Who pays for cladding remediation?

In short: The Building Safety Act 2022 protects "qualifying leaseholders" from most building-safety remediation costs. Where the protections apply, the cost of fixing unsafe cladding cannot be passed to qualifying leaseholders at all - it falls to developers, freeholders or government schemes. Contributions to non-cladding defects are capped and, in many cases, reduced to nil.

What is a qualifying lease?

A lease is a qualifying lease if, on 14 February 2022, all of the following were true:

• it was a long lease (granted for more than 21 years);
• the leaseholder paid a service charge under the lease; and
• the building was at least 11 metres tall, or had at least 5 storeys; and
• the flat was the leaseholder's only or principal home, or they owned no more than three UK dwellings in total.

Note this is a different, lower threshold (11m / 5 storeys) than the "higher-risk building" test - the leaseholder protections reach more buildings.

Cladding costs

Where the protections apply, the building owner cannot pass any of the costs of remediating unsafe cladding to qualifying leaseholders through the service charge. Those costs sit with the parties responsible - developers, freeholders and landlords - and with the government's remediation funding schemes.

Non-cladding defects: the caps

For other ("non-cladding") relevant defects, a qualifying leaseholder's contribution is capped and spread over up to ten years. The standard caps are around £10,000 (or £15,000 in Greater London), with higher caps for high-value flats. And there is no contribution at all in several cases, including where:

• the flat's value was below a set threshold on 14 February 2022;
• the landlord (or an associated company) was the developer, or is linked to the defect; or
• the landlord group met a net-worth test on 14 February 2022.

(The exact figures are set by regulations and can change - always check the current thresholds for a specific building.)

What this means for building owners and RMCs

If you are a freeholder, RMC or RTM company, the protections shape who can be billed and how remediation is funded - and getting the building's evidence in order (the external wall assessment, the golden thread) is what unlocks funding routes and keeps a project moving. See our guide to EWS1 vs FRAEW.

How CTS helps

CTS advises building owners, RMCs and managing agents on the practical side of remediation - reviewing external-wall assessments, coordinating the right specialists, building the evidence base, and folding it all into your golden thread and safety case - so the building progresses and the compliance position is defensible.

General information, not legal advice. Reviewed by the CTS building safety team.