In June 2026, the Technology and Construction Court had to consider various issues regarding defective cladding on a high rise building, the application of the fire safety legislation and the meaning of lease covenants in an unusual factual background.
The case concerned the Ibis hotel in Wembley. It is a 16 storey building with 210 bedrooms. The hotel was constructed in the early 2000s and was re-clad by the tenant (Essendi) in 2005. Essendi operated the building as a hotel and then it entered into a sale and leaseback arrangement with the current landlord (London Property Company or LPC) under a 12 year lease which was signed in March 2019.
It was accepted that the cladding was highly combustible. It was also agreed that the cost of recladding the hotel was in the region of £5 – £7 million. On the basis of advice from its fire safety expert who said that it could not safely remain open, Essenti had closed the hotel.
The core issue was the meaning of the repairing covenant. Under the March 2019 lease, LPC retained responsibility for the structure and exterior of the building and it covenanted to “put and keep” these areas in “good and substantial repair and condition”
The issue between the parties was who was responsible for the cost of the recladding operation. And that question came down to whether the recladding came within LPC’s repairing covenant and the fact that the cladding, whilst unsafe, was still in good physical condition.
The court held that LPC was liable for the cost of the re- cladding exercise. The word “condition” in the repairing covenant was wide enough to cover the issues in question and this, together with the liabilities attaching to LPC under fire safety regulations, was sufficient to make it responsible for the cost of the re-cladding.
As Essendi’s decision to close the hotel was caused by LPC’s breaches, then the court would also go onto consider the issue of Essendi’s losses arising out of the closure of the hotel.
Essendi UK Hotels 2 Ltd v London Property Company Ltd [2026] EWHC 1354
