The Building Safety Act 2022 (“the BSA”) and its accompanying Regulations introduced, amongst other things, a set of protections for residential leaseholders in certain circumstances regarding the reimbursement of service charge costs addressing “relevant defects”. In short, relevant defects will generally involve defects causing a risk of fire spread or structural collapse in “relevant buildings”, e.g. those  over 11 meters or 5 stories tall with at least 2 residential units. 

What is a landlord’s certificate?

Those involved in the management of relevant buildings will no doubt have been involved, to some extent or another, with the requirement introduced following the BSA for a “landlord’s certificate” to be provided to leaseholders. The basis for this requirement was introduced by Para 16 of Schedule 8 to the BSA, which gave power to the Secretary of State to make Regulations for the provision of information or documents to leaseholders. This was then encapsulated in the Building Safety (Leaseholder Protections) (England) Regulations 2022 (SI 2022/711) (“the Regulations”).

In essence, a landlord’s certificate serves to verify whether the relevant landlord:

• Meets the contribution condition contained in Para 3 of Schedule 8 to the BSA ; and/or

• Was accountable for the relevant defects for the purposes of Para 2 of Schedule 8 to the BSA.

These inquiries are crucial because they enable leaseholders to identify the extent to which they might be held liable for such costs, given that Paras 2 and 3 of Schedule 8 restrict the landlord’s ability to  claim the costs for remedying the relevant defects as a service charge cost.

The requirement is arduous, given the extensive information to be provided with the landlord’s certificate, and there are severe consequences if the landlord fails to comply with the requirements.

When does a landlord’s certificate be provided?

In England, a current landlord must provide a landlord certificate in each of the following circumstances:

• When they make a demand to the leaseholder for a remediation service charge

• Within four week of receiving notification from a leaseholder that the leaseholder interest is to be sold

• Within four week of becoming aware of a relevant defect not covered by a previous landlord’s certificate

• Within four weeks of being requested to do so by the leaseholder

• Within four week of becoming aware of a new leaseholder deed of certificate which is in relation to a lease of a dwelling in the building of which the current landlord is the landlord and which contained information that was not included in a previous landlords certificate

(Regulation 6 of the Regulations)

What happens if a landlord fails to provide a landlord’s certificate?

If a current landlord does not provide a certificate in the form prescribed by Regulations within the prescribed deadlines :-

1. Under Para 14 of Schedule 8 of the BSA, the relevant landlord is treated as having met the contribution condition in Para 3 of Schedule 8, meaning that any leaseholders holding a qualifying lease will not be liable for any service charge costs for taking any relevant measures relating to any relevant defects; and

2. Under Regulation 6(7) of the Regulations, the condition contained in Para 2(2) of Schedule 8 of the BSA is treated as being met. In other words, the landlord is treated as being responsible for the defect (or associated with the responsible party) and leaseholders will not be held liable for any service charge costs for taking any relevant measures relating to any relevant defects. Note this protection is not limited to leaseholders holding “qualifying leases”.  

The First-Tier Tribunal (Property Chamber) (“FTT”) considered in the case of Nicola Will Alessandro Koterba -v- G&O Properties (2022) what powers it has to assist leaseholders where a landlord’s certificate is not forthcoming.  

The FTT’s decision in Nicola Will Alessandro Koterba -v- G&O Properties

In this case, the leaseholder sought a determination from the FTT that the landlord had not complied with the requirements set out in the Regulations and an order that the landlord provide a landlord’s certificate. The leaseholder said that, without this, they were unable to determine whether the landlord was liable for remediation works and they were unable to sell their flat.

Paragraph 16 of Schedule 8 to the BSA which enabled the Regulations to be made, contained express provision for applications to the FTT in certain circumstances, namely under sub-section (5)  

“(5) The regulations may make provision for and in connection with an application to the First-tier Tribunal for an order :

(a) determining whether a relevant landlord has failed to comply with the regulations; and

(b) if so, requiring the relevant landlord to provide specified information or documents to a specified person by a specified time. “Specified” here means specified in the order.”

While the FTT recognised that Paragraph 16(5) as above envisages the type of application made by the leaseholder, the difficulty comes from the Regulations themselves.

Regulation 11 (which was made under the powers in Paragraph 16(5) above) provides as follows :

“(1) This regulation applies where a leaseholder or relevant landlord (the “applicant”) wishes to apply to the First-tier Tribunal for an order under paragraph 16(5) of Schedule 8 to the Act.

(2) The applicant can make an application under paragraph (1) above where-

(a) the applicant believes that a relevant landlord has made a false claim in the landlord’s certificate provided under regulation 6, including but not limited to—

(i)                  stating that the relevant landlord is not the developer of the relevant building or is not associated with the developer; or

(ii)                stating the relevant landlord does not meet the contribution condition;

(b) the relevant landlord or current landlord has not given the leaseholder sufficient time to provide information to prove they have a qualifying lease.

….”

Therefore, Regulation 11(2)(a) makes provision for an application to the FTT where it is contended that a landlord has made a false claim in the landlord’s certificate and Regulation 11(2)(b) applies where the leaseholder has not been given sufficient time to respond.

However, the FTT concluded, there is no provision for leaseholders to seek an order from the FTT requiring a landlord to provide a landlord’s certificate. This meant that the FTT had no power to make the type of order sought by the leaseholder in this case. In other words, there is no regulation which enables the FTT to make an order determining whether a relevant landlord has failed to comply with the requirement to provide a landlord’s certificate.

The FTT speculated that this omission from Regulation 11 was not intended, but said that it cannot act without an express power and Paragraph 16 of Schedule 8 to the BSA did not of itself confer such a power. Instead, it defers to the Regulations. The FTT concluded by saying :-

“It is a matter for those responsible for policy and legislation to decide whether or not to confer the power in future regulations but for the time being, no such power exists.”

Conclusion

As the FTT recognised, the lack of any enforcement powers conferred on the FTT under Regulation 11 of the Regulations to force a landlord to comply with Regulation 6 and provide a landlord’s certificate appears to be an error on the part of those drafting the legislation, given the clear intention of Paragraph 16(5) of Schedule 8 to the BSA. It remains to be seen if the legislation will be amended to make such provision, however for the time being the FTT has made clear it does not have jurisdiction to force a landlord to provide a certificate where they fail to or elect not to provide one.

That all being said, it remains the case that  leaseholders will benefit from the protections contained in Paragraphs 2 and 3 of Schedule 8 to the BSA and be protected from the costs for remedying relevant defects in circumstances in which they might otherwise be liable to contribute towards those costs through the service charge, if the landlord does not provide a compliant landlord certificate within the timescales prescribed. This should, therefore, serve as a sufficient incentive for landlords to comply and provide the landlord’s certificate as required, even without the threat of any enforcement powers on the part of the FTT.

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