The Essendi UK Hotels 2 Ltd v London Property Company Ltd ruling quietly, but decisively, reset the fire‑safety obligations for hotels. Even though hotels remain outside the Building Safety Act’s higher‑risk building regime, in June 2026 the court confirmed that dangerous cladding on a hotel is not merely a maintenance issue, it is a fire safety breach that can trigger landlord obligations, enforcement, litigation, and mandatory remediation.

This case creates a new commercial issue: hotel owners and managers who fail to review their external walls now face legal exposure, operational disruption, and reputational risk, with no government remediation scheme to fall back on.

Why this case matters: The court looked beyond the Building Safety Act

Existing hotels are excluded from the Building Safety Act’s HRB regime. That means:

  • No mandatory registration with the Building Safety Regulator (BSR)
  • No gateway regime
  • No statutory remediation pathway for unsafe cladding

Many hotel operators have taken comfort from this. The Essendi case removes that comfort entirely.

What happened?

The Ibis London Wembley hotel contained Category 3 ACM cladding with a combustible polyethylene (PE) core, the same class of material implicated in the Grenfell fire.

The landlord argued that its obligation to keep the building in “good condition” meant physical repair only. The court disagreed. “Good condition” now includes fire safety suitability in a post‑Grenfell context.

If the external wall system creates an unacceptable fire risk, the building is not in good condition, even if the façade is intact and watertight.

This is a major shift. It means fire safety deficiencies in external walls can now trigger contractual obligations, not just regulatory ones.

The Fire Safety Order (FSO) is now central to hotel external wall liability

The most significant part of the judgment is the court’s treatment of the Regulatory Reform (Fire Safety) Order 2005.

Hotels are unique in the sense that operators manage guests, staff, evacuation, alarms, drills, and landlords often retain control over the structure, façade, and external walls.

The court held that both parties may be “responsible persons” under the FSO.

The critical finding though, is that Article 12 of the Fire Safety Order applies to combustible cladding.  Article 12 requires responsible persons to eliminate or reduce risks from dangerous substances and the court ruled that the combustible PE core within ACM cladding is a dangerous substance.

Because the PE core cannot be removed without removing the cladding system, the only way to reduce the risk was to remediate the external wall system itself. The judge ordered specific performance requiring the landlord to complete the works within 18 months.

This is unprecedented for hotels.

Why this has far‑reaching implications for the hotel sector

Hotels now face a de facto external wall safety regime, without the BSA; even though hotels are not HRBs, the court has effectively created a judicially‑imposed remediation duty, a fire‑safety‑based definition of “good condition,” and a structural obligation under the FSO.

This means unsafe cladding on hotels is no longer a “risk to be managed”. It is a risk that must be removed.

Landlords and operators can both be liable – the judgment made clear:

  • Operators cannot assume landlords will deal with external walls.
  • Landlords cannot assume operators bear all fire safety duties.

This creates shared liability, increasing the likelihood of disputes, enforcement, and litigation.

Insurers will react. With this in mind, the sector should expect:

  • Higher premiums
  • More exclusions
  • Mandatory external wall assessments
  • Requirements for PAS 9980‑aligned reports

Insurers will most likely use this case to justify stricter underwriting.

Local fire authorities may escalate enforcement – the FSO now clearly applies to combustible cladding on hotels. Again, the sector should expect local fire and rescue services (LFRS) using their arsenal of enforcement options from enforcement and prohibition notices or even mandatory remediation orders. LFRS’s have been waiting for a case like this.

No government funding route – unlike residential HRBs there is no BSF, no remediation fund and no developer pledge.  Hotel owners must self‑fund remediation.

What commercial hotel managers and owners must do now

Commission an External Wall Assessment: even though PAS 9980 was written for residential buildings, its fire‑engineering logic, risk‑evaluation methodology, and structured assessment framework make it one of the most effective tools available for analysing external wall systems in hotels. The Essendi judgment reinforces this: courts now expect a competent, systematic, evidence‑based approach to external wall risk. PAS 9980 provides exactly that.

Clarify FSO responsibilities between landlord and operator: define who controls the following areas, and use a responsibility matrix to avoid disputes and ensure that the matrix is agreed by all parties:

  • Structure
  • Façade
  • External walls
  • Fire strategy
  • Evacuation procedures

Strengthen your Fire Risk Assessment (FRA) to explicitly cover external wall risk: your FRA must now explicitly consider the fire performance of the external wall system because the Essendi judgment confirms that combustible cladding can constitute a dangerous substance under the Fire Safety Order (FSO). Even though hotels are not subject to the Building Safety Act’s HRB regime, the FSO does apply, and Article 12 requires responsible persons to eliminate or reduce risks from dangerous substances so far as reasonably practicable.

For hotels, this means the FRA can no longer focus solely on internal fire precautions, evacuation strategy, alarms, and management systems. It must now:

  • Identify any combustible materials within the façade or cladding system
  • Assess how those materials could contribute to external fire spread
  • Evaluate the impact on evacuation, compartmentation, and life safety
  • Consider whether the risk can be reduced through management measures or whether physical remediation is required
  • Document the rationale for decisions, demonstrating a competent, evidence‑based approach

This shift is essential because the FRA is THE primary legal instrument through which hotel operators and landlords demonstrate compliance with the FSO. A failure to assess external walls within the FRA could expose both parties to:

  • Enforcement action from fire authorities
  • Insurance challenges or exclusions
  • Civil claims from guests, staff, or operators
  • Contractual disputes between landlord and tenant
  • Court‑ordered remediation, as seen in Essendi

A robust FRA that incorporates external wall risk is now a core compliance requirement, not an optional enhancement. It is also a powerful commercial tool: demonstrating proactive risk management to insurers, investors, brand owners, and regulators.

Prepare for insurer scrutiny: develop a remediation plan that demonstrates proactive risk management.

Engage early with fire authorities: proactive engagement reduces enforcement risk and demonstrates due diligence.

The Essendi judgment is the first clear judicial statement that:

  • Unsafe cladding on hotels is not just a building defect, it is a fire safety breach requiring remediation.
  • Hotels may be outside the BSA, but they are now firmly inside a new legal and commercial reality where:
    • External walls must be assessed
    • Dangerous cladding must be removed
    • Landlords and operators share liability
    • Courts will enforce remediation
    • Insurers will demand action

This is the moment for hotel owners and managers to act decisively.