The Building Safety Act 2002 (BSA 2002) was introduced to address safety concerns for occupants of high-rise buildings following the 2017 Grenfell Tower tragedy.
A key component of this legislation is to regulate the cost of works and to determine who would be liable for the cost of remedying building safety issues. Section 122 and Schedule 8 of the BSA 2022 include provisions which are designed to protect leaseholders under qualifying leases from liability for some or all the costs incurred in remedying certain safety defects.
These leaseholder protections were considered in the Upper Tribunal (UT) case of Lehner v Lant Street Management Company Limited (2024).
Protection under the BSA 2022
Section 122 and Schedule 8 of the BSA 2022 provides protections for leaseholders in a “relevant building” under “qualifying leases” from having to pay some or all the costs of remediation works for “relevant defects” which could be charged back to them via service charge. This includes protection for all leaseholders from liability to contribute towards the cost of “relevant measures” if the landlord was responsible for the relevant defect.
Broadly, a building will be a “relevant building” if it is in England, is a high-rise residential or mixed-use building and is at least five storeys or 11 metres tall. What will be a “relevant defect” is considered in section 120(2), and in general covers historical building safety defects which cause a building safety risk from the spread of fire or collapse of the building or part of it.
For a lease to be a “qualifying lease” it must meet the requirements set out in section 119(2) of the BSA 2022. These requirements include:
- the lease being a lease of a single dwelling for a term exceeding 21 years, which requires payment of service charge, and be granted before 14 February 2022; and
- as of 14 February 2022, the property must be the leaseholder’s only or principal home, and the leaseholder must not own any other dwelling in the United Kingdom, or no more than two dwellings in the United Kingdom apart from their interest under the lease.
“Relevant measures” are defined in Schedule 8 as any measures taken to remedy the relevant defect, prevent a relevant risk from materialising, or reduce the severity of any incident arising from a relevant risk.
Cladding works
Under paragraph 8 of Schedule 8, no service charge is payable under a qualifying lease in respect of cladding remediation. This includes the costs of removing or replacing any part of a cladding system which is unsafe.
Lehner v Lant Street Management Co Ltd (2024)
This case concerned the leaseholder’s contribution towards the costs of removing and replacing combustible insulation and installing additional fire stopping in the cavities. The original decision at the First-tier Tribunal (FTT) found that Mr Lehner was liable for service charge costs totalling £1,244.85 in respect of cladding remediation works.
On appeal by Mr Lehner, the UT considered whether the protections afforded by section 122 and Schedule 8 of the BSA 2022 applied. The UT determined that the service charge of £1,244.85 was not payable by Mr Lehner because it related to a cladding remediation. As Mr Lehner was a qualifying leaseholder, he was protected by paragraph 8 of the BSA 2022 and therefore not liable to pay this charge. The UT provided a seven-step test which can be used by Tribunals to establish whether service charges would be payable in respect of relevant works. These steps are summarised at paragraph 45 of the Judgment and can be read in full here.
Conclusion
The BSA 2022 is new and complex, and it is still unclear which works can be recovered via service charge. This is one of the first cases analysing the leaseholder protections arising under Schedule 8 of the BSA 2022, and the step-by-step guide is a useful checklist for the Tribunal, practitioners, landlords, and leaseholders to apply in determining whether the costs of relevant works can be passed on to the leaseholder.
We anticipate that there will be an increasing number of claims made and subsequent decisions in this area, and the decision and steps provided in this case give a good starting point for any landlords, leaseholders, and practitioners in determining whether the cost of works can be recovered via a service charge.