Dealing with the TA7: Tips and traps for residential conveyancers

The TA7 form was updated in January 2023 and was in use from the 14^th February 2023. What is it with Valentines Day  and the Building Safety Act 2022? I don’t know any conveyancers who are dealing with transactions with BSA 2022 issues that are “feeling the love” currently.

The purpose of this article is to explore how conveyancers acting for the seller or buyer should deal with the questions in the new TA7.

So what are the problems?

• The TA forms including the TA7 were created as part of the Conveyancing Protocol  on the basis that the seller(s) would complete the forms with the minimum of advice from the solicitor or conveyancer acting on their behalf.
• The seller(s) should answer the questions in the TA forms as completely and honestly as possible.
• As has been seen in numerous cases including most recently the case of Rosser v Pacifico Ltd [2023] EWHC 1018 (Ch) and earlier the unreported Japanese knotweed case of Downing v Henderson (2022) in the Central London County Court a seller is vulnerable to a claim for misrepresentation in its various guises if an answer to a question in a TA form is incorrect.
• The revised TA form includes questions in Section 11 on the BSA 2022 using terminology which a seller is unlikely to have encountered and may well not understand such as remediation works, qualifying lease, leaseholder deed of certificate, notification of intention to sell, landlord certificate.
• Even where the seller client is aware of the terminology used in the previous bullet point they may not be aware of that terminology as used in the BSA 2022 or accompanying regulations.

What can a solicitor or conveyancer do?

I suggest it is necessary to explain to seller and buyer alike the terminology so lets start with the most difficult first.

• Remediation works

An important point to note is that the remediation works which the seller is asked about is not limited to remediation works for relevant defects as defined under the Building Safety Act 2022 even though Section 11 of the form was introduced to deal with Building Safety Act 2022 issues. Assuming the seller needs assistance to understand what are remediation works are what can be done. A dictionary definition of remediation works may assist investigating, monitoring, removing, remedying, cleaning up, abating, containing, preventing, treating, mitigating, or ameliorating.

There is no direct definition of remediation works under the BSA 2022. Instead we need to look at relevant defects and then assume remediation costs relate to remediation of relevant defects. What can the seller be told about relevant defects? Some assistance is provided in the Guidance from the Department of Levelling Up, Community  on the 21^st July 2022 which states:

“4. For a defect within a building to be defined as a ‘relevant defect’, it must meet all of the following criteria:

1. it puts people’s safety at risk from the spread of fire, or structural collapse
2. it has arisen from work done to a building, including the use of inappropriate or defective products, during its construction, or any later works (such as refurbishment or remediation)
3. it has been created in the 30 years prior to the leaseholder protections coming into force (meaning the defect had to be created from 28 June 1992 to 27 June 2022), and
4. it relates to at least one of the following types of works:

• the initial construction of the building,
• the conversion of a non-residential building into a residential building, or
• any other works undertaken or commissioned by or on behalf of the building owner (the definition of ‘building owner’ can be found in What are my building owner’s legal obligations?), or management company.

5. Work done before or after 28 June 2022 to remediate a relevant defect that was itself created during one of the above pieces of work is also covered by the leaseholder protections.

      6. Defects that have arisen in relation to professional services are also covered by the definition of relevant defect. This would include, for example, if an architect or building designer specified the inappropriate use of flammable materials on a building and the contractor followed those designs.

7. This definition of relevant defect covers work needed to put right and ease historical building safety issues, but not, for example, wear and tear or routine maintenance.”

It might be possible to paraphrase some of the guidance or to extract key phrases to give the seller client some idea as to what the question is seeking with points 6 and 7 being particularly useful .

Given that we do not have a definition of remediation works we are left with attempting to explain remediation works by referring to relevant defects under the Building Safety Act Section 120(2) which states:

“(2)“Relevant defect”, in relation to a building, means a defect as regards the building that—

(a)arises as a result of anything done (or not done), or anything used (or not used), in connection with relevant works, and

(b)causes a building safety risk.

(3)In subsection (2) “relevant works” means any of the following—

(a)works relating to the construction or conversion of the building, if the construction or conversion was completed in the relevant period;

(b)works undertaken or commissioned by or on behalf of a relevant landlord or management company, if the works were completed in the relevant period;

(c)works undertaken after the end of the relevant period to remedy a relevant defect (including a defect that is a relevant defect by virtue of this paragraph).

