Pursuant to the Building Safety (Leaseholder Protections) (England) Regulations 2022 (the "Regulations"), landlords are required to provide certificates to leaseholders following certain "trigger" events. Within the certificate, landlords are required to provide details about their net worth and state whether they are responsible for certain building safety defects.
Failure to provide a certificate within the required time results in the landlord being unable to recover the cost of certain remediation work from leaseholders. It can therefore have significant financial consequences, so it is crucial to ascertain what information needs to be provided and by when.
What are the trigger events?
The events which require landlords to provide a certificate are:
- when the current landlord makes a demand to a leaseholder for the payment of a remediation service charge;
- within four weeks of receipt of notification from the leaseholder that the leasehold interest is to be sold;
- within four weeks of becoming aware (either themselves or by notification from another person) of a relevant defect not covered by a previous landlord’s certificate; or
- within four weeks of being requested to do so by the leaseholder.
What constitutes the landlord being notified of a sale of a leasehold interest?
The wording of above trigger (2) is not defined in the Regulations. It is unclear when the "to be sold" requirement would be satisfied – is this when the property is put on the market? Is it when contracts have been exchanged? It is also important to consider what constitutes "notification" to the landlord. Is the landlord only required to act once receiving a direct communication from the seller stating that their interest will be sold? Or will this be triggered indirectly where the seller requests information from the landlord in response to the buyer's pre-contract enquiries, such as details of ground rent, insurance and past service charge?
Considering the above questions, there is clearly a need for relevant landlords to adopt an approach with their managing agents and solicitors which identifies and keeps accurate records of anything that may constitute a trigger event. They should establish a method which ensures notifications are passed on efficiently to allow enough time for the certificate to be prepared. Some questions for the certificate may be straightforward to answer, but others may not. Where the landlord states they were not responsible for the relevant defects, the Regulations require them to provide evidence which explains why and shows who undertook the relevant works instead. Construction may have completed a while ago and, therefore, details about the work carried out, when it was carried out and by who may not be easy to obtain. In light of this, it may be sensible for landlords to start preparing certificates now, so they are ready to provide it when a trigger occurs.
When considering the Building Safety Act 2022, it is important to remember that a key intention of Parliament was to offer further protections to leaseholders. Therefore, its implications should be interpreted through this lens. Although the Regulations may seem burdensome for landlords, they are useful for leaseholders who seek reassurance that certain building safety defect costs are not passed down to them.
This blog is part of a series published by Howard Kennedy LLP on the Building Safety Act. For more information, please contact Jenna Russell or Stuart Duffy. For other blogs, please click here.
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