Safety and Right to Buy – Context matters

The Mayor and Burgesses of the London Borough of Tower Hamlets v Various Leaseholders of Brewster House and Malting House

On 9 December 2025 the Court of Appeal handed down judgment in the case of The Mayor and Burgesses of the London Borough of Tower Hamlets v Various Leaseholders of Brewster House and Malting House. In line with the decisions of the First Tier Tribunal (FTT) and the Upper Tier Tribunal (UT), the Court of Appeal found that the landlord couldn’t recover the cost of works done to remedy structural defects via the service charge.

The facts of this case centre around 2 apartment blocks in East London, Brewster House and Malting House. Built in the 1960’s, the two apartment blocks consisted of 112 apartments. 80 apartments were let to council tenants and 32 were held on long leases. The respondents were 9 leaseholders whose leases were granted under a right to buy scheme between August 1989 and January 2005.

A year after construction of the buildings, structural defects were found and works were done in the 90s to strengthen the structure. Following a further investigation in March 2017, it was found that the previous works had not gone far enough to strength the structure of the building to make it habitable.

£9.2 million worth of works proceeded on the 2 apartment blocks, and the Applicant sought to recover this from the leaseholders via the service charge at a cost of £75,000-£90,000 per tenant.

The Respondents applied to the FTT for a determination pursuant to s.27A Landlord and Tenant Act 1985 as to whether these amounts were payable under the service charge. The FTT and subsequently the UT sided with the leaseholders. Tower Hamlets then appealed to the court of appeal.

The Applicants appealed on the basis that the FTT and UT had mis-interpreted the lease clause they sought to rely on it.

Under the lease, the leaseholders were liable to pay for “… all such works… in the absolute discretion of the Lessors may be considered necessary or advisable for the proper management maintenance safety amenity or administration of the Building.” The key word the Court of Appeal was looking at was “safety”.

They found that “safety” in the wider context of the lease clause did not relate to fundamental pre-existing structural defects but “concerned with relatively routine matters arising in the day to day management and administration of the building”.

Alongside this, the Court of Appeal considered the Housing Act 1980 as amended by Housing Act 1985. In brief the Housing Act1980 as amended by Housing Act 1985, clauses seeking to permit recovery of the costs of works to remedy structural defects is void under a right to buy lease, unless the tenant was aware of the defect at the grant of the lease, or, the landlord didn’t become aware of the defect until 10 years from the date of the lease. Neither applied in this case.

On the basis of their interpretation of ‘safety’ and the wider right to buy legislation, the Court of Appeal dismissed the appeal, and the leaseholders were found not liable to pay for the costs of the works.

Whilst this may seem like a tidal wave in the service charge recovery world, it is important to consider the context of the case – specific words and specific legislation. It remains to be seen whether the court will apply this case to other service charge interpretation clause.