Building Safety (Leaseholder Protections etc.) (England) (Amendment) Regulations 2023

The Government are grateful to the Joint Committee for its careful scrutiny of these regulations and have considered this issue carefully. As set out in the department’s memorandum, published by the committee, the Government are satisfied that there are no issues with the regulations that will prevent the process operating successfully. We believe it is imperative that the regulations come into force before the Summer Recess to alleviate the issues facing named managers and landlords. However, we will, of course, monitor closely the progress of future cases, and if it becomes apparent that further changes are necessary we will come back to Parliament with proposals.

There seems to be a disparity between the information prevailing on 14 February 2022, which is the mandatory date when matters have to be assessed—certainly as regards matters of company ownership and so on—and the relevant facts relating to the financial consequences of remediation, which will arise only as a result of the regulations tabled initially last summer and not at some point in February at the whim of the Secretary of State. I am told that the timescales are too tight in many instances, leading to a high risk of default liabilities and perhaps setting in place a liability for something not caused by the person deemed liable. I feel that that is unlikely to procure a beneficial result. The strict application of four weeks—or seven days, as the case may be—is severely inflexible and, I believe, an impediment.

All of the above will lead to uncertainty, risks and pitfalls, including, as I mentioned, default liability for remediation or for contribution in full, in part or not at all. The latest clarification on whether a leaseholder’s certificate of registration is required in an application for a landlord’s certificate is that a failure to provide it means that they fall into the non-qualified category; as I understand it, once something is non-qualified, it is non-qualified for ever. I fail to see how that is the advantage that the Minister appears to claim for it. I would be grateful if she could provide better detail about how leaseholders are supposed to check the accuracy of the information provided in that landlord’s certificate. Do the Government intend to use their powers under Part 11 of the Bill, which is entitled “Information about Interests and Dealings in Land”, to ensure that those certificates are in fact accurate? If not, I do not see how it is possible to verify this.

As for the certificates themselves, paragraph 15.c. of the department’s own guidance says that a landlord’s certificate must be provided

“within 4 weeks of them becoming aware of a relevant defect which was not covered by a previous landlord’s certificate”.

How much of a rolling event might that be? The things that affect that certificate were not crystallised on 14 February 2022 but are on an ongoing continuum. I see that as a real question of a practical nature. It means that a fresh certificate can be issued as and when new relevant facts emerge, which is intrinsically inimical to the concept of a reliable landlord’s certificate even if it could be deemed accurate at the time of its issue. It simply opens the door to more arguments about who knew what and when and whether the information provided could have objectively been deemed accurate, with all the consequences that flow from that in terms of recovery, accuracy and liability for cost, not to mention potential arguments through litigation.

Going on from that, the reason why 14 February is so important is because paragraph 17.b. says that the landlord’s certificate must

“be based on the circumstances of whoever was the relevant landlord on 14 February 2022”.

The circumstances of that person may be one thing but the practical and factual basis of what may be germane to that is, as I say, something that happens in real time—today, not 18 months ago. I assume from this that the legal situation is therefore taken at one date but the circumstances that may be germane to making that calculation in fact accrue at another date; I will leave that to one side for the moment. The facts may create a completely moveable feast in terms of whether you take one subsequent piece of information and then feed it back in. How is this loop ever going to be broken?

Does the Minister dispute this assessment? It seems that there is a disparity between the valuation date in question and the facts that are germane to that. It is essential that the financial information about landlords, particularly landlord groups, is provided in the landlord certificate and is accurate. Any inaccuracy could make the difference between a leaseholder paying nothing or up to the £15,000 cap. Concerns have been raised with me that landlords are, for understandable reasons, using the accounting definition of “a group” when it comes to assessing their net worth, rather than the definition of “associated” in the Building Safety Act.