[2025] UKUT 298 (LC)

For the following reasons, in our view, the benefit of 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 are clear and unambiguous, and accord with the underlying policy of the BSA and reflect the clear ministerial statement that “no leaseholder living in their own flat ‘would pay a penny to fix dangerous cladding.’”

We reject the submission that such a conclusion is anomalous, and that the interpretation is out of kilter with the structure of sections 116-124 and the remainder of schedule 8. Paragraph 8 provides a different protection for a limited group of qualifying leaseholders where the relevant building has “unsafe cladding.” There is no reason for imposing a restriction on the right to resist payment of the cost of remediation of unsafe cladding.

We agree that overall, the leaseholder protections provide a package of coherent measures both to achieve remediation and to absolve leaseholders from any responsibility for the cost of that remediation. We acknowledge that largely the package is limited to the 30 years referred to in the explanatory notes as follows:

“A 30-year period has been chosen as evidence shows that this period captures all buildings affected by the relevant safety issues. It aligns with changes this Act makes to the limitation period under section 1 of the Defective Premises Act 1972 (to which see section 135) and the relevant limitation period under the new cause of action relating to cladding products (sections 150 and 151). The Government has also agreed with major residential property developers that they will remediate buildings they had a role in developing or refurbishing in the past 30 years.”

This part of the notes discloses twin reasons for the choice of that 30-year limit: firstly, the evidence that the period captures the majority of buildings affected and secondly, the agreement with the major residential property developers that they would carry out remediation in respect of that 30 year period.

Paragraph 8 does not fall within that package of remediation. It is concerned only with who will pay the cost of making unsafe cladding safe. The bright line for the cut-off of the leaseholder protections means that those whose properties were built or refurbished before 28^th June 1992 are deprived of those benefits even if those works were completed just a week before the cut-off date. Paragraph 8 mitigates that impact in respect of unsafe cladding in accordance with the ministerial statement.

Looked at in this way, the consequence that landlords are prevented from seeking a Remediation Contribution Order or from serving a landlords notice under The Building Safety (Leaseholder Protections)(Information etc.)(England) Regulations 2023 is explicable. Where a building has unsafe cladding which is not also a relevant defect both leaseholders and landlords are impacted. Leaseholders cannot seek a Remediation Order and landlords cannot seek a Remediation Contribution Order since work to remediate unsafe cladding is simply outside of the main leaseholder protection scheme.

In our view the wording of paragraph 8 requires no addition or substitution of other words. Lord Nicholls’ test in Inco Europe Ltd v First Choice Distribution has not been met. Paragraph 8 has its own integrity and in our view cannot be criticised as being the result of inadvertence or careless drafting. The paragraph specifies that it applies only to a service charge under a “qualifying lease,” which indicates that its ambit was deliberately intended to be restricted. It also only applies to a part of a cladding system that is “unsafe” which is a further restriction. That word “unsafe” is not used in relation to “relevant defect” and must be taken to have a meaning.

The definition of “relevant defect” has more than one component: firstly, it must arise as a result of anything done (or not done) or anything used (or not used) in connection with relevant works (as defined), and secondly it must cause a “building safety risk” (as defined). This is very different from the criterion of “unsafe.”

We do not consider that the descriptive words in either section 116 or 120 assist in our interpretation of paragraph 8. We do not consider that they restrict the way in which schedule 8 should be read as a whole or in respect of paragraph 8. They are general and not definitive. Nor do we consider that the position of paragraph 8 within the schedule detracts from our conclusion. That position is equally explicable by reference to Lord Justice Newey’s analysis that paragraphs 8 and 9 “show that a third feature of the legislative scheme is that there are certain categories of costs that Parliament decided should not be claimable at all from leaseholders with qualifying leases – namely cladding remediation costs, and relevant legal and professional costs”.

Finally, we are not persuaded that the guidance in Lant Street (which we say more about later) was intended to be binding and we are clear that it is not. That guidance was helpfully given to assist FTTs and others in navigating the complexities of schedule 8 in respect of difficult legislation and developing jurisprudence. The question was not in issue in the case and no argument was directed to the point.

Accordingly, we dismiss Ground 1A of the appeal.