You may have seen the recent Upper Tribunal decision in Almacantar Centre Point Nominee No.1 Ltd v De Valk [2025] UKUT 298 (LC). It adds another layer to the ongoing debate around the ‘leaseholder protections’ found in Schedule 8 of the Building Safety Act 2022 (BSA 2022).

While an appeal is possible, the Upper Tribunal’s reasoning is clear and provides important guidance on the interpretation of paragraph 8 of Schedule 8, particularly relating to service charges for cladding remediation.

Key findings from the Upper Tribunal

• The external structure in question was a ‘cladding system under paragraph 8 of Schedule 8.
• Costs for replacing a cladding system could not be recovered from holders of ‘qualifying leases’ in any circumstances.

As regards the first point, the Upper Tribunal did not re-examine the evidence as regards whether the particular structure attached to the exterior of the building constituted a ‘cladding system’ within the meaning of paragraph 8 of Schedule 8 of the BSA 2022 (although this was not a classic type of ‘cladding system’ seen in many later buildings), holding that since this was a finding of fact made by the First-tier Tribunal (FTT) it was not open to it to do so. It did indicate that it considered the FTT’s reasoning to be sound.

The second point is especially significant - the restriction on recovering these costs applies regardless of when the ‘cladding system’ was installed and/or renovated. This was not limited to where the work qualified as a ‘relevant measure’ to remedy a ‘relevant defect’ as defined in the BSA 2022, which only applies where the issue arose within the 30 years before the relevant parts of the BSA 2022 were enacted. Instead, it applies to all ‘relevant buildings’ with unsafe cladding, no matter their age.

This is likely to be controversial; the legal arguments made as reported in the judgment confirm that legislation is not entirely clear on whether the protections apply only to buildings developed or altered during the 30-year period, or to all ‘relevant buildings’. However, the Upper Tribunal relied on a straightforward reading of the legislation, supported by parliamentary materials, to conclude that all 'relevant buildings’ are covered, including the one in this case. 

The Upper Tribunal also confirmed that the sequence of questions set out in Lehner v Lant Street Management Co Ltd [2024] UKUT 135 (LC), used to assess whether service charges are payable for work where the ‘leaseholder protections’ might apply, must now be read as interpreted by this new decision.

What does this mean for housing providers?

This may not be especially good news for those housing providers who find further ‘relevant buildings’ caught by the restrictions on service charge recovery, since those built or converted before the start of the ‘relevant period’ are in scope of the ‘leaseholder protections’  in relation to cladding remediation. In respect of cladding, the question of whether it is a ‘relevant defect’ does not apply.

That said, the clarity afforded by this decision, or potentially the outcome of any subsequent appeal, offers us all a welcome escape from some of the confusion found in this complex area of law.