined as “highly combustible.” It’s a material that burns intensely once ignited.

When the court proceedings were issued, fire safety experts instructed by both sides agreed that the cladding needed urgent remediation. Despite that finding, the landlord, LPC, a company registered in the Isle of Man, never acted. 

The tenant, Essendi (formerly Accor UK Economy Hotels), eventually closed the hotel in July 2025 and the court found that this closure was due entirely to LPC’s failure to carry out the necessary works.

The judgment found LPC in breach of two distinct lease obligations: first, a covenant requiring the landlord to keep the building in “good and substantial repair and condition”; and second, a “legal obligations” covenant that effectively incorporated the landlord’s duties under the Regulatory Reform (Fire Safety) Order 2005 (the FSO). Both are common features of commercial leases. That is precisely why this judgment matters.

You can see the full judgment here. The most significant aspect that came out of the ruling for landlords is the court’s interpretation of what “good condition” actually means. 

Normally, repairing covenants are understood to become effective when there is physical deterioration of the building. A leaking roof, crumbling stonework, failed window frames, but this judgment moves beyond that.

The judge, HHJ Stephen Davies states that a landlord or tenant’s obligation to maintain a building, usually defined as in “good and substantial repair and condition” is not confined to visible deterioration. 

Where a defect renders a building unsafe or incapable of lawful use, the obligation to remediate arises regardless of whether the defect is an obvious case of damage or deterioration. The cladding panels may look like new but that makes no difference if they present a risk. 

In the UK the fire safety order refers to premises governed by the Regulatory Reform (Fire Safety) Order 2005. The FSO sets the primary fire safety laws for England and Wales. It applies to practically all non-domestic buildings (like offices and shops) plus the shared common areas of multi-occupied residential buildings such as blocks of flats.

The Order is enforced through criminal prosecution by the relevant fire authority. However, when a lease contains a broadly drafted “legal obligations” covenant requiring the landlord to comply with all applicable legislation, the FSO can be linked to the lease, effectively becoming a contractual duty. 

The court confirmed that cladding with a PE core constitutes a “dangerous substance” under the fire order, therefore requiring the “responsible person” (usually the landlord) to eliminate or reduce the risk. 

The London Property Company had sought to defend itself partly on the grounds that its tenant Essendi had originally commissioned the cladding work in 2005 and had given certain indemnities under an earlier lease. 

But the court rejected this argument. The judge noted that the industry-wide recognition of the dangers posed by PE-core ACM panels after 2017 was publicly and professionally accepted and therefore the landlord could not shelter behind the history of who first specified the material in the building.

Important legislation 

The FSO applies to all non-domestic premises and to the common parts of residential buildings. It places obligations on the “responsible person” which in most cases is the employer, the occupier, or the owner. They must carry out a fire risk assessment, keep it under review, and take appropriate measures to address identified risks. Where dangerous substances are involved, the Order requires the risk to be eliminated or, where that is not practicable, reduced and controlled.

For landlords of commercial premises or mixed-use buildings, the FSO is a real live obligation. The London Property Company case confirms that fire-risk cladding falls squarely within its scope.

The Building Safety Act 2022 (BSA) introduced a new higher-risk building (HRB) regime for residential buildings over 18 metres in height or at least seven storeys. 

Such buildings must be registered with the Building Safety Regulator (BSR). Their owners face ongoing obligations. In the Wembley hotel case, as it is commercial building providing sleeping accommodation rather than residential dwellings, this does not fall within the HRB regime under the BSA. 

However, the court still found its owner had a remediation obligation. This demonstrates that the FSO alone, operating through a lease’s legal obligations clause, is sufficient to require action.

For residential landlords, the BSA adds another layer of protection for the leaseholders. Schedule 8 of this Act prevents qualifying leaseholders in relevant buildings (those over 11 metres or five storeys) from being charged for cladding remediation costs through the service charge. 

Those costs will fall to freeholders and, in some circumstances, to developers who constructed or materially altered the building, after 1992. Generally speaking, ownership of the building means ownership of the liability. There is no mechanism for passing these costs on to leaseholders when the statutory protections apply.

For landlords who own a share of the freehold in a residential block, who let out commercial premises, or who simply own a building with an external facade they have not inspected since 2017, this judgment is a reminder they need to act. 

Ownership of a building carries responsibility. The courts are now making it very clear that in the context of fire-risk cladding, that responsibility cannot be delayed or delegated to someone else.

[Main image credit: Anton Klyuchnilkov]