Dr Christy Burzio secures an important finding on appeal for her client in an important decision regarding a management company’s right to replace balcony structures across a major London development

Dr Christy Burzio achieved an important success in an appeal which will be of particular interest to practitioners dealing with fire safety risks in blocks which require wholesale works, in Holy v Brentford Lock Island Residents’ Association Limited [2026] UKUT 44 (LC).

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The case is significant as it,

1. Clarifies the distinction between demised balcony surfaces and structural balcony components in residential leases,
2. Confirms that a management company may replace building elements wholesale, even where not all elements are in immediate disrepair,
3. Addresses fire safety and marketability considerations affecting residential developments following the Grenfell Tower tragedy, and
4. Provides structured guidance on analysing repair covenants using a five-stage approach.

Background

The development (‘Brentford Lock’), comprises six new residential blocks, each of five storeys, and 20 separate houses. The residential blocks contain 173 flats, all of which were let on the same terms. 124 flats have balconies of various sizes.

Brentford Lock was constructed in accordance with the prevailing building regulations at that time, but since July 2022 the balconies must achieve certain fire safety ratings which, in effect, excluded the use of timber components. This reflects the increased concern about the risk of fire since the Grenfell Tower tragedy. Such blocks are often regarded with some suspicion by insurers, purchasers and mortgage lenders.

In October 2024, a survey of the balconies was undertaken that showed that 15% (19 of 124) were in poor condition and 3 had been replaced as part of the test programme. The balconies were all in varying states of disrepair.

The management company sought the replacement of all balconies in a comprehensive programme of works which was objected to by one lessee, Ms Holy.

Whilst the appeal was underway the management company undertook a limited programme of repairs for the most seriously damaged balconies with new timber flooring.

The Issue

Did a management company’s repairing covenant in leases of flats at Brentford Lock entitle it to replace the timber flooring of the flats’ balconies with new flooring made of non-combustible material although only 15% of the balconies were in immediate need of repair?

The Simple Issue: The extent of the demised premises of the balconies

The demise included: ‘“ALL THAT apartment (together with the floor surface only of any balcony or patio co-extensive therewith (if any) and the air space above such balcony or patio to a height of one storey above the surface thereof) being Plot 130 … (EXCEPTING AND RESERVING from the demise the main structural parts of the Building including the roof space (unless such roof space forms part of this demise) foundations and the external parts)”

The UT found that the only part of the balcony which is included in the demise was the ‘floor surface only’ and the airspace above it. The reference to ‘floor surface’ does not mean the whole of the timber floor, it means only the surface, the uppermost two-dimensional face having length and breath but no depth. Had the parties intended that the whole of the floor was to be demised, including the whole of the timber planks, they need have said no more than ‘the floor’.

The management company was therefore responsible for repairing and where necessary replacing the balcony flooring.

The Complex Issue: Is the Management Company Entitled to Replace all of the Balcony Floors?

The UT has helpfully laid out an important and practical five-stage test where management companies are considering wholesale works to address both disrepair and important fire safety risks.

Question 1: What is the physical subject matter of the covenant?

Question 2: Is the subject matter of the covenant in a damaged or deteriorated condition?

Question 3: Is the nature of the damage or deterioration such as to bring the condition of the subject-matter below the standard contemplated by the covenant? It is necessary to ask whether such damage or deterioration results in the premises not being in a state and condition that the parties contemplated they should be in. (see, Proudfoot v Hart (1890) 25 QBD 42)

Question 4: What work is necessary in order to put the subject-matter of the covenant into the contemplated condition? Whilst the management company, whose obligation it is to carry out the works, is entitled to choose which method to adopt, this is caveated as the lessee’s are responsible for paying for the same, and as such the choice must be a reasonable one. (see Fluor Daniel Properties Ltd v Shortlands Investments Ltd [2001] 2 EGLR 103).  Factors important to this question,

‘the relative cost of the different approaches, the condition and life-expectancy of the timber floors, the number which are likely to need some work in the relatively near future compared to those which are unlikely to require replacement for many years, the practicality and relative convenience or inconvenience of a comprehensive programme on the one hand and a reactive or intermittent approach on the other, the duration of the leases, and the views of the Lessees themselves. It would also be permissible for the Management Company to have regard to any beneficial effect of complete replacement on the marketability, mortgageability and value of the flats.’

Question 5: Is that work nevertheless of such a nature that the parties did not contemplate that it would be the liability of the covenanting party?

Conclusion

The decision provides important guidance on the interpretation of lease covenants, repair obligations and the recoverability of wholesale major works through service charges, particularly in the context of post-Grenfell fire safety considerations. It is now a leading decision on the same.