Property solicitor Martin Whitehorn discusses the required certificates that flat owners buying or selling high-rise flats (over 5 storeys or 11 metres high) need to be aware of in order to reduce service charge costs for fire safety defects in their block.
What should I know?
Following the introduction of the Building Safety Act 2022, qualifying leaseholders in England gained certain protections (which need a qualifying lease certificate to prove eligibility) against paying for the cost of fixing historical fire safety defects, so can no longer be charged to remove unsafe cladding, with some limitations also put in place on non-cladding costs.
So who pays?
Landlords are now liable to pay for all of a relevant building’s fire safety defects if:
They built (or are linked to the builder of) the defective building; or
The net worth of the ‘landlord group’ of companies exceeds £2,000,000 per building it is a landlord of.
If the landlord does not satisfy either of these criteria, they can pass on non-cladding costs to leaseholders, but only up to a capped amount.
Property solicitor Martin Whitehorn
How much are these capped amounts?
The capped leaseholder contributions are as follows:-
If your property was worth less than £175,000 (£325,000 in London), you cannot be asked to pay because your capped amount is set at zero.
For most properties above that value, the capped contribution is £10,000 (£15,000 in London).
If your property was worth over £1 million, your capped amount is £50,000. If it was worth over £2 million, the amount is £100,000.
If you own your property under shared ownership, the cap will be proportionate to the percentage of the property you own. For example, if you are a 75% shared owner outside of London the cap could be £7,500, although this depends on whether you or a previous leaseholder have already paid out money for fire safety measures.
Only 10% of the relevant capped amount can be charged to a leaseholder in any 12-month period.
You mentioned that certificates were required?
Yes, in order to prove that you qualify for these protections, you need a leaseholder’s deed of certificate. You (or your seller if you are buying a high-rise flat) can choose to complete and send a deed of certificate to your landlord at any time.
You must complete a leaseholder deed of certificate if your landlord notifies you that they require one, either when you are selling your property or because there is a relevant defect in the building. If you do not complete it, you will not benefit from the protections for qualifying leases.
Your landlord will also need to provide its own certificate in certain circumstances in order to inform you as to whether you benefit from the protections and have to pay a capped amount towards fire safety defects.
If the relevant landlord does not provide a complete landlord’s certificate, it cannot charge you for fixing fire safety defects.
Buying and selling high-rise flats is becoming increasingly complex so it is important to have specialist solicitors to guide you through the process.
Julie West Solicitors is able to assist with residential and commercial property work including:
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