The government has published draft amendments proposed to certain secondary legislation made under the Building Safety Act 2022 (BSA 2022), including that which governs the notorious landlord's certificate process. This article explains the changes on the horizon.
The draft Building Safety (Leaseholder Protections etc.) (England) (Amendment) Regulations 2023 (the Amendment Regulations) propose amendments to secondary legislation that was implemented in order to give effect to various leaseholder protections contained in the Building Safety Act 2022. Although intended to protect leaseholders, landlords and conveyancers alike have met with difficulty in applying the various regulations due to the level of complexity, such that landlord's certificates are currently the most frequently cited cause of delays in the leasehold conveyancing process.
The amendments will change the Building Safety (Leaseholder Protections) (Information etc.) (England) Regulations 2022 (the Information Regulations), which contain provisions to support the general leaseholder protections in the BSA 2022 such as setting out further definitions and listing parties who are able to apply for a remediation contribution order. Also due to be amended are the Building Safety (Leaseholder Protections) (England) Regulations 2022 (referred to as the Leaseholder Protections Regulations), which regulate the landlord's obligation to provide a landlord's certificate including the provision of supporting documentation and evidence, intended to enable a leaseholder to understand their potential liability for building safety remediation costs. Crucially, the Amendment Regulations introduce an amended form of landlord's certificate which will simplify the process for certain landlords.
Amendments to the Information Regulations
The Amendment Regulations include a number of technical corrections to the Information Regulations, including:
- amending the definition of resident management companies (RMCs) so that it is the same in the Leaseholder Protections Regulations as the Information Regulations.
- adding Homes England as an "interested person" for the purposes of seeking a remediation contribution order, which will require a landlord, developer or their associate to make payment in respect of the costs of remedying relevant defects.
- expanding the list of interested persons to include RMCs, right to manage companies (RTMs) and named managers;
- provisions in respect of notification of liability to landlords who are responsible for relevant defects and details of the appeal process to the First-tier Tribunal;
- expanded provision for recovery by landlords against other landlords, such as clarifying that where multiple landlords are responsible for a relevant defect then they are jointly and severally liable.
- providing that any amount payable under the Regulations is recoverable by the landlord as a civil debt.
- a new information sharing obligation, that within one week of receiving a leaseholder deed of certificate the current landlord must provide a copy of the certificate to any RMC, RTM or named manager.
Each of these provisions puts further pressure on landlords in circumstances where they are responsible for, or associated with, an entity responsible for relevant defects. The amendment regulations will also create further pitfalls and additional liabilities for landlords if the strict deadlines set out within are not met.
Amendments to the Leaseholder Protections Regulations
Those who have already been through the process of preparing or collating information for a landlord certificate will know all too well the difficulties in the current form of the certificate, where there is an absolute obligation to provide a potentially huge volume of information, irrespective of whether it has any practical impact on recovery.
The Amendment Regulations introduce a new form of landlord certificate that seeks to incorporate various exemptions and to streamline the information to be provided with the certificate in circumstances where a landlord is responsible for defects, or meets the contribution condition and the building has no known defects. Specific provision is also made where a landlord is exempt from the "contribution condition" and therefore calculation of the net worth of the landlord group, such as where the landlord is a private registered provider of social housing or a local authority.
Comment
The implementation date for the Amendment Regulations is yet to be announced and it is possible that further amendments could be made. Overall, the Amendment Regulations provide some welcome changes and clarifications to questions that have been perplexing landlords and conveyancers alike since the secondary legislation was first introduced. However, the strict deadlines for providing the landlord's certificate, to leaseholders and other interested parties, which could apply in multiple different scenarios, will still leave landlords in great difficulty in achieving compliance with the regulations at all times.
