The Technology and Construction Court’s decision in Essendi UK Hotels 2 Ltd v London Property Company Ltd [2026] EWHC 1354 (TCC) is an important addition to the growing body of post-Grenfell building safety case law.
At first glance, the case appears to be a niche landlord and tenant dispute concerning a hotel in Wembley. However, the judgment is likely to be of much wider interest to registered providers, local authorities and others managing legacy fire safety risks within their housing stock.
The decision demonstrates the courts’ willingness to interpret contractual obligations through a building safety lens and provides one of the most detailed judicial examinations to date of the interaction between private contractual obligations and the Regulatory Reform (Fire Safety) Order 2005 (FSO).
The background of the case
The case concerned the Ibis Hotel at Wembley, a 16-storey high-rise hotel clad with Category 3 aluminium composite material (ACM) panels containing a polyethylene core, the same category of combustible cladding associated with the Grenfell Tower fire. The parties’ fire safety experts agreed that the cladding represented an “intolerable risk” and required removal and replacement.
The claimant tenant, Essendi UK Hotels 2 Limited, sought to compel its landlord, London Property Company Limited (LPC), to undertake the remediation works.
Importantly, this was not a Building Safety Act 2022 case. As the building was a hotel rather than a residential building, the statutory remediation mechanisms contained within the Building Safety Act did not apply. Accordingly, Essendi relied upon contractual obligations contained within the lease and LPC’s obligations under the FSO.
Following a two-week trial, HHJ Stephen Davies found in favour of Essendi and ordered LPC to remove and replace the cladding.
A wider meaning of ‘good condition’
Perhaps the most significant aspect of the judgment is the court’s interpretation of the landlord’s covenant to keep the building in “good and substantial repair and condition“.
Traditionally, disputes concerning repair obligations have involved physical deterioration or damage. Landlords have often argued that inherent design defects are not matters of repair and therefore fall outside conventional repairing covenants.
The court accepted that there was no conventional disrepair. Nevertheless, it concluded that the landlord’s obligation to keep the building in “good condition” extended to the remediation of dangerous ACM cladding.
In reaching that conclusion, the judge placed considerable emphasis on the post-Grenfell context.
The court held that where a multi-storey building provides accommodation in which people live or sleep, a covenant to keep premises in good condition may require the remediation of an inherent defect where:
- the defect creates a significant fire safety risk; and
- remediation is required to make the building reasonably safe for occupation and to comply with fire safety obligations.
This is a noteworthy development. The judgment goes beyond traditional concepts of repair and recognises that, in certain circumstances, building safety defects may themselves prevent a building from being in “good condition”, even in the absence of physical deterioration.
The Fire Safety Order takes centre stage
The second major aspect of the judgment concerns the Fire Safety Order.
The lease required LPC to comply with its legal obligations. The court concluded that this covenant effectively incorporated obligations arising under the FSO and made them contractually enforceable between landlord and tenant.
The judge found that LPC was the relevant “responsible person” for the structure and exterior of the building and was therefore subject to obligations under the FSO in relation to the cladding system.
Of particular interest was the court’s conclusion that the polyethylene core within the ACM panels amounted to a “dangerous substance” for the purposes of Article 12 of the FSO. The court held that LPC was required, so far as reasonably practicable, to eliminate or reduce the risk arising from that dangerous substance and that replacing the ACM cladding with non-combustible alternatives was the appropriate means of doing so.
The decision therefore provides one of the clearest judicial examinations to date of how the FSO may operate in the context of combustible cladding.
Remediation, not risk management
A recurring theme throughout the judgment is the distinction between managing risk and removing risk.
LPC argued that a range of mitigation measures could allow the hotel to continue operating safely pending remediation. Those measures included enhanced management arrangements, alarm systems, fire dampers and other operational controls.
The court accepted that mitigation measures could reduce risk. However, it concluded that they did not remove the underlying problem.
Both fire safety experts ultimately agreed that the permanent solution was replacement of the ACM cladding. The court was therefore unwilling to treat management measures as an adequate long-term substitute for remediation.
That aspect of the judgment reflects a theme increasingly apparent in post-Grenfell litigation: where a serious life-safety risk has been identified, courts are likely to focus on remediation of the underlying defect rather than indefinite reliance on interim management measures.
The closure of the hotel
An additional aspect of the judgment that may be overlooked is the court’s consideration of Essendi’s decision to close the hotel.
Essendi had obtained expert fire safety advice that the hotel should cease operating until the ACM cladding was removed. LPC argued that the closure was unnecessary and unreasonable.
The court disagreed.
HHJ Stephen Davies concluded that Essendi had acted reasonably in relying on specialist expert advice and held that the decision to close the hotel was caused by LPC’s breaches. The court also recognised the relevance of wider considerations, including reputational concerns and the potential consequences of continuing to operate a building known to contain dangerous ACM cladding.
Although the quantum of any resulting losses remains to be determined, the court’s approach demonstrates a willingness to support cautious decision-making where significant fire safety risks have been identified.
Why does this matter to social housing providers?
Whilst Essendi arose in a commercial lease context, its significance extends beyond hotels and commercial property.
For social housing providers, the key message is that the courts continue to adopt a strongly safety-focused approach when dealing with serious fire safety defects.
Three points stand out.
First, the judgment demonstrates a willingness to interpret contractual obligations in a manner that promotes building safety outcomes. Traditional distinctions between inherent defects and disrepair are likely to carry less weight where serious fire safety risks are involved.
Secondly, the case highlights the continuing importance of the Fire Safety Order. Much attention has understandably focused on the Building Safety Act 2022, but Essendi serves as a reminder that the FSO remains a powerful source of substantive obligations in relation to existing buildings.
Thirdly, the court’s reasoning reflects a broader judicial trend towards ensuring that dangerous defects are remediated rather than merely managed. That approach is likely to resonate with many housing providers currently addressing historic fire safety issues across their stock.
Key takeaway
Essendi is not a Building Safety Act case and it does not concern residential property. Nevertheless, it is a significant building safety decision.
The judgment shows a court prepared to interpret contractual obligations in light of modern fire safety expectations, willing to deploy the Fire Safety Order as a substantive route to remediation, and focused on the practical objective of removing serious life-safety risks from buildings.
For registered providers and local authorities grappling with legacy fire safety defects, the case is another indication that the post-Grenfell legal landscape continues to evolve in favour of remediation and building safety outcomes rather than narrow technical distinctions.
About the author
Greg Carter is a Partner in the Construction Team at Winckworth Sherwood LLP. He specialises in building safety and complex building defect claims, with particular expertise in building warranty disputes and insurer litigation within the construction sphere. If you would like to discuss any of the issues raised in this article, please feel free to contact him.
Disclaimer
This article is intended for general information purposes only and does not constitute legal advice. Specific advice should be sought in relation to particular circumstances.