In November 2023, we reported on the first appeal decided by the Upper Tribunal (“UT”) on the provisions of the Building Safety Act 2022 (“BSA”) in the case of Adriatic Land 5 Limited -v- Leaseholders at Hippersley Point [2023] UKUT 271 (LC). Perhaps unsurprisingly, the landlord appealed the UT’s decision and that appeal was decided by the Court of Appeal (“CA”) just last week.

Recap

Our report on the UT’s decision can be read here. But by way of recap, the case concerned an application by the landlord, Adriatic Land 5 Limited, for dispensation from Section 20 consultation for urgent remedial works and interim fire safety measures. The FTT granted dispensation but (following an appeal by way of review of its original decision) made it a condition of dispensation that the landlord would not recover its costs of the dispensation application from the leaseholders. In other words, a Section 20C order was made ‘by the backdoor’.

The UT overturned that part of the FTT’s decision, holding that not only was the decision wrong procedurally, but also as a matter of substance, in circumstances in which the landlord was found to be “as blameless as it could be” and was seeking to ensure that an unsafe building was made safe as quickly as possible.

However, the UT found that the landlord was otherwise prohibited from recovering its costs of the dispensation application, from qualifying leaseholders, by the restrictions imposed by Para 9, Sch, 8 of the BSA. That was the case even though those provisions were not yet in force at the date the landlord made its dispensation application. Para 9, Sch, 8 of the BSA is part of the leaseholder protections and provides that :-

 "No service charge payable for legal or professional services relating to liability for relevant defects

 (1) No service charge is payable under a qualifying lease in respect of legal or other professional services relating to the liability (or potential liability) of any person incurred as a result of a relevant defect.

(2) In this paragraph the reference to services includes services provided in connection with—

(a) obtaining legal advice,

(b) any proceedings before a court or tribunal,

(c) arbitration, or

(d) mediation.”

The UT found that the costs caught by the above restriction were potentially very wide and that the costs incurred for a dispensation application in order for a landlord to remedy a relevant defect could be caught. In making this decision, Para 9, Sch, 8 of the BSA was, in essence, given retrospective effect.

It was this part of the UT’s decision that the landlord appealed to the CA.

The CA’s decision

In a detailed judgment, the CA dismissed the landlord’s appeal by a 2:1 majority. The full judgment can be read here [2025] EWCA Civ 856.

The CA considered in detail the purpose of the BSA and the backdrop against which the legislation was introduced. The CA recognised that the intention of the scheme introduced by Sch 8 was to provide a raft of protections for leaseholders, and to provide relief for leaseholders facing unprecedentedly large and very often unaffordable service charges.

The CA decided that Parliament could not have intended that leaseholders should still continue to face the uncertainties and difficulties of large and unaffordable bills that the legislation was designed to address. As such, the only way to give effect to the Parliamentary intention of protecting leaseholders is to interpret the provisions of Para 9, Sch 8 such that from the date of such provisions coming into force (28 June 2022) no service charge for the costs caught by those provisions would be payable. That is even if the landlord had incurred (or incurred a liability for) costs before that date.

Conclusion

The CA’s decision is another example of the Courts and Tribunals seeking to give effect to Parliament’s intention in passing the BSA, of protecting leaseholders affected by the costs of fire safety works and other associated costs. The decision confirms that the relevant provisions of the BSA have retrospective effect, but that does not apply indefinitely and the restriction on such costs being payable as a service charge only applies from 28 June 2022 when the BSA came into effect. Therefore, a leaseholder could not seek reimbursement for service charges paid for such costs, prior to that date.

It is important to stress of course that not all leaseholders will benefit from the leaseholder protections outlined in Para 9, Sch 8, which is a provision designed only to offer protection to leaseholders holding qualifying leases.

For more information or advice concerning these provisions, or the provisions of the BSA generally, please do not hesitate to contact a member of the team on 01435 897297 or info@kdllaw.com.

Disclaimer

This Legal Update describes the position in law as at the date of this article and care should be taken to note any subsequent amendments to the position as set out above.  The Legal Update is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of KDL Law or by KDL Law as a whole.

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