The Landlord’s Certificate: What Landlords Need to Know
The Building Safety Act 2022 introduced onerous new administrative burdens for landlords. One such example is the Landlord’s Certificate, which landlords must provide for leaseholders and tenants upon request. This post sets out your legal obligations with regards to the Landlord’s Certificate, and the dangers you could face if you fail to meet them.
What is a relevant defect?
A relevant defect, under the Building Safety Act 2022, is a defect that:
- Puts people’s safety at risk from the spread of fire or structural collapse; and
- Arises from work done to the building (such as design, construction, or refurbishment) that either failed to meet building regulations or safety standards in force at the time, or used unsafe materials or methods that compromise the safety of occupants.
Examples of a relevant defect include inadequate or missing fire-stopping measures, unsafe cladding or insulation, and defective structural elements that could cause collapse.
These rules apply primarily to residential buildings that are at least 11 metres tall or have at least five storeys.
What is the Landlord’s Certificate?
The Landlord’s Certificate is a document that clarifies who is responsible for repairing relevant defects in your property. Introduced under the Building Safety Act 2022, landlords must provide leaseholders with a certificate to state:
- If you were responsible on 14 February 2022 for a relevant defect (or associated with someone responsible for it, e.g. the developer);
- If the leaseholder has provided a deed of certificate confirming qualifying status for leaseholder protections;
- Your net worth on 14 February 2022, including any business partners or companies within your landlord group.
Do landlords need to provide the Landlord’s Certificate?
In certain circumstances, the provision of a Landlord’s Certificate is mandatory. If your leaseholder has asked for one, you are obliged to produce and provide the document within four weeks. In cases where you have received notification that a leasehold interest is to be sold, or upon becoming aware of a relevant defect which was not covered by a previous Landlord’s Certificate, you will need to submit one in five days.
Additionally, within one week of receiving a leaseholder deed of certificate, you must provide a copy of the certificate to any resident management company, right-to-manage company, or named manager in relation to the building.
What risks do landlords face for failing to provide a Landlord’s Certificate?
The consequences of failing to provide a Landlord’s Certificate when the Building Safety Act compels you to do so can be stark.
Following recent changes to the law, you will not be able to pass on part of the cost of remediation of a relevant defect to the leaseholder through the service charge without the existence of a Landlord’s Certificate. Simply put, all costs for building safety work will fall to you unless you issue the certificate properly – even in cases where the lease allows recovery of these charges. It is, therefore, important for landlords to understand their status and potential liability under the building safety legislation.
Not having the correct documentation could reduce your property’s value and delay or block transactions. Lenders and buyers might flag your building as high risk, which could have a devastating impact on your investment. Indeed, if flats in the block are struggling to sell due to certificate issues, the market value of the entire building could become affected.
Without the certificate, you also risk tribunal proceedings and additional enforcement actions under the Building Safety Act.
How Attwaters can save you time and money
As a busy landlord, it can be easy to delay taking action on the Landlord’s Certificate; we also understand the frustration of having one more legal document to sort out. However, by sorting your Landlord’s Certificate now, you will save time and money, whether through ensuring you can enforce the terms of the lease in recovering charges or avoiding Tribunal claims and legal disputes for enforcement.
At Attwaters Solicitors, our specialist team has been helping landlords settle disputes and protect their investments for decades. We can ensure you understand all your obligations under the Building Safety Act, warding off any expensive bills or legal battles down the line.
We can assist in all aspects of the preparation and review of Landlord’s Certificates in the prescribed format, as well as offering clear, high-quality legal advice for how best you should proceed. Once a trigger event occurs, you would have very limited time to prepare the certificate due to the tight statutory deadlines. However, you do not have to wait for a trigger event to prepare the certificate – proactively doing this can save you time, avoid panic, and ensure compliance. Get in touch today!
