Landlord’s Certificates under the Building Safety Act 2022

The purpose of the Building Safety Act 2022 (“BSA”) is to give protection to leaseholders on a sliding scale, particularly in circumstances where the landlord or an associate is responsible for the defect, or when the landlord meets the contribution condition. The function of the landlord’s certificate is to allow leaseholders to be able to identify where those conditions have been met; a purpose of The Building Safety (Leaseholder Protections) (England) Regulations 2022 (“the Regulations”) is to provide details of the triggers and timelines for production of the landlord’s certificate, what is required by it, and details of the form of certificate.

• The Triggers and Timelines for the Production of Landlord Certificates

The landlord must provide the certificate in each of the circumstances at Regulation 6(1) of the Regulations. Observations on each is as follows:

• When making a demand for of a remediation service charge – landlord’s should consider providing the certificate with a demand for service charges as a matter of course, similar to when giving a Summary of tenants’ rights and obligations
• Within four weeks of receipt of notification from the leaseholder that the leasehold interest is to be sold – consideration should be given to this as part of the process when providing landlord’s replies to enquiries, and also for review in the registration process.
• 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 – this includes managing agents becoming aware of relevant defects will trigger this, so notification procedures ought to be put in place. The timescale runs from the date of knowledge of the defect; consideration should be given to incorporating a review for the need landlord’s certificates within major works projects.
• Within four weeks of being requested to do so by the leaseholder – this includes both written and verbal notification.

• A Summary of the Information to be Provided and How it is to be Provided

By Regulation 6(2) of the Regulations, the Landlord’s certificate must:

• Be provided in the form set out in Schedule 1 to the Regulations – the form of landlord certificate is at The Building Safety (Leaseholder Protections) (England) Regulations 2022 (legislation.gov.uk)
• Confirm whether the landlord met the Contribution Condition
• Confirm whether the landlord was responsible for the relevant defect (or associated with the responsible person)
• Confirm the following:
• Where the landlord is part of a group, provide details of the corporate structure including (i) the companies which make up the group (ii) the beneficial owner of each company in the ground and (iii) if the beneficial owner (or any company in the group) is, or includes, a trust foundation or similar, details of the trust and trustees
• Names of all directors of each company in the group, and directors of each corporate trust, including nominee and shadow directors or any person occupying the position of director – For UK based companies, the starting point for this information will likely be Companies House
• Details of any person/company who has the right to exercise significant control or influence directly or indirectly over the group –this includes those that have or influence control whether or not they expressly are said to have such control.
• If any trusts, provide details of (i) the type of trust, (ii) the law to which it is subject and (iii) where it is tax resident – that information may well need to be obtained from third parties.
• If any trusts have an interest in the shares of any company comprised in the group, then provide (i) details of the economic settlor, (ii) the named beneficiaries or class of beneficiaries and protector, and (iii) any other person who has the right to exercise or does exercise significant influence or control directly or indirectly over the trust.
• The certificate must be accompanied by (i.e. sent at the same time):
• Company accounts for the landlord and, where part of a group, all companies in the group;
• A statement from a chartered accountant or finance director of the landlord company – where there is a group, it appears sensible to have an external accountant certify;
• Documents or receipts that demonstrate that the relevant building was constructed or converted before the relevant period and details of any relevant works carried out in the relevant period;
• evidence (where applicable) that—
• the person who undertook works relating to the relevant defect or commissioned those works was not the relevant landlord and was not associated with the relevant landlord (as defined in paragraph 2(4) of Schedule 8 to the Act) together with confirmation of the identity of the person who did undertake such works, and
• where those works were commissioned or undertaken by a joint venture, proof the relevant landlord was not party to that joint venture, together with details of the persons who were parties to the joint venture;
• details of any relevant defects (meaning – a defect in the building that arises as a result of anything done (or not done) or anything used (or not used) in connection with relevant works and causes a building safety risk) and any works carried out to the relevant building since 28 June 2017 to remedy relevant defects; and
• details of any costs paid or due to be paid in relation those works, to include:

(i) the total sum of any such costs;

(ii) details of the number of flats between which the costs should be divided; and

(iii)the leaseholder’s maximum remaining liability (being  the maximum capped amount payable by the leaseholder in respect of a relevant measure deducting any payments made by the leaseholder in respect of any relevant measure since 28 June 2017)

• Be signed by the person who is the current landlord on the date the certificate is completed – where the landlord is a company, whilst there is no guidance on which persons are able to sign on its behalf, it appears sensible that it be signed by a director of the company.
• If the landlord cannot provide any of the above information or evidence, they must apply to other persons who are who are relevant landlords requesting the information and those persons must provide the information within three weeks of being asked.

• The Consequences of a Failure to Provide All / Part of the Required Information.

• Under reg. 6(7) of the 2022 regulations, failure to provide a certificate results in the condition in paragraph 2(2) of the BSA 2022 as being treated as met.
• The last section of the landlord certificate (the last paragraph under the heading “Work undertaken on relevant defects”) is impossible to complete until the lessee’s certificate has been provided OR until the timeframe has passed for the leaseholder to reply to the request for the leaseholder’s certificate, such that the landlord is entitled to presume that they are not a qualifying leaseholder. This is because the certification confirms that it is based on, in summary, the information in the landlord’s certificate “and the information provided by the leaseholder in the deed of certificate…”
• Whilst there is no provision in the act for an “interim landlord certificate” to be provided; the best course of action appears to be to provide a certificate with as much information as can be included within the requisite timescale.

• Other Points to Note

• The landlord is only obligated to provide certificates for “relevant buildings”; if a request is received from leaseholders and the building is not a “relevant building”, the landlord does not need to provide a certificate.
• The obligation to provide the Landlord certificate bites (for the purposes of Reg. 6(1)(b) and (d)) even where there is no known “relevant defect”.

In conclusion, the consequences of failing to comply with the new rules regarding certification could be significant. For example, failure to provide certification could lead to the landlord being presumed responsible for the defect, and therefore unable to recover the cost of remedial work. If you require any assistance with understanding or progressing the certification process, please contact us: BuildingSafety@jbleitch.co.uk