High Court Cladding Ruling Shows Why a Proper Fire Risk Assessment Matters More Than Your Lease

High Court Cladding Ruling Shows Why a Proper Fire Risk Assessment Matters More Than Your Lease

A High Court judgment handed down in June 2026 has sent a clear warning to commercial landlords, hotel owners and managing agents: you cannot rely on the small print of a lease, or on historic compliance certificates, to escape responsibility for a dangerous building.

In Essendi UK Hotels 2 Ltd v London Property Company Ltd, the Technology and Construction Court ruled that the landlord of a 16-storey, 210-room hotel in Wembley had breached its lease by refusing to remove and replace combustible cladding. The case is being described by lawyers as one of the most significant fire safety rulings since Grenfell — and it carries important lessons that go far beyond hotels.

What happened

The hotel's exterior had been reclad in 2005–06 with aluminium composite material (ACM) panels with a polyethylene core — the same category of cladding involved in the Grenfell Tower fire. At the time, the fire risk associated with this type of panel was not widely understood within the construction industry, and the court accepted that nobody involved at that point could reasonably have known the danger it posed.

That changed after Grenfell. By late 2024, an invasive survey commissioned by the hotel's tenant and operator confirmed that the cladding was indeed the dangerous "Category 3" type. Fire safety experts instructed by both sides agreed it represented what the court called an "intolerable risk." The landlord was notified — and refused to act.

Faced with continuing to operate a building its own fire safety advice said was unsafe, the operator closed the hotel in July 2025. It then took its landlord to court, relying not on the Building Safety Act 2022 (which does not cover hotels) but on two ordinary clauses found in almost every commercial lease: a covenant to keep the building in "good condition," and a covenant to comply with legal obligations.

The court found the landlord in breach of both. On the "good condition" covenant, the judge held that in the post-Grenfell era, keeping a multi-storey building where people sleep in good condition must include addressing a defect that creates a serious fire risk — even where there has been no physical deterioration of the material itself. On the "legal obligations" covenant, the court went further, holding that the cladding's combustible core amounted to a "dangerous substance" under Article 12 of the Regulatory Reform (Fire Safety) Order 2005 (the FSO) — meaning the landlord, as the building's responsible person, was independently obliged to remove it. The landlord has now been ordered to strip and replace the cladding within eighteen months, and faces a further hearing on damages.

Why this reaches well beyond hotels

It is tempting for landlords of offices, shops, warehouses or mixed-use blocks to read this and assume it doesn't apply to them. It does. The judgment turns on two points of law that exist in some form in almost every commercial lease and in every property covered by the FSO:

• "Good condition" can mean more than physical repair. A building that is structurally sound can still be in breach of a good condition covenant if it carries a serious, known fire risk.
• The FSO's duties bite independently of the lease. Whatever the lease says about who is responsible for what, the responsible person under the FSO still has a non-delegable duty to identify dangerous substances and risks, and to eliminate or reduce them.

In other words, a landlord cannot point to an old lease clause, a historic survey, or a tenant's earlier involvement in specifying materials, and treat that as the end of the conversation. The legal landscape has moved on, and the courts are now willing to enforce that shift.

The fire risk assessment is the foundation of all of this

What makes this case especially relevant for anyone responsible for a building is where the landlord actually went wrong. It wasn't a paperwork failure or a missed inspection date. It was a failure to properly understand and act on what a fire risk assessment is supposed to identify: the materials, construction and substances that could fuel or spread a fire, not just the alarms, extinguishers and escape routes inside it.

A fire risk assessment that only looks at the obvious, visible hazards — blocked exits, faulty alarms, overloaded sockets — and never asks deeper questions about external wall construction, cladding systems, or other "dangerous substances" within the meaning of the FSO, is not doing its job. This case confirms that the duty to assess and act on fire risk extends to the fabric of the building itself, and that the consequences of getting it wrong are not limited to enforcement action — they now include being ordered by a civil court to carry out remediation works, on top of potential criminal liability for directors.

For any landlord, freeholder or managing agent of a multi-storey building — residential, commercial, or mixed-use — this is a timely prompt to check that your fire risk assessment is genuinely thorough, properly documented, and kept under regular review, rather than a box-ticking exercise inherited from a previous owner or agent.

Get a fire risk assessment you can rely on

A robust, properly recorded fire risk assessment is your first and best line of defence — both for the safety of everyone using your building and for your own legal position should something go wrong. If you're not confident your current assessment would stand up to this level of scrutiny, get in touch with Whale Fire for a thorough, compliant fire risk assessment carried out by a fire safety professional with over 26 years of operational fire service experience.