The introduction of Leaseholder Deeds of Certificate and Landlord’s Certificates on 20th and 21st July, 2022 will change the way residential flats are bought or sold in buildings at least 11 metres high or with at least five storeys.
The purpose of the Leaseholder Deed of Certificate [introduced by the Building Safety (Leasehold Protections)(Information etc)Regulations 2022] is to help ground-landlords and building-managers identify which leases qualify for the maximum protection under Schedule 8 of the Building Safety Act 2022, which limits the amount which can be recharged to residential leaseholders for works involving the replacement of defective wall insulation and associated building-safety risks. Whilst a Leaseholder Deed of Certificate can be provided to a ground-landlord at any time, a leaseholder who fails to provide that certificate when asked to do so, could lose valuable rights.
A lease qualifies for the maximum protection against remediation-costs only if, on 14 February, 2022, the flat was either in owner-occupation or was owned by someone who did not own more than three UK properties in total on that date.
It is now the Leaseholder Deed of Certificate which will provide the permanent record as to how the flat was owned or occupied on 14 February, 2022, which is the critical reference date for the purposes of Schedule 8. As its name suggests, the document has to be executed as a deed. It is also, largely, a self-certification exercise, in which the leaseholder answers a number questions which will enable the landlord to assess whether the particular lease qualifies or not. The questions include: whether the flat was are owner-occupied on 14 February 2022; if the flat was not owner-occupied, whether the leaseholder owned more than two other UK properties; the price at which the flat was last sold before 14 February, 2022; whether it is a shared ownership lease and, if so, the total share owned by the leaseholder as at 14 February, 2022. As well as answering the questions, the leaseholder must also provide documentary evidence supporting the answers provided. Where the leaseholder completing a Deed of Certificate was not the owner of the flat on 14 February, 2022 and does not already have the required information, it is then incumbent on that leaseholder to make enquiries of the former leaseholder to establish the qualifying status of the flat on 14 February, 2022.
What protections does qualifying status offer?
- A qualifying leaseholder is protected completely against the costs of remediating flammable cladding in circumstances where the inherent defect resulted from the original construction of the building within the previous 30 years or later refurbishment.
- Both qualifying and non-qualifying leaseholders are protected against the costs of remediating both cladding and non-cladding related fire-risk, in circumstances where the ground-landlord was also the developer of the building or carried out a later refurbishment or was responsible for commissioning the works within the previous 30 years.
- A qualifying leaseholder has complete protection against the costs of remediating both cladding and non-cladding fire-risk in circumstances where, on 14 February, 2022, the ground-landlord had a net-worth of more than £2,000,000 per relevant building.
- A qualifying leaseholder has limited protection against the costs of remediating non-cladding safety-defects in circumstances where the ground-landlord’s net-worth per relevant building on 14 February, 2022 was less than £2,000,000. In those circumstances, each qualifying residential leaseholder can be required to contribute a capped amount of £15,000 in greater London and £10,000 elsewhere. That cap is set at zero for properties worth less than £325,000 in London or £175,000 elsewhere. For properties worth more than £1,000,000, the cap is £50,000. If the property is worth over £2,000,000, the cap is £100,000. There are also special rules apportioning liabilities in shared-ownership properties. In all cases, payment of the capped costs can be spread over 10 years.
The Landlord Certificate
If it is the Leaseholder Deed of Certificate which evidences whether a lease is a qualifying lease for the purpose of Schedule 8, it is the Landlord Certificate, [introduced by the Building Safety (Leaseholder Protections) (England) Regulations 2022}, which contains information needed to calculate how much the landlord is entitled to charge for building-safety works. The ground-landlord must provide the leaseholder with a Landlord Certificate in any of the following circumstances:
- When they want to pass on any remediation-costs onto a leaseholder through the service-charge.
- Within four weeks from receiving notification from a leaseholder that their interest is to be sold.
- Within four weeks of the landlord becoming aware of a relevant defect which was not covered by a previous Landlord Certificate.
- Within four weeks of the leaseholder requesting a Landlord Certificate.
Information to be contained in the Landlord Certificate includes: the name and address of the relevant landlord on 14 February, 2022; the name and address of the current landlord; names and addresses of any superior relevant landlords; information concerning the net-worth of the landlord on 14 February, 2022; questions as to whether the landlord was in any way responsible for the relevant defect or the commissioning of that work; any works previously taken to remedy relevant defects and amounts paid for that work.
Practical points
- As memories fade, it is important that leaseholders are encouraged to prepare Leaseholder Deeds of Certificate providing a permanent record of how the flat was owned or occupied on 14 February, 2022, and the price at which it was last sold before that date. it is also a complex document on which many leaseholders will require legal advice when completing it.
- Any conveyancer acting on the prospective-sale of a flat to which Schedule 8 might apply, should ask whether there is a Leaseholder Deed of Certificate already in existence. If not, to recommend that a Deed of Certificate be prepared.
- Similarly, a buyer’s conveyancer should enquire about the existence of a Leaseholder Deed of Certificate before contracts are exchanged.
