The Building Safety Act 2022: Certificates as evidence 01 May 2024
- Non-service of a landlord Building Safety Act certificate when required triggers presumptions about the application of para 2 and para 3 of schedule 8, and thus limits service charge recovery
- The contents of a landlord certificate can be challenged in the FtT under reg 11 of the Building Safety (Leaseholder Protections) (England) Regs 2022, and hence on a service charge dispute
- Non-service of a leaseholder Building Safety Act certificate in response to the landlord having taken prescribed steps ends a presumption that a the leaseholder is a qualifying leaseholder
- If no certificate is served, it does not follow that there is a presumption that the lease is not a qualifying lease. That remains open to evidence it appears.
- The effect of service of an incorrect leaseholder certificate when required is even less clear: can the contents be challenged?
The Building Safety Act 2022, and the regulations made under it, set out detailed requirements for the service of landlord and leaseholder certificates, and the presumptions which follow if requirements are not complied with. What is not express is what the status is of the contents of either type of certificate served compliantly. This Building Safety Act short article discusses the issues.
The landlord certificate regime is contained in the Building Safety (Leaseholder Protections) (England) Regs 2022. Reg 6 sets out the triggers for service by a current landlord, including a remediation service charge demand, becoming aware of a relevant defect, and a leaseholder request, or notification from the leaseholder that the leasehold interest is to be sold, or a new leaseholder certificate.
Reg 6 also sets out the detailed requirements for the contents of the landlord certificate, information and evidence designed to allow the leaseholder to know if para 2 or para 3 of schedule 8 of the Building Safety Act 2022 will apply to limit service charge recovery. There is a detailed set of exclusions which reduces the information and evidence which must be provided in certain circumstances.
Non service of a compliant landlord certificate in time and in the form in schedule 1 of the Regs means “the condition in para 2(2) of schedule 8 … is to be treated as met …” That is, the condition which leads to no service charge being payable by the leaseholder, qualifying or not, for the costs of relevant measures is met. That’s reg 6(7). It also leads to a like presumption that the landlord meets the contribution condition in para 3 of schedule 8, so that service charges for relevant measures are not recovering from the qualifying leaseholder. That’s the effect of para 14 of Schedule 8.
It is clear the leaseholder can challenge the contents of the landlord certificate. Such an application is possible under reg 11 of the Building Safety (Leaseholder Protections)(England) Regs 2022 “where the applicant believe the relevant landlord has made a false claim in the landlord’s certificate …” If the landlord’s certificate asserted that the para 2 or para 3 schedule 8 condition was not met (so that the landlord would be saying that service charges for relevant measures would be payable), the leaseholder making a s27A Landlord and Tenant Act 1985 service charge application could make a reg 11 application too, and on such an application the Tribunal could determine whether the landlord has complied, and if not require the landlord to provide specified information or documents by a specified time (under para 16 of schedule 8).
It does not seem though that the leaseholder would need to make such an application. There is nothing in the Act or the Regs that creates the presumption that the contents of the landlord’s certificate are correct. The leaseholder, in Tribunal or court, can it seems assert that para 2 or para 3 applies and the service charge is not payable and the Tribunal or court can decide whether that is so on the evidence. Thus the benefit of a reg 11 application, perhaps made soon after the certificate is received, might be only to ensure disclosure and increase the prospects of an inference if an order under reg 11 were not complied with. Disclosure obligations under rules 6 and 18 the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 are more loosely drawn than in the court so inferences are not quite as likely as in the court system. A reg 11 order sought soon after a certificate might assist in raising questions about why the landlord has failed to comply.
What about the leaseholder certificate? The trigger and presumption in relation to leaseholder certificates are set out up a little differently. The presumption that a leaseholder is a qualifying leaseholder is the starting position. Under para 13(2) of schedule 8 of the Building Safety Act 2022, “the lease is to be treated for the purposes of this Schedule as a qualifying lease unless (a) the landlord under the lease has taken all reasonable steps (and any prescribed steps) to obtain a qualifying lease certificate from a tenant under the lease, and (b) no such certificate has been provided to the landlord” where “qualifying lease certificate” means a certificate complying with any prescribed requirements, that the condition in section s199(2)(d) (which defines qualifying leaseholder) was met in relation to the lease at the qualifying time.
The regulation which sets out the landlord’s prescribed steps and the requirements for a leaseholder’s certificate is the Building Safety (Leaseholder Protections) (Information) (England) Regs 2022 reg 6. The prescribed steps are to give notice including a copy of the statutory form of certificate and a statement that the effect of failure to provide a completed certificate will result in the lease as being treated as if it were not a qualifying lease, amongst other things.
The statutory form is in schedule 1. It is more complicated that para 13 schedule 8 suggested. It asks for information about price when last sold, for example, and staircasing in shared ownership leases, which information relates to the paras 4-6 schedule 8 calculations on capping service charges by reference to lease value at the qualifying time, something which para 13 schedule 8 did not suggest. It requires evidence to be attached, not just the information referred to in para 13.
In relation to qualified leaseholder status, it gives options for the leaseholder filling it in to select: “the dwelling was owned by me at the beginning of 14th February 2022 and was my only or principal home on that date”, or “the dwelling was owned by another person at the beginning of 14th February 2022 and was their only or principal home on that date” or “the dwelling was owned by me at the beginning of 14th February 2022, was not my only or principal home on that date, and on that date I owned no more than two dwellings in the UK in addition to the dwelling” or “the dwelling was owned by another person at the beginning of 14th February 2022, was not their only or principal home on that date, and on that date they owned no more than two dwellings in the UK in addition to the dwelling”, or “none of the above applies”. Evidence on this is to be attached.
What happens then if the landlord follows the prescribed steps, and receives a leaseholder certificate in time? Is he, and any court or Tribunal asked if the leaseholder is a qualifying leaseholder, bound to accept that the leaseholder is a qualifying leaseholder if that’s what the certificate says?
The mismatch between the wording of para 13 and schedule 8, and the form of certificate in the Regulations made under it, leaves confusion on this point.
The starting point is a presumption of qualifying lease status. Under para 13(2) if the landlord takes reasonable and prescribed steps to obtaining a qualifying lease certificate and none is provided, that presumption is ended. Thus “the lease is to be treated … as a qualifying lease unless” that is the state of affairs.
Two questions arise. The first is whether there is a presumption that the lease is not a qualifying lease if no certificate is served by the leaseholder. That does not seem to be correct. All that happens is that the starting point in para 13(2), that “the lease is to be treated … as a qualifying lease …” no longer applies. If “treated as” means whether or not that is true, then the end of that starting point leaves the question of whether as a matter of fact the lease is a qualifying lease open to decision by a court or Tribunal.
The second question is whether service of a certificate means that the lease is to be treated as a qualifying lease whatever the certificate says, and whatever the truth of the qualifying lease status.
The first possibility, that the effect of any certificate, even if the leaseholder has ticked the boxe on the statutory form stating “none of the above applies”, is that the lease is treated as a qualifying lease isn’t right. That’s because the certificate referred to in para 13 schedule 8 is a qualifying lease certificate and that is a certificate which asserts that there is qualifying lease status.
The apparent effect of a negligently or fraudulently completed certificate asserting qualifying lease status when that isn’t true (and when none of the evidence required in the statutory form is attached) is surprising. It appears to be that the para 13 starting point of qualifying lease status applies. If that’s right, any attack on the certificate and its effect appears to be something which would have to be done by some other common law means.
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