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In Essendi UK Hotels 2 Ltd v London Property Company Ltd [2026] EWHC 1354 (TCC), the court held the landlord responsible under the current commercial lease for removing and replacing dangerous ACM cladding at an Ibis hotel. The decision is relevant to contractors because it shows how safety-critical design and installation decisions can surface years later in a dispute. It is not a ruling that the contractors involved, or contractors generally, were liable.
What did the court decide?
On 5 June 2026, HHJ Stephen Davies, sitting as a High Court Judge in the Technology and Construction Court, found the landlord in breach of the current lease’s covenants concerning the building’s condition and compliance with legal obligations. The reported outcome required removal and replacement of the Category 3 aluminium composite material (ACM) cladding.
The judge described the principal issue as “who, if anyone, is responsible for undertaking major building safety works to remove external cladding” from the hotel. In the evidence recorded in the judgment, fire-safety experts for both parties agreed that the panels presented an “intolerable risk” of fire and needed to be removed. That is the experts’ characterization as reported by the judge, not a general finding about every ACM façade.
The decision allocated responsibility between landlord and tenant under this lease, on the wording and evidence before the court. It did not establish that historic contractors were liable for the cladding or that a landlord must always bear remediation costs.
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What was the cladding risk at the Wembley hotel?
The dispute concerned the purpose-built Ibis London Wembley hotel, a 16-storey building standing 42.5 metres high, with 210 bedrooms. Those are case facts stated in the judgment, not industry-wide statistics. The external façade included ACM panels with a highly combustible polyethylene core. Post-Grenfell testing had placed the material in Category 3, which the judgment describes as highly combustible.
The parties’ case history records a series of investigations after Essendi raised concerns:
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- An invasive survey and architectural report identified ACM panels and found no evidence of cavity barriers in three of the four surveyed locations.
- A fire specialist reported that the cladding core had no flame-retardant properties.
- A detailed fire-engineering assessment classified the material as Category 3 and advised removal and replacement.
These were steps taken in this dispute, not a universal inspection protocol. A visual check alone cannot be treated as resolving a technical fire-safety question.
Why did the lease history matter?
The court’s answer turned on the relevant covenants in the current lease and the circumstances of this building. The indexed judgment text also records arguments about the tenant’s role in commissioning replacement cladding in 2005 and bespoke remedial and indemnity provisions in an earlier lease. The court considered whether the later-identified, latent fire-safety risk fell within those earlier provisions.
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That history matters because an earlier project, an old indemnity, or a party’s involvement in selecting or replacing façade materials does not by itself answer who must undertake later remediation. The actual contract wording, when the risk became known, the parties’ responsibilities, and the evidence all matter. The reported result should therefore not be reduced to a general rule about cladding products or responsibility for façade defects.
What should contractors take from the decision?
For contractors, the practical lesson is to preserve an accurate record of decisions and responsibilities on safety-critical façade work. Cladding can remain in place long after the original design and installation team has moved on; records may become important if a hazard is discovered later and parties dispute who controlled a decision or accepted an obligation.
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Keep the technical and project record
- Retain product specifications, fire-performance documentation, submittals, approved substitutions, design approvals and installation records.
- Keep inspection reports, handover documents, notices, warnings and records of assumptions or limitations communicated during the work.
- Record who selected materials, who held design responsibility, who reviewed or accepted the design, and what remedial obligations—if any—survive handover.
Make responsibility explicit in the contract
Check the scope of work, design responsibility, warranties, notice requirements, inspection duties, remedial provisions and insurance arrangements. Distinguish the respective roles of the landlord, tenant, building owner, designer, main contractor, specialist subcontractor and fire-risk assessor. A lease allocates duties between its parties; it does not, without more, establish a contractor’s obligations under a separate works contract or warranty.
Escalate a potential safety issue appropriately
If a façade concern is raised, document the investigation, the information available and the decision trail, and obtain advice from appropriately qualified professionals. Do not assume that a generic visual inspection, a proposed mitigation measure or the presence of a particular product label settles whether the building is safe or whether legal obligations have been met. The Wembley dispute involved expert assessments and a finding that the cladding needed removal and replacement.
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When reviewing a project or a later dispute, focus on the actual wording of the relevant lease or works contract, who controlled design and material selection, the timing and knowledge relevant to any latent defect, the duties to inspect or notify, and the evidence supporting the risk assessment. Take legal, technical and insurance advice appropriate to the project rather than treating this lease decision as a substitute for it.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What changed in the October 2026 procedural ruling?
In a separate ruling handed down on 2 October 2026, Essendi UK Hotels 2 Ltd v London Property Company Ltd [2026] EWHC 2501 (TCC), HHJ Davies considered whether the trial judge could be told the date of the defendant’s earliest Part 36 offer after the claimant had substantially succeeded at the preliminary-issues trial. He concluded that the date could be disclosed under CPR 36.16.
This was a procedural decision about disclosure of the offer date. It did not determine the amount or allocation of costs, and it did not change the substantive cladding decision.
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