Qualifying leases (Part 4) - what are landlord and leaseholder certificates?

To explain landlord and leaseholder certificates, it is worth a reminder that:

• A building safety risk is set out in the Building Safety Act as a “risk to the safety of people in or about the building arising from the spread of fire or structural failure”; and
• Landlords will be required to pay for all costs for building safety risks where the Landlord as ‘involved’ in the works and/or they meet a certain financial threshold.

However, where there is a building safety risk and the above circumstances do not apply in relation to the landlord, a leaseholder may be required to contribute to the cost of remedying a building safety risk via the service charge (details of what constitutes a qualifying lease can be found in Kate Rushworth’s previous blog here). In order to seek such contribution, landlords must provide a landlord’s certificate. Leaseholders will also be able to confirm their position in relation to any contribution by providing a leaseholder certificate.

Landlord’s certificate

A landlord’s certificate must be in the form specified in Schedule 1 to The Building Safety (Leaseholder Protections) (England) Regulations 2022 and include:

• a set of company accounts for the landlord;
• a statement from a chartered accountant or finance director of the landlord setting out the information required by the form in Schedule 1;
• documents or receipts showing work was carried out 30 years or more before and any works undertaken during the 30 year period;
• details of any work undertaken since 28 June 2017; and
• details of costs paid or to be paid for work done since 28 June 2017.

Note that prior landlords also can be required to provide current landlords with information within 3 weeks of a request.

Landlords will also need to provide a further certificate to relevant leaseholders within 4 weeks of:

• being told by a leaseholder that its interest is to be sold;
• becoming aware of such a defect not notified by a previous certificate; or
• being requested to provide a certificate by a leaseholder.

Failure to provide any required certificates with the required information and within the relevant timescales will prevent landlords from seeking any contribution to the cost of the building safety risks remediation works.

Landlords who are liable to pay all the costs for remedying the building safety risks do not need to issue landlord certificates however, in practice, leaseholders may want the reassurance of a certificate.

Leaseholder’s certificate

A leaseholders certificate should take the form specified in the schedule to the Building Safety (Leaseholder Protections) (Information etc) (England) Regulations 2022 (note that these are not the Building Safety (Leaseholder Protections) (England) Regulations 2022!) and confirms whether the leaseholder falls within the qualifying requirements.

At any point a leaseholders may issue a certificate to the landlord confirming whether the leaseholder falls within the qualifying requirements (with these details being relevant to establishing the extent to which a leaseholder may be liable to contribute to the costs for remedying the building safety risks).

When leaseholders may be required to contribute to such costs (and how much) has previously been discussed in this blog series here.