- When notifying a ground-landlord that a flat is to be sold, the Seller’s conveyancer should ask the ground-landlord to provide a Landlord Certificate, as required by law. Again, this Landlord Certificate will become part of the permanent record for the purposes of Schedule 8.
V. Charles Ward Solicitor and Legal Writer.
23 Responses
Very useful summary. I shall distribute this to my tenants asap and provide them a draft certificate. But it feels very tick box and it feels like sticking plaster in this Governments typical too little too late style. My leaseholders are not affected by the disaster but I bet they’ll be asked for these certificates. Haward
It’s these paragraphs that has me concerned:
1. When they want to pass on any remediation-costs onto a leaseholder through the service-charge.
3. Within four weeks of the landlord becoming aware of a relevant defect which was not covered by a previous Landlord Certificate.
Does this mean the Landlord gets more than one bite at the cherry but they won’t be able to if a Leaseholder’s Certificate has been served on them? (Confirming that the Leaseholder is a Qualifying Leaseholder on 14.02.22?)
My landlord is refusing to supply this and so I am unable to sell y flat. I notice you state the landlord needs to provide the Landlord Certificate, as required by law. What are the implications/actions for a landlord who refuses to comply? I cannot find anything anywhere.
I’m having exactly the same issue. My deal fell through because of this. Anybody know what to do when leaseholder refuses to give the certificate???
Did you get any advise on this as my landlord is also refusing to provide a landlord certificate
I am a buyer and while the seller’s landlord stated that remediation is not required (issuing the EWS1 certificate), my solicitor keep asking the Deed of Certificate. And the transaction is stalled. How to solve the issue?
We too are buyers and our solicitor has requested for Landlord’s certificate at the beginning of conveyancing which needs to be initiated by the seller acquiring the leaseholders deed certificate. Did you get anywhere? It’s six weeks now and we just discovered the sellers conveyancer hadn’t even asked the seller to initiate despite our solicitor telling them over and over. It appears the conveyors didn’t even know about these new certificates and just ignored our requests. We’ve also stalled. This unfortunately the seller used a conveyance coy who knew nothing about the new building act.
Hello, did you get the answer to this querie. Our freeholder is not giving us a deed either at the moment as they say our managing agents need to prove, with a survey, how tall the building is.
Do you have to complete a leaseholder deed of certificate on a flat even if you don’t want one?
The losses in rent due to 6 month delays will far outweigh any remediation costs on a building were it isn’t applicable.
I am buying a repossession property which means that there is no previous information on the seller for me to be able to get a leaseholders deed certificate and selling company are threatening to pull out as it’s taking so long. How do I get one? Or is there something else that can be provided?
If you are in the UK you could try asking your solicitor to get an Insurance company to underwrite this – we did this the cost was under £200. Good luck.
Would you be able to tell me which insurance company was prepared to underwrite this as my lawyers aren’t being very forthcoming. Many thanks
Can you tell me which insurance company was used?
Thanks
I don’t understand why someone selling a high-rise leasehold flat would not provide a Leaseholder Deed of Certificate when asked to do so. Not doing so simply means abandoning any protection against cladding replacement or other associated safety costs which Schedule 8 of the BSA would otherwise provide to qualifying leasehholders. Maybe the leaseholder hasn’t provided it because the lease wasn’t ‘qualifying’ on 14th Feb 2022. If so – you’ve got the answer. Likewise, I can’t understand a ground landlord refusing to provide a Landlord Certificate when legally required to do so, as this must raise issues as regards future service charge recovery.
Do different rules apply when the landlord is a local authority? Mine seem to think they do.
Why is there been a limit of no more that 3 UK properties in ownership?
I have the official copy of the register of title from when I completed the purchase of my flat from early in 2021. Can I use this copy or does the date on the official copy of the register of title have to be within a set time period from a deed of certificate being requested?
Thanks
I am in the middle of remortgaging my property and the landlord is refusing to provide landlord certificate. What can I do ?
I have a qualifying lease and have a landlords certificate. However it states above that following,
A qualifying leaseholder is protected completely against the costs of remediating flammable cladding in circumstances where the inherent defect resulted from the original construction of the building within the previous 30 years or later refurbishment.
Does that mean that leaseholders in buildings older than 30 years are not protected?
I purchased an apartment in Sep 2022 at which time the leaseholder deed of certificate was not compulsory Now I am selling the apartment but am stuck with the situation that I can’t get hold of the former owner (owner at at Feb 2022) not their solicitors to get hold of this certificate. I’m not even sure if they held one nor applied for it !!! Is there a legal workaround for me obtain this certificate as the current owner
My son is also unable to sell his flat as his landlord is failing to provide a Landlord’s Deed of Certificate and we do not understand why, especially when they are statutorily obliged?
What is a way around this document?
Can a leaseholder apply for a certificate again if they did not attach the correct evidence when they first applied?
Does a LDOC need to be served if the leaseholder in Feb 2022 was non-qualifying?
Sellers solicitors state they won’t provide one, and it is for the future owner to serve one if they want a landlord certificate issued (which would not prove the ownership as at Feb 2022?!)