The Building Safety Act Blind Spot: Essendi Hotels v London Property Group
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What is the background of the Essendi budget hotel near Wembley and why did it close?
Hello and welcome to a newsflash episode of Unpacking the Case, the podcast by David Jones Bold, the real estate law specialist. As always, I'm joined by our head of legal training, Richard Snape. Welcome back to Unpacking the Case. In this episode, we're looking at a case that asks what happens when a hotel has to close because its cladding is considered a serious fire risk, but the legislation everyone associates with cladding defects, the Building Safety Act, doesn't actually apply. This case centres on a budget hotel near Wembley that was forced to shut its doors because of cladding issues similar to that seen on Grenfell Tower. The tenant wanted the building made safe, the landlord said it wasn't their responsibility.
With no help from the Building Safety Act, the dispute came down to the wording of the lease and some long established principles of landlord and tenant law. If you're dealing with commercial property, the answer often lies in repair covenants, the structure of the lease and what the parties actually agreed to years before anyone had heard of ACM cladding. We'll also look at two earlier authorities that shaped the court's thinking. Let's unpack the case.
Good morning, Richard.
Good morning and what a pleasant one, Lizzie. It was categorized was it within the economy group of hotels, which means it's cheap. And it was near Wembley Stadium in London. It was uh The uh on the south way to Wembley Stadium, they acquired the site in two thousand and one, the the the freehold to the site, and uh built the hotel or had the hotel built for them and in two thousand and two began to operate and have people in this sixteen story hotel. with over two with something like two hundred and ten bedrooms in it. And uh they uh So they sort of started trading. Uh they were the freeholders originally, but in two thousand and five, two thousand and six they had problems with the construction, not with fire safety on this occasion, but uh there had to be all kind of structural works.
There were planning was falling on people and their way to Wembley Stadium. And uh they um As a consequence, well, they clad in had to be um sort of replaced and the likes quite substantial by the sounds of it. In two thousand and seven they sold the reversion and got a lease back at the premises. They sold it to an associate of London Property Group and eventually London Property Group became Landlords and they took on responsibility for the exterior, unfortunately, for themselves. They were responsible for maintenance and keeping the exterior of the hotel in good condition. And they took on that liability just a month before Grenfell. Grenfell was on june the fourteenth, two thousand and seventeen.
Doesn't seem that long ago, actually. Um post Grenfell, you know, they were doing various is inspections alike two or three years ago, and found it had category three ACM. cladding, the same kind of cladding aluminium composites, with a polyethylene core that had caused the Grenfell fire to spread so rapidly. So they obviously had to do something about him. And it was decided in July of twenty twenty five that the risks were so great that they would have to close down the hotel. And uh basically the landlord London Property Group refused to do anything about replacing the cladding and claimed it was um Ascendi's uh fault and that's what gave rise to the case. Which you know, the problem is that the the Building Safety Act there.
worst drafted piece of legislation that I've ever come across, as I was quoted in Times and Sunday Times has seen. basically doesn't apply to hotels. For whatever reason though the official line is because hotels come within the um regulatory reform fire safety order should so they should have risk assessments anyway, but you've got to ask what the difference was is between a sixteen story hotel with people sort of sleeping there and the likes and a sixteen story residential block, which are treated differently. Well that's what gave rise to the the case, Lizzie.
So what happened when it went to court?
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