Who Pays for Cladding Remediation in 2026? A Guide for Leaseholders, RTM Companies and Building Owners

When a residential building turns out to have unsafe cladding, the technical question — what needs fixing — is usually easier to answer than the financial one: who actually pays for it. The answer depends on when the lease was granted, who developed the building, the building's height, and whether government funding applies. For many qualifying leaseholders, the Building Safety Act 2022 already provides strong leaseholder cladding protection, capping or removing cladding remediation costs for leaseholders entirely. For RTM companies, freeholders and managing agents, the issue is often less about personal financial exposure and more about who organises, funds upfront and ultimately recovers the cost of the works. This guide sets out who is responsible for cladding replacement and cladding remediation funding across England under current law, and is clear throughout about what is settled versus what the Remediation Bill 2026 merely proposes.

Who Is Responsible for Paying for Cladding Remediation?

Liability generally follows a rough hierarchy, though the detail depends on each building's history and documentation. In broad order: the original developer, where traceable and in scope; the freeholder or landlord, who may face direct liability or need to fund works upfront; qualifying leaseholders, who are protected from cladding costs under the Building Safety Act 2022; and government funding, which can step in to get stalled projects moving. RTM companies and resident management companies usually take on the coordination role rather than personal financial liability — though, as explained below, the position depends on the building's specific structure.

Establishing who is responsible often starts with establishing exactly what was installed, by whom, and when.

Does the Building Safety Act 2022 Protect Leaseholders?

Yes, for leaseholders who meet the statutory "qualifying lease" test in section 119 of the Act. Broadly, a lease qualifies if it is a long lease of a single dwelling in a relevant building (11 metres or more / five storeys or more, with two or more dwellings), was granted before 14 February 2022, carries a service charge, and — at that date — the dwelling was the tenant's only or principal home, or the tenant owned no more than two other UK dwellings.

Where a lease qualifies, Schedule 8 of the Act is unconditional on one point: no service charge is payable for cladding remediation at all. For non-cladding defects and interim measures such as waking watch, contributions are instead capped — broadly £10,000 outside London or £15,000 in Greater London for lower-value flats, rising to £50,000 (£1–2 million properties) or £100,000 (over £2 million), spread over a maximum of ten years. Leaseholders who don't meet the qualifying conditions are not automatically protected, so lease terms and individual circumstances still matter.

When Must the Original Developer Pay?

Most major UK developers have signed the government's Developer Remediation Contract — a legally binding commitment to fix life-critical fire-safety defects in buildings of 11 metres or more that they developed or refurbished in England within the last 30 years, and to reimburse public funds already spent on their buildings through the Building Safety Fund or Cladding Safety Scheme.

The limits matter in practice: the contract only binds signatories, only covers buildings that can be shown to have been developed or refurbished by that company, and depends on the developer still existing and being solvent. Where a developer is insolvent, untraceable, or never signed, responsibility shifts to the freeholder, to recovery action such as a Remediation Contribution Order, or to government funding — covered in the next two sections.

What Is the Cladding Safety Scheme?

The Cladding Safety Scheme (CSS) is government funding, administered through Homes England, for eligible cladding remediation on residential buildings that fall outside other funding routes. A PAS 9980 fire risk appraisal of external walls is generally needed first to confirm the risk and define the scope of eligible works; the Responsible Entity — typically the freeholder, RMC or RTM company — applies and usually pays upfront, with costs potentially reimbursed if the building is confirmed eligible. Our dedicated FRAEW & Cladding Safety Scheme FAQ covers eligibility and the application process in full.

Do RTM Companies Have to Pay for Cladding Remediation?

It's important to separate organisational responsibility from financial liability. An RTM company commissioning a FRAEW, running a funding application or coordinating a contractor is doing its management job — that isn't the same as the company being personally out of pocket for the works.

Because an RTM company typically didn't develop the building, it doesn't usually carry the original developer's primary liability. It can, however, be treated as "the landlord" for service-charge purposes, meaning it cannot pass cladding costs to qualifying leaseholders and instead has to look to the developer, government funding, or other recovery routes to fund the work — which is a genuine cash-flow and timing issue for volunteer boards even where the company isn't ultimately liable for the cost itself. Whether your RTM company's specific structure creates any direct liability is a question for your own legal advisers, not something to assume either way.

What Happens When the Freeholder Cannot Afford Remediation?

The Building Safety Act 2022 already gives the First-tier Tribunal (Property Chamber) two relevant powers. A Remediation Order compels a landlord to carry out specified remediation work. A Remediation Contribution Order (RCO) compels a landlord, former landlord, developer, or an "associated" company or individual to pay towards the cost. Either can be applied for by an "interested person" — which can include a resident, leaseholder or enforcement authority — and the Tribunal decides on a "just and equitable" basis. RCOs exist specifically to stop a freeholder sheltering behind an insolvent or shell company.

Government funding through the CSS or BSF can also get a stalled project moving where recovery action would otherwise take too long, though using it doesn't resolve the underlying question of who is ultimately liable.

Who Pays for a Fire Risk Appraisal of External Walls (FRAEW)?

In practice, the Responsible Entity usually commissions and initially pays for the FRAEW, with costs potentially reimbursed later if the building is confirmed eligible for CSS or BSF funding. Whether that upfront cost can be passed to leaseholders through the service charge depends on the lease and the leaseholder's qualifying status — and Schedule 8 also blocks qualifying leaseholders being charged for the legal or professional costs of establishing who is liable for a defect, not just the remediation itself.

What About Buildings Under 11 Metres?

Buildings below roughly 11 metres or five storeys generally fall outside the Act's "relevant building" definition, so Schedule 8's leaseholder protections and the main CSS/BSF routes don't automatically apply. A separate, narrower government fund exists for buildings under 11 metres with a confirmed cladding risk — see our dedicated guide to funding for buildings under 11 metres. With less statutory protection in place, getting early, building-specific advice matters more for these buildings, not less.

What Does the Remediation Bill 2026 Mean for Building Owners?

The Building Safety (Remediation of Unsafe Cladding etc) Bill 2026-27 is not yet law — see our full guide to the Remediation Bill 2026 for its status and detail. On funding specifically, it proposes to raise the leaseholder-protection ownership threshold from three to six UK properties, add funding support for collectively owned buildings without a separate freeholder, expand powers to recover costs from construction product manufacturers, and let a regulator take over a stalled project through a Remediation Management Order and recover its costs from the responsible entity. These would add to, not replace, the funding and liability picture described above — and may change before, or if, the Bill is enacted.

What Should RTM Companies and Managing Agents Do Next?

1. Confirm whether the building is a "relevant building" — 11 metres or more, or five storeys or more, with two or more dwellings.
2. Work out which leaseholders are likely to meet the qualifying lease conditions under section 119.
3. Check whether the original developer is known, traceable, and a signatory to the Developer Remediation Contract.
4. Confirm whether a FRAEW already exists, and who commissioned and paid for it.
5. Review CSS or BSF eligibility before assuming leaseholders or the service charge must fund the works.
6. Keep clear records of decisions, correspondence and costs — useful for funding applications and any future Tribunal application.
7. Take independent legal advice before billing any leaseholder for remediation-related costs.

How Wrightwood Consulting Can Help

Wrightwood is an independent building safety consultant and cladding remediation project manager, not a law firm. We help RTM companies, managing agents and freeholders work through the practical funding picture: reviewing what's already known, coordinating independent fire engineers and legal advisers where needed, managing CSS and BSF applications, and providing client-side project management through to completion. We appoint and manage specialists on our clients' behalf rather than carrying out assessments ourselves.