Landlord Certificates

The landlord certificate issue is causing absolute chaos within the conveyancing industry- and to the point where many Solicitors are now refusing instructions completely where a landlord certificate may be required.

Landlords who don’t meet the contribution condition (net wealth below a certain threshold) can charge leaseholders up to the £10k/£15k cap before they need to contribute to remediation costs. However, to benefit from this, they need to provide the certificate to leaseholders setting out their net wealth calculation and supporting documents in a tight timeframe. Some of the problems flagged are as follows:

There is considerable evidence that landlords cannot comply with the tight deadlines as there is a considerable amount of paperwork required Landlords are struggling to value their net wealth as set out in the BSA/secondary legislation Any error in the certificate means that landlords become automatically liable for remediation costs, irrespective of their net wealth which increases the risk of insolvency Freeholders/superior landlords may forfeit the lease of a non qualifying leaseholder if they cant pay their share of remediation costs Certificates are being asked for in all situations where the cap might apply, regardless of whether or not the developer has agreed to fund remediation, and regardless of whether or not there have actually been any identified building safety defects “just in case” (So even buildings without any identified defects are being asked for this in case any defects might be discovered in the future!!) Leaseholders (and solicitors) are struggling to make sense of all the paperwork required Solicitors are not qualified accountants and cannot verify whether the net wealth calculation is correct and still, they are being asked to confirm whether the net wealth calculation and certificates provided are correct, which they are simply not qualified to do. This is causing issues with professional indemnity insurance, and the reason why Solicitors are now refusing instructions

This issue alone supports the need for the Earl of Lytton’s Building Safety Remediation Scheme given that if ALL leaseholders are protected, there would be no need for the landlord certificates and the conveyancing industry can get moving again.

Articles:

Addressing the issues surrounding the Building Safety Act 2022 | Today’s Conveyancer (todaysconveyancer.co.uk)

Draft PLUK BSA EDITION (propertylawuk.net)