Article / 28 Jul 2026

Essendi v London Property Company: a de facto Remediation Order outside the Building Safety Act?

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Gateley Legal

The decision in Essendi UK Hotels 2 Ltd v London Property Company Ltd [2026] EWHC 1354 (TCC) is a significant authority for building safety remediation outside the provisions of the Building Safety Act 2022 (BSA).

The Court has effectively granted the tenant (Essendi) what is, in substance, a Remediation Order, compelling the landlord (London Property Company) to remediate the unsafe cladding from the building. This order has been granted despite the building operating exclusively as a hotel and therefore being outside the scope of a Remediation Order under the BSA.

Background

The key events of this case can be summarised as follows:

  • 2002 – The 16-storey Ibis London Wembley hotel was completed and Essendi (as owner of the building at the time) began operating the hotel.
  • October 2002 – Original cladding panels detached, prompting a recommendation that the cladding system be replaced.
  • 2005–2006 – Essendi entered into a contract with Weatherwise to install a replacement cladding system. While not the originally intended specification, a Reynobond aluminium composite material (ACM) cladding system was installed. The replacement works completed in May 2006.
  • April 2007 – Essendi entered into a sale and leaseback transaction (the “original lease”) with Wembley Hotels Limited (WHL), under which WHL became the freehold owner and landlord while Essendi remained in occupation as tenant and hotel operator. Notably, there was no service charge regime in the lease to enable recovery of repair costs from the tenant.
  • May 2017 – The original lease contained bespoke provisions dealing with cladding. Those provisions placed responsibility for certain cladding defects on Essendi up to a May 2017 cut-off date.
  • June 2017 – Following the Grenfell Tower fire, ACM cladding was reassessed nationally. Essendi became aware of the unsafe cladding after the contractual cut-off date.
  • 2018 – London Property Company (LPC), an associated company of WHL, acquired the reversionary freehold, becoming landlord under the original lease.
  • 2019 – Essendi and LPC entered into a new lease (the “current lease”). The bespoke cladding provisions in the original lease were not carried forward. Responsibility for the structure and exterior, including cladding, instead reverted to LPC under standard landlord covenants.

The dispute arose as to which party bore responsibility for remediating the unsafe ACM cladding under the current lease.

What is a Remediation Order and why was it not available to Essendi?

Under Section 123 of the BSA, the First-tier Tribunal may make a Remediation Order requiring a relevant landlord to remedy specified relevant defects, or to take specified relevant steps in relation to those defects, in a specified relevant building.

A “relevant building” is defined in Section 117(2) of the BSA as a self-contained building, or self-contained part of a building, in England that contains at least two dwellings and is at least 11 metres high or has at least five storeys.

A “dwelling” is typically considered a residential unit and hotels therefore would not ordinarily meet the definition of a relevant building. The Ibis London Wembley, as a building used exclusively as a hotel, therefore fell outside the statutory Remediation Order regime.

Nevertheless, Essendi sought to advance novel arguments in order to compel LPC to remediate the cladding by “relying on these landlord covenants under a commercial lease to obtain what is, in substance, a building safety remediation order against LPC, in circumstances where the Building Safety Act 2022 does not apply to certain categories of buildings, including hotels.”

The “good condition” covenant

The current lease contained covenants which required LPC to put and keep the structure and exterior of the building in good and substantial repair and condition.

The Court considered two key issues:

  1. whether “to put and keep” conferred stronger obligations than simple “repair”; and
  2. whether the presence of intrinsic defects such as unsafe cladding would amount to a breach of this condition which would require remediation by LPC.

HHJ Stephen Davies accepted that the authorities generally point against a duty to make premises safe where the safety issue arises only from an intrinsic defect and has not caused physical damage or disrepair.

However, he confirmed that this presumption could be displaced by the circumstances in which the lease was entered into. On the facts, it was determined that the landlord’s covenant did require LPC to put and keep the building in a condition that made it reasonably fit for use as a high-rise hotel, including from a fire safety perspective. The presence of combustible ACM cladding meant the building did not meet that standard.

The judgment is not authority for a universal rule that every “good condition” covenant will require remediation of inherent fire safety defects. However, it confirms the courts may construe such covenants robustly where the commercial context supports such an interpretation and is a further case with a clear policy direction that the courts are willing to order cladding defects are fixed by those responsible without delay.

The Regulatory Reform (Fire Safety) Order 2005 (FSO)

The Court further considered the role of the “responsible person” under the FSO, which is the person and/or entity who is ultimately legally responsible for fire safety in a building.

Article 3 of the FSO defines the responsible person as:

  • first, the employer (for workplace areas); or
  • “the person who has control of the premises (as occupier or otherwise) otherwise, the person with control of the premises in connection with a business”; or
  • failing that, “the owner” (i.e. the landlord).

The Court held that the FSO applied to the hotel building. While Essendi was the responsible person in relation to its employees and hotel operations, that did not necessarily make it responsible for the structure and exterior. LPC retained responsibility for those parts of the building under the lease and was the responsible person being in control of the relevant parts of the premises under its lease obligations.

The Court confirmed that the FSO imposed duties on LPC to reduce fire risk and implement preventive and protective measures. LPC was required to remove and replace the combustible cladding.

The judgment

On the basis of both (i) the lease terms between Essendi and LPC, and (ii) LPC’s separate obligations under the FSO, the Court ordered that LPC remove and replace the dangerous ACM cladding present on the building. Although not made under the BSA, the Court order required LPC as landlord to remedy the relevant defects and to take specified steps within specified timescales. Essendi therefore achieved, through leasehold covenants and the FSO, a result that was materially similar to a statutory Remediation Order.

Implications for commercial landlords and tenants

The decision is likely to be important for commercial landlords and tenants dealing with buildings outside the BSA Remediation Order regime. Note, however, that the facts and lease terms here are unusual.

While this case highlights the increased exposure for landlords when managing buildings at risk of fire safety defects, even where such buildings are exempt from the BSA, However, this exposure may also equal an increased risk for tenants.

The crucial fact remained that there were no service charge provisions present, therefore LPC could not recover the costs of the remediation from Essendi. Under similar circumstances, but where there are service charge provisions, it is likely that the position of the parties would be entirely reversed and contested on opposite grounds.

The key points to consider are therefore that:

  • buildings excluded from the BSA Remediation Order regime may still be subject to court orders requiring remediation;
  • commercial lease covenants can provide a route to building safety remediation where the wording and factual context support that interpretation;
  • the FSO may reinforce leasehold obligations where the landlord retains control or responsibility for the relevant parts of the building; and
  • both landlords and tenants should review their leases carefully, particularly service charge, repair, indemnity and fire safety provisions in order to better understand their potential remedial liabilities.

The decision does not create a general remediation regime for hotels or other excluded buildings. It does, however, show that the courts may be willing to use ordinary contractual and regulatory obligations to achieve a similar practical outcome where the facts justify it.

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