Markus Lehner v Lant Street Management Company Limited

Leaseholder protections under Building Safety Act 2022 Schedule 8 must be considered by the tribunal whenever a service charge relates to building-safety defects, whether or not the parties have raised them. A lease may be treated as qualifying where the landlord has not taken the prescribed reasonable steps to obtain a qualifying lease certificate. “Cladding system” is not confined to the external cladding panel. It may include insulation, cavity barriers and other components forming the external wall system. Replacement of defective or missing components, including components of improved specification or newly installed components, may constitute cladding remediation. The protection applies where the cladding system as a whole forms the outer wall of an external wall system and is unsafe.

Mr Markus Lehner appealed against a decision of the First-tier Tribunal (Property Chamber), which had determined that he was liable for a service charge of £1,244.85 for works involving removal and replacement of insulation and installation of cavity barriers at a residential block.

The appeal concerned the application of the leaseholder protections in Building Safety Act 2022 Schedule 8, including the qualifying-lease provisions and the protection for cladding remediation. It also concerned the validity of the demand under sections 47 and 48 of the Landlord and Tenant Act 1987. The central questions were whether the lease qualified, whether the works were relevant measures and cladding remediation, and whether the demand correctly identified the landlord.

1. Appeal allowed. The FTT’s decision was set aside and replaced by a determination that no service charge was payable in respect of the works.
2. The demand was invalid under section 47 of the Landlord and Tenant Act 1987 because it identified Damgate Freeholds Limited rather than Lant Street Management Company Limited as the landlord. Under section 47(2), the charge was not due until a compliant demand was served.
3. The building was a relevant building, the original insulation and absence of cavity barriers constituted relevant defects, and the works were relevant measures under Schedule 8 paragraph 1(1) of the Building Safety Act 2022.
4. The FTT had erred in treating the leaseholder as having to prove that his lease was qualifying. The lease satisfied section 119(2)(a) to (c), and paragraph 13 applied because the landlord had not taken reasonable steps to obtain a qualifying lease certificate. The lease was therefore treated as a qualifying lease.
5. The FTT had also adopted too narrow an interpretation of “cladding system”. The expression includes a system comprising several components, including insulation and cavity barriers, and is not limited to the outer aluminium panel. The relevant works removed and replaced insulation and installed cavity barriers as part of an integrated package of remediation.
6. The conditions in paragraph 8(2) concern the cladding system as a whole. The system must form the outer wall of an external wall system and must be unsafe; the particular component removed or replaced need not independently satisfy those conditions. Replacement need not be like-for-like. The whole package of works was cladding remediation, so paragraph 8(1) prevented recovery from a qualifying leaseholder.
7. The Tribunal left open the effect of certain landlord-certificate provisions on pre-20 July 2022 demands and did not determine the contribution condition because those issues were unnecessary to the outcome.

• Upper Tribunal (Lands Chamber): appeal allowed; the FTT decision of 12 April 2023 was set aside and a determination substituted that no service charge was payable.
• First-tier Tribunal (Property Chamber): on 12 April 2023 determined that Mr Lehner was liable for £1,244.85.