Qualifying leases (Part 1) - what are they and what do they mean in terms of cladding remedial works?

The Building Safety Act introduces leaseholder protections for leaseholders with a qualifying lease (sections 118-120 and Schedule 8).  These protections came into force on 28 June 2022 and were a very late addition to the Building Safety Act.

 A qualifying lease is a lease which meets the following criteria:

• the lease is for a dwelling in a building which has at least two dwellings;
• the lease is for a dwelling in a building of at least 11 metres or 5 storeys high (which is a different height requirement to the Higher-risk Building definition contained in other parts of the Building Safety Act);
• the lease is for a dwelling in a self-contained building or part of the building;
• the lease is a long lease (more than 21 years) of a single dwelling where the leaseholder has to pay a service charge; and
• as of 14 February 2022, the dwelling was the leaseholder’s principal home, or the leaseholder did not own more than 3 dwellings in the UK in total.

Whether or not a lease is a Qualifying Lease is an important question for buildings where cladding remedial works are required.  The Building Safety Act provides that leaseholders with a Qualifying Lease will not have to pay for any cladding remedial works.  Cladding remediation is defined in the Act as “removal or replacement of any part of a cladding system that forms the outer wall of an external wall system and is unsafe”.  

It is not possible to contract out of the leaseholder protections under the Building Safety Act and therefore leaseholders will not be required to pay for cladding remedial works, even where they have a responsibility to pay for repairs under their lease.

Qualifying Leaseholders may also be exempt from paying for, or have a capped liability for, works which are required because of a building safety risk. Further information on the Building Safety Act and building safety risks shall be provided in future blogs within this series.