Building safety update: July 2026

This instalment of the building safety team’s round-up of key developments in the sector covers:

• significant cases on building liability orders and building safety obligations under commercial lease repair covenants;
• new legislation, including changes to the Building Safety Levy regulations;
• recent government consultations and policy announcements.

Building liability orders (BLO) – Mulalley & Co Limited v Sto Limited & Anor [2026] EWHC 1552 (TCC)

Following remediation works at a residential tower block, Mulalley sought to recover its losses (circa £1.8 million) from Sto UK, the supplier of the cladding system, via a claim for contribution under the Civil Liability (Contribution) Act 1978. Interestingly, Mulalley was able to do this by relying on Sto’s alleged liability direct to the building owner under section 149 of the Building Safety Act 2022, which is the new cause of action against product manufacturers/suppliers.

Mulalley argued that, because Sto UK was liable directly to the owner for the same damage, Mulalley could obtain a contribution to that liability from Sto. Then, when Sto UK entered into administration, Mulalley successfully pursued its German parent company (Sto Germany) using a BLO under the Building Safety Act 2022.

Notably, Mulalley obtained a default judgment against Sto Germany after it failed to engage with the proceedings. However, Mulalley was still required to prove its losses and justify the remediation costs claimed. The court ultimately held Sto Germany responsible for 87.5% of the recoverable costs, demonstrating the substantial exposure that product manufacturers may face where defective products lead to building safety defects.

Order of specific performance requiring remediation of defective cladding – Essendi UK Hotels 2 Ltd v London Property Company Ltd [2026] EWHC 1354 (TCC)

The High Court found that the landlord of a hotel, London Property Company, breached its lease covenant to keep the building (including its structure) ‘in good and substantial repair and condition’ by failing to replace dangerous ACM cladding. The court held that the landlord’s repairing obligations included ensuring the building was safe to use. The landlord also failed to meet its legal obligations under the Regulatory Reform (Fire Safety) Order 2005 (FSO) as the party responsible for the building’s exterior.

The tenant, Essendi, was entitled to close the hotel based on fire safety advice. The court ordered the landlord to replace the unsafe cladding within set deadlines and allowed the tenant to claim damages.

This case is interesting because the building was a commercial property not covered by the Building Safety Act 2022. While the case involved unusual facts, the decision highlights that lease repair obligations may, in certain circumstances, extend to remediation of building safety defects even where the building is not in ‘disrepair’. The court also considered the operation of the FSO and found that ACM cladding is a ‘dangerous substance’ for the purposes of the legislation.

Building Safety Levy (Amendment) (England) Regulations 2026

The government has made new regulations to amend the Building Safety Levy (England) Regulations 2025 (the Levy Regulations) and related building control regulations ahead of the introduction of the Building Safety Levy on 1 October 2026. The most significant amendment is to the definition of ‘previously developed land’ which is widened by the new regulations. This is significant because a 50% discounted levy rate is available for certain developments on ‘previously developed land’.

For a further discussion of the new regulations, see our recent Building Safety Levy update.

Second staircase requirements for new residential buildings

From 30 September 2026, new residential and mixed-use residential buildings in England over 18 metres in height will be required to include two independent staircases. The requirement is being introduced through amendments to Approved Document B.

The requirement will also apply to buildings under 18 metres where:

• there are flats that are not separated from the common stair by a protected lobby; or
• a maximum travel distance of 7.5 metres in one direction or 30 metres in multiple directions is exceeded.

An exemption applies under the transitional provisions where a building notice, initial notice, or full plans application was submitted before 30 September 2026. To benefit from the exemption, the development must be sufficiently progressed and the relevant building control authority notified by 30 March 2028; otherwise, the new requirement will apply.

Buildings under 11 metres: government announces new funding for remediation of unsafe cladding

The government has announced new funding through the Cladding Safety Scheme for eligible residential buildings under 11 metres in England. While such buildings are not considered high risk, funding will be available where a PAS 9980 assessment identifies unsafe cladding posing a serious fire safety risk. Funding will be prioritised according to risk, with the highest-risk buildings receiving priority. Applications open on 17 August 2026 and close eight weeks later. The application process is set out here.

Consultation response – improving proportionality in building control for higher-risk buildings

The government has published a response to its consultation on improving proportionality in building control for higher-risk buildings, confirming its intention to remove most building works carried out solely within residential units in HRBs from ‘Category A’ works (thereby reducing the Gateway documentation requirements). Note, proposals relating to small-scale works in communal areas require further consideration before any regulatory changes are made.

Exemption under the Building Act 1984 for telecommunications related building works to HRBs

In an effort to reduce the compliance burden, from 1 September 2026 certain telecoms-related works to HRBs will no longer require the usual building control procedural approvals. The exemption applies to limited works such as drilling small holes (25mm or less) for fibre optic cables and, in some cases, rooftop telecoms installations on HRBs. The relaxation is subject to conditions, including appropriate firestopping, competent installers, written approval from the relevant person and compliance with applicable product standards. These changes aim to alleviate pressure on the Building Safety Regulator and reduce delays – the key message is a move towards reducing administrative burdens while maintaining safety standards.

Building Safety Regulator (BSR) to revise approach to building assessment certificates

The Building Safety Regulator has announced it will revise its approach to the grant of building assessment certificates (BACs) for occupied higher-risk buildings (HRBs), moving to a more proportionate, intelligence-led and risk-based assessment regime. The proposed changes follow challenges experienced since the regime was introduced, including longer than anticipated assessment times, a high rate of certificate refusals, and difficulties faced by resident-led management companies and other duty holders in demonstrating compliance with the Building Safety Act 2022.

Under the revised approach, the BSR will focus initially on organisations responsible for multiple HRBs, undertake targeted interventions based on risk and intelligence, provide additional time and support for smaller resident-managed buildings, and prioritise applications already in progress. It also plans to introduce simplified assessment criteria, clearer technical guidance, and potential fast-track reassessments for previously refused applications.

Importantly, the legal obligations under the Building Safety Act 2022 remain unchanged meaning principal accountable persons (PAPs) and accountable persons must continue to manage building safety risks, maintain safety case reports, and comply with their ongoing duties.