Expert Witness Journal Issue 68 August 2026 - Flipbook - Page 55
Although the fact matrix of this case was unusual,
it will be of interest to landlords and leaseholders of
commercial buildings which fall outside the scope
of the Building Safety Act 2022 (BSA), including
hotels, with 昀椀re safety or cladding defects. Given
the potential impact of this decision, readers should
watch out for any sign of an appeal to the Court of
Appeal.
under the BSA). It advanced three grounds of
claim:
Building safety, hotels and the limits of
the Building Safety Act
1.
breach of the landlord’s “good condition”
covenant;
2.
breach of the landlord’s “legal obligations”
covenant, in conjunction with its obligations
under the FSO (as to which see further
below),and;
3.
derogation from grant (which was rejected).
As the judge explained in this case, hotels do not fall
within the de昀椀nition of “higher-risk buildings” or
“relevant building” in the BSA. Thus, Essendi (the
tenant) could not seek a remediation order under
the BSA, as it could have done had the building in
question been a residential tower block above the
height threshold.
•
Essendi sought an order for speci昀椀c performance
requiring LPC to remove and replace the
cladding.
•
In July 2025, Essendi closed the hotel on the
advice of its 昀椀re safety expert, who advised that
it could not safely remain open. Essendi also
sought to recover its closure losses.
The Dispute: ACM Cladding on a
Commercial Hotel Building
The Court’s Decision on Landlord Repair
Covenants and Fire Safety
The dispute centred around the Ibis London
Wembley hotel – a 16-storey (42.5 metre high),
210-bedroom hotel building – constructed in the
early 2000s. The building was subsequently re-clad
in 2005-2006 by the tenant, Essendi (who was, at the
time, the full owner of the whole hotel building).
The “good condition” covenant: beyond
physical disrepair
•
The cladding was made up of Reynobond ACM
panels with a polyethylene (PE) core, the same
type of highly combustible cladding that was
a principal cause of the Grenfell Tower 昀椀re.
These are classi昀椀ed as Category 3 ACM (highly
combustible).
•
The claimant tenant, Essendi, operated the
hotel under a 12-year lease from the defendant
landlord, LPC. The current lease was entered
into in March 2019, after the Grenfell Tower
tragedy.
•
Despite being a lease of the whole building, under
the lease the landlord retained responsibility
for the structure and exterior of the building,
including cladding, and covenanted to “put and
keep” these in “good and substantial repair
and condition.” Unusually, there was no service
charge provision entitling the landlord to
recover the cost of such works from the tenant.
•
•
It is well established in case law that an obligation
to repair can only apply where there is a disrepair
(e.g. a deterioration from some previous physical
condition). The Court held that although the
cladding was not in physical disrepair, the “condition”
limb of the landlord’s covenant was broader than the
“repair” limb.
Applying the principle in Credit Suisse v Beegas
Nominees Ltd [1994], the judge held that the covenant
required the landlord to put and keep the building
in a condition “which, given the property’s age,
character and locality and, in particular, as a tower
block exceeding 18 metres in height intended
and required to be used as a hotel, would make it
reasonably 昀椀t for such use as regards 昀椀re safety
risks”.
The Court rejected arguments based on cost (£5–7
million), the (subjectively) short length of the lease
term (12 years), the absence of physical manifestation
of the defect, and the contention that replacement
would give the tenant something “completely
di昀昀erent” from what was demised.
It was common ground between both parties’
昀椀re safety experts that the Category 3 ACM
cladding panels represented an “intolerable
risk” of 昀椀re and required removal and
replacement. However, LPC refused to accept
liability for the remedial works, leading Essendi
to issue proceedings.
The legal obligations covenant and
the Regulatory Reform (Fire Safety)
Order 2005
The FSO applies to all workplaces and the
common parts of buildings containing 2 or more
domestic premises, and imposes legal duties on
the “responsible person” who has “control” of such
premises.
Essendi put forward novel arguments to obtain
what equated to a building safety remediation
order against LPC (despite not being entitled to
the same protections as residential leaseholders
EXPERT WITNESS JOURNAL
The Court held that LPC was in breach of the legal
obligations provisions in the lease, read together
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AUGUST 2026
