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The Upper Tribunal has handed down its much awaited decision in the case of Almacantar Centre Point Nominee No.1 Ltd & Ors v Penelope de Valk & Ors [2025] UKUT 298 (LC), dismissing Almacantar's appeal and finding for the leaseholders.聽

It means that leaseholders are not liable to pay for the cost of remediating dangerous cladding.

The decision cements the Court and Tribunals desire to uphold Michael Gove鈥檚 pledge that no leaseholder will pay for the cost of remediation of dangerous cladding. It took the widest approach to interpret the extent of how leaseholders will be protected against the cost of remediation of unsafe cladding.

This case involves the iconic Centre Point House in Tottenham Court Road [adjacent to the 34-storey tower block]. It has long been established that the external wall cladding system is unsafe and requires remediation. The remediation works have stalled however, as Almacantar, the landlord, has sought to establish who should pay for the cost of remediation. It argues that the building does not have the type of cladding intended to be protected under the Building Safety Act 2022 (BSA). The leaseholders argue otherwise, claiming this is precisely what was intended by the leaseholder protections introduced by the legislation.

The case is important as it looks at the meaning of "cladding remediation鈥� and whether this should be limited to what is known as "a relevant measure relating to a relevant defect". The decision is a new and novel point which has not been considered previously by any court or Tribunal.

The detail

The appeal was to decide whether the cost of the proposed remediation works (the "Scheme") to the fa莽ade of Centre Point House would be recoverable as a service charge from the leaseholders who own flats in the building.

At first instance, the First Tier Tribunal (FTT) decided that the fa莽ade at Centre Point was an "unsafe cladding system" which fell within the scope of leaseholder protections under the Act. Additionally, the FTT had decided that the leaseholders were afforded those protections because they are what is known as "qualifying leaseholders" under the act. The effect of this is the leaseholders were not required to pay a service charge for the cost of the Scheme.

The landlord sought to appeal this decision, arguing that the FTT had misinterpreted how the leaseholder protections, specifically, how paragraph 8 of schedule 8 was to operate. The landlord said the Scheme needed to fall within the definition of a relevant defect in order for it to fall within the leaseholder protections. Relevant defects are time limited and so will only apply to works undertaken in the 30 years prior to 28^th June 2022 as well as worked carried out after that date to remedy relevant works. The landlord argued that as the defects to the fa莽ade at Centre Point House originated from the original design and construction, which took place between1963 and 1966, the Scheme was not relevant measures to remedy relevant defects. The Upper Tribunal disagreed and found of the leaseholders, stating that paragraph 8 of schedule 8 of the BSA does not use the words "relevant defect" or "relevant measures". Remediation of unsafe cladding was to be treated differently, upholding Parliament's intention that "no leaseholder living in their own flat would pay a penny to fix dangerous cladding". On this basis, the legislators had made a conscious decision to treat cladding remediation differently to remediation of relevant defects.

The Upper Tribunal also spent time looking at whether there was "cladding" and a "cladding system" at Centre Point House. Intentionally, the BSA does not define cladding and so expert evidence was required to decide this point. The FTT heard substantial expert evidence on this point and found there was cladding at the building. The Upper Tribunal refused to depart from the FTT's finding. The one point the Upper Tribunal did rule on is to reject the landlord's suggestion that for there to be a "cladding system" as set out in paragraph 8 of schedule 8 there needed to be two systems 鈥� the cladding system and the external wall system. Again, the Upper Tribunal was not prepared to narrow the scope of what was meant by "cladding system" rejecting the suggestion that there needed to be two systems. Finally, the Upper Tribunal rejected the landlord's argument that the cladding system was only "unsafe" if it posed a fire risk. The Upper Tribunal agreed with the FTT that unsafe should not be narrowly decided, that the words in the act did not limit how unsafe was to be decided and it should be given its widest interpretation. The Upper Tribunal agreed with the FTT that the cladding at Centre Point was unsafe where the condition of the fa莽ade meant there was a risk that the panels or windows may fall out.

As a separate point, the landlord sought to argue that the FTT was wrong to decide that all the leaseholders who participated in the original claim benefited from the presumption of "qualifying leaseholder" meaning they were afforded the protection from costs of the remediation of the unsafe cladding system. This was because the FTT had not been provided with all the factual information to make this decision. The Upper Tribunal rejected this argument stating that the FTT had not made any factual decision and instead, it had merely stated that absent the landlord following the correct procedure under the building safety act, all leaseholders were presumed to be qualifying thus afforded leaseholder protections.鈥�

Conclusion

The case is important as it looks at key concepts of what was meant by "cladding", "cladding remediation" and "unsafe". It provides much needed guidance on how the leaseholder protections will work when a building has an unsafe cladding system which requires remediation. Both leaseholders, landlord and developers will benefit from the decision since it provides much needed clarity on the extent of remediation and protection from costs.

It cannot be clearer, given this decision and recent Court of Appeal decisions that the courts and tribunals will do their utmost to uphold Parliament鈥檚 intentions and to protect leaseholders from costs of remediation and work which they had no part of.

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