1. Bradley v Abacus Land – What does ‘acting reasonably’ mean for you?

In Bradley v Abacus Land [2025] EWCA Civ 1308, the Court of Appeal allowed the landlord’s appeal against a decision of the Upper Tribunal. The Upper Tribunal had partially upheld the leaseholders’ challenge to service charges for gym facilities in their building. We reported on the lower court’s decision in an earlier Block Management Update – see here.

The dispute concerned the landlord allocating the entire costs of maintenance of a gym to residential leaseholders via their service charges, despite the gym being shared with a business and in circumstances where the leaseholders’ access to the gym was restricted.

The case considered the standard expected where a lease requires the landlord to act reasonably when exercising its discretion on the apportionment of service charge costs.

The Court of Appeal held that challenging a landlord’s decision requires proving it was beyond the realms of reasonableness, not merely that better alternatives existed. The test is whether the landlord’s decision was one that no reasonable landlord could have made. A landlord is only in breach of lease provisions requiring it to act reasonably when designating service charge items if its decision is one that no reasonable landlord could have reached. The Court of Appeal decided that a reasonable landlord could charge the entire gym costs to the leaseholders.

What this means for you: If you allocate costs in a way that a reasonable landlord could justify, you’re on solid ground, even if leaseholders disagree.

2. Avon Freeholds v Cresta Court – Are your statutory notices valid?

Earlier in 2025, in the case of Avon Freeholds Ltd v Cresta Court E RTM Company Ltd [2025] EWCA Civ 1016, the Court of Appeal addressed the validity of a claim notice issued by a Right to Manage (RTM) company under the Commonhold and Leasehold Reform Act 2002 (CLRA). The court decided the claim notice was invalid due to the RTM company’s failure to serve a participation notice on one of the qualifying tenants before service of the claim notice (a requirement under section 78(1) of CLRA). The court upheld the Upper Tribunal’s decision that a tenant of an equitable long lease during the registration gap is a qualifying tenant within section 75 of CLRA, provided that there is no legal titleholder of that lease.

However, the Court disagreed with the Upper Tribunal in relation whether failure of the RTM company to serve the participation notice on that qualifying tenant invalidated the claim notice. The stated that the claim notice was not voidable, but invalid. The court decided that, upon a proper interpretation of CLRA, applying the longstanding principles of statutory interpretation, strict compliance with s 78(1) is necessary and that the RTM company should have started its RTM claim afresh.

This is therefore a very positive case for landlords, since it clarifies that failure of a RTM company to comply with section 78(1) of CLRA is a potential means of challenging the acquisition of the RTM.

Permission has been granted to appeal the Court of Appeal’s decision on the issue of whether the failure to serve the participation notice invalidated the claim notice.

Why this matters to you: If you’re challenging an RTM claim, check compliance with section 78(1) of the CLRA. Failure to serve participation notices can invalidate the claim notice.

3. Centre Point House – Do you have unsafe cladding?

The latest hearing in Almacantar Centre Point v Various Leaseholders of Centre Point House [2025] UKUT 298 (LC) was awaited for its consideration of the meaning of paragraph 8 of Schedule 8 of the Building Safety Act 2022 (the BSA). That paragraph states that no service charge is payable under a qualifying lease in respect of cladding remediation (i.e. the removal or replacement of any part of a cladding system which forms the outer wall of an external wall system and is unsafe).

The building at the centre of the dispute was built in the 1960s. Water was getting into the timber frame of the building. The background is that landlord applied to the FTT for a determination whether repair costs could be recovered from leaseholders in the building as service charge. The FTT decided the works amounted to “cladding remediation” and, as such, qualifying leaseholders weren’t required to pay the service charge by virtue of the leaseholder protections in the BSA. The landlord appealed.

The Upper Tribunal held that the protection against service charges for unsafe cladding remediation in paragraph 8 of Schedule 8 applies regardless of when the cladding was installed, and is not limited to “relevant defects” as defined in section 120(2) of the BSA (which includes reference to the defects occurring in the 30-year period prior to section 120 coming into force).

The Upper Tribunal stated that paragraph 8’s clear and unambiguous wording makes no reference to “relevant defects” unlike other paragraphs, and provides distinct protection specifically for unsafe cladding, without reference to their being linked to a relevant defect.

The Upper Tribunal held that the words of paragraph 8 are clear and unambiguous, and accord with the underlying policy of the BSA and reflect the clear ministerial statement that “no leaseholder living in their own flat ‘would pay a penny to fix dangerous cladding.’”.

The Upper Tribunal also held:

• “cladding” doesn’t necessarily imply a two-layer system – it decided that one composite wall, as at the property in this case, could meet the definition; and
• “unsafe” in this context was not limited to fire risks, or risks to the residents – as there was a risk that the issues with the exterior of the building could detach, with risks to members of the public, the “cladding system” was unsafe.

The judgment suggests that, when it comes to unsafe cladding, the BSA can reach back for more than 30 years. Along with the very wide approach to what constitutes a cladding system, this case gives the BSA a very broad reach indeed. Permission to appeal this surprising decision to the Court of Appeal has been granted.

What this means for you: If you’re dealing with unsafe cladding, you cannot recover those costs from qualifying leaseholders. Unlike other parts of the BSA, this rule is not tied to the 30-year “relevant defect” period.

4. Other building safety updates

The Supreme Court has, in part, granted permission to appeal the Court of Appeal’s decisions on retrospective application of the BSA in the Adriatic Land 5 v Long Leaseholders at Hippersley Point and Triathlon Homes v Stratford Village Development Partnership cases. In Hippersley Point, in connection with recovery of service charges for legal and professional services concerning liability for safety defects, the Court of Appeal emphasised Parliament’s clear intent to protect leaseholders from unsustainable financial burdens by granting the legislation a retrospective scope despite its implications. The Court of Appeal’s decision in Triathlon Homes is explained in our briefing. These cases could reshape how you recover costs for safety-related works.

For more building safety updates, see our dedicated Building Safety Act expertise page.

For earlier editions of our Block Management Update, click here.

Block management expertise

Our dedicated Housing Management & Litigation team and dedicated block management experts specialise in advising landlords, management companies, managing agents and leaseholders in relation to all aspects of residential leasehold law, practice and block management.

For further advice, information or training on any aspect of housing management, please contact Karl Anders or Pawan Pandit.

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