Articles, News, Updates
All Change! Landlord Certificate and Leaseholder Deed of Certificate
4th July 2023
Andrew Butler KC looks at the landlord certificate and leaseholder deed of certificate under the BSA.
In this article:
- “the 711 Regs” means the Building Safety (Leaseholder Protections) (England) Regulations 2022 (SI 2022/711)
“the 859 Regs” means the Building Safety (Leaseholder Protections) (Information etc.) (England) Regulations 2022 (SI 2022/859);
- “LC” means the Landlord’s Certificate;
- “LDoC” means the Leaseholder Deed of Certificate;
- “the Amendment Regs” means the new draft Building Safety (Leaseholder Protections etc.) (England) (Amendment) Regulations 2023;
- “the Act” means the Building Safety Act 2022.
It will be recalled that the 711 Regs and the 859 Regs introduced the controversial regimes for the LC and LDoC respectively. To say that these instruments have met with a mixed response would be charitable; criticism has been levelled both at the quality of the drafting, and the impracticality of the regimes they introduce.
The Amendment Regs are draft forthcoming secondary legislation being introduced to make amendments to both the 711 Regs and the 859 Regs. It appears that the government has tightened up on the drafting, but there is not much respite in terms of the regimes themselves.
Focusing first on the 859 Regs, the Amendment Regs begin by adding certain new definitions (“current landlord”, “named manager” and “shared ownership lease”) and then add new “interested persons” for the purpose of seeking Remediation Orders and Remediation Contribution Orders under ss.123 and 124 of the Act.
Then, paragraphs 5 to 7 effect broadly similar changes to the provisions of the 859 Regs which govern the landlord recovery provisions under the various leaseholder protections of Schedule 8 to the Act. Amongst other things, they:
- provide that where a landlord (L) has been unable to recover a service charge because of a defect for which more than one predecessor landlord is responsible, those predecessors are jointly and severally liable (as opposed to being liable for equal shares, as the 859 Regs had provided);
- enact requirements for the content of notices which, the 859 Regs provide, L needs to serve on its predecessors in order to recover;
- contain further provision about the appeal procedure which those who receive such notices are able to invoke;
- introduce provisions aimed at preventing double recovery; and
- confer on L the right to recover amounts payable from predecessors as a civil debt.
So far as LDoCs are concerned, the changes are limited. However:
- somewhat curiously, Reg 6(1) of the 859 Regs, which expressly enabled a tenant to send his or her landlord an LDoC, is omitted;
- a lacuna in Reg 6(4)(c) is filled; this provided that a landlord’s notice should spell out to a tenant the consequences of a failure to complete an LDoC when requested but said nothing about the need to provide supporting evidence. The Amendment Regs make clear that these consequences extend to a failure to serve such evidence too;
- the Amendment Regs also introduce provisions whereby a landlord must send an LDoC to any manager at the building within a week of receiving it; a failure to do so means that the costs of a relevant measure must neither be included in any calculation of service change nor met from a reserve fund.
These changes are, however, the warm-up to the main event. Most interest has focused on what changes are being made to the 711 Regs.
The changes are quite radical. After some tinkering with the definitions, the first substantive change is the introduction of a fifth set of circumstances in which an LC must be served: that is, within four weeks of a landlord becoming aware of a new LDoC containing information not included in a previous LC.
Thereafter, the Amendment Regs introduce several new provisions which make changes to the information which is required to be included in an LC, and also seek to tailor the information and evidence needed to various different situations in which an LC must be served.
As regards the information to be provided, there is one wholly new requirement (the percentage of the storeys in the relevant building which each relevant landlord was landlord at the qualifying time). The remaining information is comparable to the previous requirements, seeking as it does to extract detailed exposition of any group of which the landlord is part; but it differs from the current regime in that it is now broken down into two paragraphs, with one set of information referable to the condition in para.2 of Schedule 8 (landlord responsibility) and one set referable to para.3 (contribution condition). The basic scheme is to relieve landlords of having to include in the LC information which is not relevant; if, for example, the landlord accepts that it meets the contribution condition, it does not have to include in the LC information relating to that.
As with the new rules regarding the LDoC, the Amendment Regs also provide that an LC must be provided to a relevant manager within a week of being given to a tenant, with the same consequence (irrecoverability of costs) if it is not. A new form of LC is also provided.
Those who hoped that the Amendment Regs would simplify the tortuous requirements of the 711 Regs may be disappointed. The best that can be said is that they streamline them, so that what is required by the LC is responsive to what it is seeking to prove. The amendments do not go much further than that.
This article first appeared in Property Law UK in July 2023.