Is the Building Safety Act frustrating?

On 21st May 2026, the High Court ruled that a long-term commercial lease of student accommodation had not been frustrated, despite serious fire safety defects and the subsequent introduction of the Building Safety Act 2022 (“BSA”) rendering the building unfit for its intended use.  The Court granted summary judgment to the landlord for substantial rent arrears, rejecting the tenant’s attempt to rely on the doctrine of frustration.

Factual background

The case concerned Voyager House in Brighton (“the Premises”), a purpose-built educational facility comprising teaching space and student accommodation.  In 2007 the Premises were let under a 25-year lease (“the Lease”) for use as a residential training school. 

Investigations carried out in 2022 revealed serious and widespread fire safety defects, including combustible materials in the external walls and inadequate fire stopping.  Expert evidence indicated that these defects rendered the buildings unsafe for occupation and that extensive remedial works would be required, likely taking several years to complete. 

As a result, the premises were no longer capable of being used for their intended purpose and were unlikely to be usable for that purpose for the remainder of the Lease term. 

Background to the proceedings

The landlord brought a claim for rent arrears of over £9 million under the Lease.  The tenant and its guarantor defended the claim on the basis that the Lease had been frustrated. 

The tenant argued that the discovery of life-critical defects, together with changes in the regulatory landscape following the Grenfell Tower disaster (such as the BSA), meant the premises could no longer be safely used for their intended purpose.  This, it said, fundamentally altered the nature of the parties’ obligations under the Lease. 

The landlord applied for summary judgment, contending that the defence of frustration had no real prospect of success.  In response, the tenant argued that frustration in this context raised a controversial and developing issue of law, which should be determined at trial. 

The Court rejected that submission and proceeded to determine the issue on a summary basis, finding that the defence was not realistically arguable. 

Frustration of leases

A frustrating event, as restated by Lord Simon in National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675, must:

• occur after the contract has been formed;
• be so fundamental that it strikes at the root of the contract and goes beyond what the parties contemplated when entering the agreement;
• not be due to the fault of either party; and
• render performance impossible, illegal or radically different from what was originally agreed.

Where frustration is established, the contract is automatically discharged and the parties are released from their future obligations.

In National Carriers, the House of Lords confirmed that the doctrine of frustration can, in principle, apply to leases. However, despite this recognition, there are no reported cases in England where a lease has actually been held to be frustrated. This is despite various previous attempts by tenants to escape liability under leases by relying on the doctrine of frustration and similar arguments – particularly during the Covid-19 pandemic. 

The Decision

Against that legal backdrop, the Court had little difficulty rejecting the tenant’s frustration argument.  The key question was whether the discovery of serious fire safety defects, together with the post-Grenfell regulatory landscape, had rendered performance of the lease “radically different” from what the parties had agreed.

The Court held that it had not.  Central to that conclusion was the allocation of risk under the lease.  The tenant had assumed a wide repairing obligation, including an obligation to rebuild the premises if necessary, and was required to comply with all statutory requirements affecting the property.  The landlord, by contrast, had given no warranty as to the suitability of the premises for the tenant’s use.

Importantly, the Agreement for Lease also included a defects liability period, demonstrating that the parties did not assume the premises would be defect-free and had contemplated the risk of defects arising.

The Court also rejected the argument that the BSA fundamentally altered the position, suggesting that although the legislation places a greater focus on remediation, it does not change the underlying obligation that buildings must be safe for occupation.

In those circumstances, the tenant could not show that the lease had been rendered radically different.  Consistent with the high threshold identified in National Carriers and subsequent authorities, the lease was not frustrated. For now at least, the Building Safety Act is not frustrating leases. 

If you have any questions or wish to discuss any of the issues raised in this article, please reach out to James Sutherland, Rob Bailey or your usual Burges Salmon contact.

Written by Katie Matthews, Rob Bailey and James Sutherland.

Before the legislative changes remedial works to deal with the fire safety issues were necessary if the Premises were to be used for educational purposes. Whilst as a matter of generality the legislative provisions relied upon have had a significant impact, they have not changed that fundamental point as far as SGUK is concerned.