“The relevant period” here means the period of 30 years ending with the time this section comes into force.

(4)In subsection (2) the reference to anything done (or not done) in connection with relevant works includes anything done (or not done) in the provision of professional services in connection with such works.

(5)For the purposes of this section—

• “building safety risk”, in relation to a building, means a risk to the safety of people in or about the building arising from—

(a)

the spread of fire, or

(b)

the collapse of the building or any part of it;

• “conversion” means the conversion of the building for use (wholly or partly) for residential purposes;
• “relevant landlord or management company” means a landlord under a lease of the building or any part of it or any person who is party to such a lease otherwise than as landlord or tenant. “

We could explain to the seller client that remediation works are works to remediate relevant defects.

The only other help we can have with regard to remediation works can be found in Section 20 Landlord and Tenant Act 1985 which provides  –

Limitation of service charges: remediation works

(11)In this section—

• “remediation costs” means costs incurred or to be incurred in carrying out the remediation works;

This section does not really take us any further in that remediation costs are defined as costs incurred or to be incurred in carrying out the remediation works but the latter is not defined.

Finally we have the BSA 2022 itself and Section 120 which contains a definition of relevant defect:

“Section 120 Meaning of “relevant defect”

(1)This section applies for the purposes of sections 122 to 125 and Schedule 8.

(2)“Relevant defect”, in relation to a building, means a defect as regards the building that—

(a)arises as a result of anything done (or not done), or anything used (or not used), in connection with relevant works, and

(b)causes a building safety risk.

(3)In subsection (2) “relevant works” means any of the following—

(a)works relating to the construction or conversion of the building, if the construction or conversion was completed in the relevant period;

(b)works undertaken or commissioned by or on behalf of a relevant landlord or management company, if the works were completed in the relevant period;

(c)works undertaken after the end of the relevant period to remedy a relevant defect (including a defect that is a relevant defect by virtue of this paragraph).

“The relevant period” here means the period of 30 years ending with the time this section comes into force.

(4)In subsection (2) the reference to anything done (or not done) in connection with relevant works includes anything done (or not done) in the provision of professional services in connection with such works.

(5)For the purposes of this section—

• “building safety risk”, in relation to a building, means a risk to the safety of people in or about the building arising from—

(a)

the spread of fire, or

(b)

the collapse of the building or any part of it;

• “conversion” means the conversion of the building for use (wholly or partly) for residential purposes;
• “relevant landlord or management company” means a landlord under a lease of the building or any part of it or any person who is party to such a lease otherwise than as landlord or tenant”.

The Department of Levelling Up Communities and Housing provides yet more guidance confirming that, for a defect to be covered by the duty imposed on the landlord under the BSA, it must meet all of the following criteria:

• it puts people’s safety at risk from the spread of fire, or from structural collapse
• it has arisen from work done to a building, including the use of inappropriate or defective products, during its construction, or any later works (such as refurbishment or remediation)
• it has been created in the 30 years prior to the leaseholder protections coming into force (meaning the defect had to be created from 28 June 1992 to 27 June 2022)
• it relates to at least one of the following types of works:
  • the initial construction of the building
  • the conversion of a non-residential building into a residential building
  • any other works undertaken or commissioned by or on behalf of the building owner, or management company

To conclude the seller should be told what remediation costs could include by referring to the dictionary definition of remediation and by extracting from the legislation and government guidance what remediation costs could include.

What about information in the LPE1?

The landlord might provide information concerning remediation works or the potential for remediation works in the LPE 1. If this is the case the seller should report what the landlord has revealed.

Where the  landlord provides in the LPE 1 a Landlord Certificate or other documentation information concerning remediation works then that information should be transmitted to the buyer in the replies to the relevant question in the TA form.

• Landlord Certificate

The next term we need the seller client to understand is the landlord certificate which is should not be as problematical for the seller. The certificate is required under The Building Safety (Leaseholder Protections) (England) Regulations 2022. A landlord certificate is necessary where a flat or apartment is within a relevant building which exceeds 11 metres in height or exceeds five storeys and is required where a landlord wishes to transmit remediation costs into service charge, when a leaseholder is selling, when leaseholder requires it, or when service charge demand is made relating to remedial work.

