Landlord in London is barred from obtaining funds from leaseholders for necessary repairs involving unsafe cladding.
In a significant ruling, the Upper Tribunal (Lands Chamber) has dismissed an appeal brought by Almacantar Centre Point Nominee companies regarding the costs of remediating Centre Point House's defective facade. This iconic London building, constructed between 1963 and 1966, was converted into 36 residential flats in the late 1980s.
The decision, which concerns leaseholders at Centre Point House and their liability to pay service charges towards the remediation of the building's unsafe facade, has far-reaching implications. The tribunal upheld the First-tier Tribunal's (FTT) interpretation of paragraph 8 of Schedule 8 to the Building Safety Act 2022, ruling that it prohibits service charges for cladding remediation under qualifying leases.
Martin Hutchings KC, for Almacantar, argued that a broader reading of the Act would have 'extraordinary and significant consequences for landlords.' However, the tribunal made it clear that Parliament's intention was for qualifying leaseholders never to bear the costs of remediating unsafe cladding, regardless of when it was installed.
The distinctive east and west elevations of Centre Point House, featuring timber-framed glazing and spandrel panels, were at the heart of the dispute. Almacantar had proposed a wholesale replacement of the facade with a steel curtain wall system in 2023, arguing that the building's facade is not 'cladding' within the statutory meaning. However, the tribunal endorsed the FTT's conclusion that the timber-and-glass system constitutes cladding attached to the concrete structure.
Moreover, the tribunal rejected Almacantar's argument that 'unsafe' should be interpreted narrowly. Instead, it approved the FTT's conclusion that 'unsafe' bears its ordinary sense and encompasses wider risks. The tribunal also disagreed with Almacantar's narrow reading of paragraph 8, finding that it was designed to mitigate the blunt effect of the 30-year limit in the Act, providing a different protection for qualifying leaseholders with unsafe cladding.
In the case of Almacantar Centre Point (appellant) v Penelope de Valk and 12 others (respondents), Martin Hutchings KC and Harriet Holmes of Wilberforce Chambers represented the appellant, while Justin Bates KC and Mattie Green of Landmark Chambers represented ten of the respondents.
The tribunal's conclusion is that no qualifying leaseholder will ever have to pay for unsafe cladding remediation. This ruling brings relief to the residents of Centre Point House, who faced potential financial burdens due to the serious degradation of the building's unsafe facade, which the tribunal found poses a serious risk to the health and safety of residents and the public.
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