Outside the Building Safety Act, but not off the hook

Picture a tower in Wembley, wrapped in the same combustible ACM cladding that drove the Grenfell fire. Fire engineers on both sides agree the risk is intolerable and that the cladding must come off. Yet because the building is a hotel, it sits outside Higher-Risk Building regime established by the Building Safety Act 2022. There is no remediation order, and no statutory route to force the work.

For many owners, “in scope of the BSA” has quietly become the line between the buildings we worry about and the ones we don’t. The Technology and Construction Court has just moved that line.

In Essendi UK Hotels 2 Ltd v London Property Company Ltd, the court ordered the landlord to remediate anyway. Not under the BSA, but under the ordinary “good condition” and “legal obligations” covenants in the lease, read alongside the Fire Safety Order. The order was clear: strip the cladding within six months, complete re-cladding within eighteen, with damages to follow. The judge also made a pointed observation: the parties’ fight over who should pay did more damage than the defect itself, and the closure costs that could previously have been avoided would now fall on one of them.

The decision reinforces an important point. The obligation to look after these assets was always there, written into lease covenants and the Fire Safety Order, whether or not a statute happens to name the building. Hotels, offices and sub-18-metre stock remain subject to the duty to manage risk.

It is also a reminder that these questions are technical before they are legal. What is the material? Is the risk tolerable? When did the danger become knowable? These are building questions, and they reward owners who keep a clear, current picture of their assets and act on what they find.

So it is worth landlords asking three questions, calmly and well ahead of any dispute. Do we know what is on our buildings? Do we understand what it obliges us to do? And are we managing it on our own terms?

At Kingswood, we work alongside owners to make an asset’s condition and its latent obligations legible, throughout the investment lifecycle and wherever responsibility needs to be understood.

There is a commercial dividend to getting this right, too. Clarity over a building’s condition and its latent obligations is not only the responsible thing to do as a landlord; it also speeds up transactions. A seller who can evidence what is on the asset, what it obliges them to do and how it is being managed removes the uncertainty that stalls deals, invites price chips and drags out diligence. Surprises in a data room cost time and value. A clean, well-understood asset trades faster and on better terms.