Hopefully the seller will have this certificate and so there should not be a problem but two things are important for both the seller and buyer. Firstly if the seller has notified the landlord that the flat or apartment is being sold when was the landlord notified. Secondly when did the landlord respond. Remember for the landlord certificate to be valid it must be provided within four weeks of the date of request. If not the certificate is not valid and any remediation costs for relevant defects will not be recoverable assuming the lease being sold is a qualifying lease in a relevant building.

An additional enquiry should be made by the buyer in connection with these two dates if not provided by the seller.

• Leaseholder Deed of Certificate

The existence of a leaseholder deed of certificate should not generate a problem. Hopefully the seller client will have instructed a solicitor or conveyancer  in good time before a sale is agreed to enable a leaseholder deed of certificate to be prepared. The landlord should be notified of the sale and the landlord certificate awaited. Once a landlord certificate is produced the seller should send the leaseholder deed of certificate to the landlord and a further copy provided to the buyer’s conveyancer in the contract bundle. Where the landlord certificate is not produced within four weeks of request it is best that the leaseholder deed of certificate is not produced as Para. 13 of Schedule 8 of the BSA applies to the advantage of the buyer. Remember Para. 13 states:

• This paragraph applies in relation to a lease that meets the conditions in paragraphs (a) to (c) of section 119(2) and if the presumption applies means the lease is a qualifying lease even if condition (d) of S119(2) is not met.

(2)      The lease is to be treated for the purposes of this Schedule as a qualifying lease unless—

              (a) the landlord under the lease has taken all reasonable steps (and any prescribed steps) to obtain a qualifying lease certificate from a tenant under the lease, and

              (b) no such certificate has been provided to the landlord.

(3) In this paragraph “qualifying lease certificate” means a certificate, complying with any prescribed requirements, that the condition in section 119(2)(d) was met in relation to the lease at the qualifying time…

The effect of this provision is that if the landlord has not asked for a leaseholder deed of certificate and does not have the leaseholder deed of certificate Schedule 8 protection applies whether condition d of Section 119(2) BSA (the ownership occupation condition for a qualifying lease is met or not)

The leaseholder deed of certificate will include the following information:

• The name of the person providing the certificate
• The address of the dwelling that the certificate relates to
• The name of the leaseholder on 14th February 2022.
• Where the lease was sold on the open market before 14th February 2022 evidence of the most recent sale from before that date, an official copy of the register of title showing the date of the sale in question, and evidence of the price paid when the sale was completed.
• Evidence to show that the dwelling was at the 14.2.22 the leaseholder’s only home (where the leaseholder only owned and resided in this property) or principal home (where the leaseholder owned more than three UK properties, but resided in the property). That evidence could include a Council Tax bill, a utilities bill or a bank statement to demonstrate residence at the property.
• Where the dwelling was owned under a shared ownership lease at the beginning of 14th February 2022, the seller must provide a copy of the shared ownership lease,
  and evidence of the percentage share under the shared ownership lease held on that date.

The solicitor or conveyancer for the seller should deal with the information in the leaseholder deed of certificate in the same way as dealing with information provided by the seller in the TA forms warning the seller to complete the certificate carefully and accurately and warning the seller of the danger of misrepresentation if the information in the certificate is not correct.

The seller should be warned that where the landlord requests a leaseholder deed of certificate it should be produced as soon as possible. Where there are difficulties in producing the certificate the landlord should be notified. Provided extensions of time are sought a leaseholder has up to 12 weeks to produce the certificate.

Normally it the leaseholder deed of certificate will be produced by the seller in readiness for a sale of the relevant property which should be passed on to future lessees through the conveyancing process.

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For more information on the issue of the content of the landlord certificate and leaseholder deed of certificate there is a brilliant article written by Andrew Butler KC called A proliferation of certification: the impact of Part 5 & Schedule 8 of the Building Safety Act 2022 for landlords and managing agents dated 11th May 2023 available on the website of Tanfield Chambers and for more information on acting for leaseholders IQ Legal Training Limited has produced flowcharts for practitioners and an information sheet for dealing with TA 7 when acting for sellers and buyers. Contact info@iqlegaltraining.com for more information.