THE PROPERTY FILTER TAKE
A High Court ruling has confirmed that commercial landlords in England can face cladding remediation liabilities outside the leaseholder protections established by the Building Safety Act 2022.
If you own commercial or mixed-use property with external cladding, you may hold significant remediation costs with no clear mechanism to recover them from tenants.
You may wish to commission an EWS1 (External Wall System 1) fire safety assessment and review your lease terms with a solicitor before a formal liability is identified against you.
A High Court ruling has established an important legal precedent for commercial property in England: cladding remediation liabilities can sit with commercial landlords even where the Building Safety Act 2022 leaseholder protections do not apply. According to Mortgage Solutions (10 August 2026), many commercial property owners assumed cladding risk was a residential problem only. They now face hidden exposure they had not budgeted for.
Full source article unavailable at time of writing.
What did the High Court actually decide?
The Building Safety Act 2022 introduced leaseholder protections in England that prevent qualifying residential leaseholders from being billed for cladding remediation. When those costs cannot be passed to leaseholders, they stay with the freeholder or head lessee. The High Court appears to have extended this liability logic to commercial arrangements, according to Mortgage Solutions (10 August 2026).
In practice this means a commercial landlord may be responsible for the full cost of removing and replacing unsafe cladding. There is no statutory right to recover that amount from business tenants. The liability does not arise from the ruling itself - it arises from the presence of defective cladding on the building. The ruling clarifies who in the ownership chain must carry it.
Accounting for this legal shift is now a necessary part of any sound property investment strategy for investors holding commercial or mixed-use assets.
Which commercial landlords face the greatest exposure?
Exposure is highest where:
The building meets the higher-risk building (HRB) threshold under the Building Safety Act 2022: at least 18 metres in height or at least 7 storeys.
The external wall system includes combustible or non-compliant cladding materials.
The landlord holds a long lease or freehold with no provision for full cost recovery from tenants.
Mixed-use buildings - those with commercial ground-floor units and residential floors above - are particularly at risk. The residential element can trigger HRB classification for the whole structure, while commercial portions create gaps in cost-recovery rights. The stress-test calculator can help you model the financial impact of an unplanned remediation bill on your portfolio cash flow.
What steps should you take now?
The deadline you need to know is not a fixed calendar date. The liability exists from the moment defective cladding is present on the building. Every day without an assessment is a day the risk goes unquantified.
Unidentified cladding defects can affect building insurance cover, mortgage refinancing terms, and any future sale. Lenders and insurers increasingly require evidence that external wall systems have been assessed before agreeing to new arrangements.
For landlords managing multiple commercial units, a systematic compliance tracking process is essential. The business and systems hub covers frameworks for managing obligations across a portfolio. The free resources hub includes further guidance on understanding your obligations as a property owner in England.
Key takeaways
A High Court ruling has confirmed commercial landlords in England can face cladding remediation liabilities outside the Building Safety Act 2022 leaseholder protections, per Mortgage Solutions (10 August 2026).
The HRB threshold under the Building Safety Act 2022 is 18 metres in height or 7 storeys - buildings above this level face the highest exposure.
Mixed-use buildings with residential upper floors are particularly at risk, as the residential element can trigger HRB classification for the whole structure.
There is no fixed compliance deadline: the liability exists from the moment defective cladding is present on the building.
A qualified fire engineer can carry out an EWS1 (External Wall System 1) assessment to identify your exposure before a liability is formally raised.
Frequently asked questions
Does the Building Safety Act 2022 apply to purely commercial buildings?
Can commercial landlords recover cladding remediation costs from business tenants?
What is an EWS1 assessment and do I need one?
