Tribunal judgments are starting to provide much needed clarity on aspects of the building safety legislation, but until now the complex regulations on landlord's certificates and leaseholder's deeds of certificate have not been examined.
That has changed with the Upper Tribunal judgment in Lehner v Lant Street Management Company Limited [2024] UKUT 0135 (LC), an appeal against a First-tier Tribunal decision on the leaseholder protections provided by Schedule 8 of the Building Safety Act 2022 (the BSA 2022).
The appeal to the Upper Tribunal was regarding a decision of the First-tier Tribunal that the leaseholder was liable to contribute towards cladding and fire safety remediation works at his building. The Tribunal had determined that the leaseholder was liable to pay under the terms of his lease and, on the matter of the protections in Schedule 8 of the BSA 2022, had concluded that they did not apply as neither the 'developer' condition at paragraph 2 of Schedule 8, nor the 'contribution' condition at paragraph 3 of Schedule 8, applied, and there had been no evidence provided that the lease was a 'qualifying lease' to which the protections applied. The leaseholder appealed this decision.
There are several stringent requirements in the legislation regarding what must be provided by the landlord, by when, and how soon it must be provided after any relevant trigger. Equally, there are strict rules about how and when to request a leaseholder's deed of certificate, and about the provision of copies of such certificates to any other landlords and to management companies.
Failure to correctly navigate this complex system of rules and deadlines can lead to a landlord being 'deemed' to be responsible for any building safety defects and required to pay for any remediation itself, without recourse to leaseholders, whether qualifying or not.
The Upper Tribunal's judgment
Allowing the leaseholder's appeal, the Upper Tribunal set out some helpful commentary on the 'deeming' provisions in the BSA 2022 and its associated regulations, as well as an Appendix which sets out how the First-tier Tribunal ought to proceed when trying to ascertain whether they will apply.
For the most part, the Upper Tribunal confirmed what is set out in paragraph 14(2) of Schedule 8 and Regulation 6(7) of the Building Safety (Leaseholder Protections (England) Regulations 2022: that if a landlord's certificate is not served in accordance with the regulations, the landlord will be deemed to be responsible for Relevant Defects in accordance with paragraph 2(2) of Schedule 8.
Helpfully, the UT held that if any 'trigger' for the service of a landlord's certificate occurred before 20 July 2022 (with the possible exception of 'awareness' of a defect), a landlord's certificate need not be served in relation to that trigger. A leaseholder nevertheless remains free to request a landlord's certificate if no other trigger has occurred, and if it is not provided then the deeming provisions will apply, even if the service charges pre-date the BSA 2022.
If a certificate is provided, this will still be subject to evidence as to whether or not it is true: such a certificate will 'give rise to a presumption of fact, but the certificate itself is not proof of the facts which it certifies'. This was not entirely clear in the legislation and so this confirmation is welcome.
Similarly, pursuant to paragraph 13(2) of Schedule 8, a lease will be deemed to be a qualifying lease unless all reasonable steps and any prescribed steps have been taken to obtain a leaseholder's deed of certificate, and none has been provided. Further, the Upper Tribunal commented that a failure to provide a leaseholder's deed of certificate merely raises an assumption that the lease is not qualifying, which will be subject to the facts if challenged.
Hence the Upper Tribunal held that if, on the facts, the necessary conditions for a qualifying lease in section 119 of the BSA 2022 were satisfied, then regardless of whether a certificate had been provided 'the lease is a qualifying lease and the protections in paragraphs 3 to 9 of Schedule 8 are applicable'.
The Upper Tribunal therefore allowed the leaseholder's appeal on the basis that his lease was a qualifying lease and so pursuant to paragraph 8 of Schedule 8 to the BSA 2022 he was not liable to pay the service charges as they related to cladding remediation.
Unanswered questions
Although the Upper Tribunal's comments and the steps set out in the Appendix are helpful, there remain a number of open questions in relation to some of the more stringent timescales and requirements set out in the regulations.
For example, there was no mention of any need to consider whether the necessary steps to obtain a leaseholder's deed were taken before the notification date of 5 days after becoming aware that there was a relevant defect in the building; nor a determination of what is meant by 'becoming aware'; nor a consideration of whether any landlord's certificate has been provided to 'other landlords in the building'.
The precise question of compliance remains locked within the statement that the landlord's certificate must comply with regulation 6 and that the landlord must have taken all reasonable and any prescribed steps to obtain the leaseholder's deed of certificate.
The Upper Tribunal has provided some helpful directions in this judgment, but some of the knottier questions remain to be determined. Given the way in which the Upper Tribunal applied the deeming provisions in this case, combined with the apparently strict timescales set out in the supporting regulations, landlords will need to be extremely proactive and hypervigilant if they wish to protect their ability to recharge for building safety defects in relevant buildings.
