This document is part of the Commercial Property Standard Enquiries (CPSE) suite of documents. The suite is prepared by members of the Property Support Lawyers Group and endorsed by the British Property Federation.
The Property Support Lawyers Group would like to acknowledge the work of Roy Perrott of Fladgate LLP in preparing this document.
The web format incorporates guidance notes, which can be viewed or printed with, or separately from, the enquiries (see Actions pane in the top right hand corner of the screen).
The Word format can be accessed from the Word link in the Actions pane in the top right hand corner of the screen. The Word format allows a user to insert replies to the enquiries.
The PDF format can be accessed from the link below.
If the Property is also subject to commercial tenancies, then consider raising CPSE.2 in addition to CPSE.6. If raising both, there may be some overlap in questions relating to common parts. The parties can decide whether it is sufficient to answer these on one set of CPSEs only.
If you have any comments on this document, please e-mail [email protected].
The section on Interpretation in CPSE.1 is incorporated in this document and the following interpretation also applies:
1995 Act: means the Landlord and Tenant (Covenants) Act 1995.
Consent: refers to an approval, a licence or a permission (whether of the Landlord, any superior landlord or any other person).
Housing Act Licence: means an HMO licence (under Part 2 of the Housing Act 2004) or a selective licence (under Part 3 of the Housing Act 2004).
Landlord: includes licensor.
Let Unit: means any Lettable Unit which, at the date of the replies to these enquiries, is the subject of at least one current Tenancy.
Lettable Unit: means any part of the Property used or intended for separate occupation for residential (not commercial) purposes.
Rent: includes licence fee but does not include service charge or insurance premiums or other sums reserved as rent.
Tenancy: refers to any arrangement for the occupation of any Lettable Unit (whether that is a lease, underlease, licence or an agreement for a lease or licence).
Tenancy Documents: (in relation to each Tenancy) refers to the instrument creating that Tenancy and any of the following that relate to it: charges, mortgages, surrenders, variations, side letters, undertakings, applications, Consents, memoranda, registrations, notices, rent deposit deeds, orders, guarantees, concessions, franchise agreements, counsel's opinions, arbitrators' or experts' decisions.
Tenant: includes subtenant and licensee.
Instructions
Section 1 (enquiries 1-3) relates only to those parts of the Property that are not Let Units.
Section 2 (enquiries 4-21) relates only to Let Units.
Voids are the Lettable Units which are currently unlet. Voids may have a significant impact on the income which is able to be derived from the Property.
The Buyer will want to know why there is no current Tenancy (for example because there was a long term plan to get vacant possession in order to redevelop, or because the Lettable Unit became vacant and no effort has yet been made to market it, pending the proposed sale to the Buyer).
The Buyer may wish to start marketing the vacant Lettable Unit and will want to know what has been done to market it and whether there is anyone who might be interested in taking a Tenancy of it.
1.1Please identify all Lettable Units which are not currently Let Units.
1.2In relation to each such Lettable Unit, please explain how any previous Tenancy was ended, why there is no current Tenancy and tell us whether anyone is currently expressing an interest in taking a Tenancy of it.
Areas of the Property may be unlet because they are designated as common parts to be used by the landlord and the occupiers of the Property in accordance with the individual occupational lease terms. Common parts typically include stairs, lobbies, entrance halls and access roads but they are determined by the physical layout of the Property, the number of occupancies, and the needs of the occupiers.
2.1Please identify any areas of the Property which are common parts, being parts which are not Lettable Units and which are intended to be used in common by the occupiers of the Property.
2.2Is use and maintenance of the common parts governed by any arrangements other than the terms of the Tenancies of the Let Units? If so, please provide details.
Commercial parts (in which case CPSE.2 should be raised in relation to those).
Retained parts (those which are neither designed nor intended to be separately let, nor treated as common parts, but are retained by the landlord for a particular purpose, for example, as office or storage space). The Buyer will need to establish whether the cost of insuring and maintaining these parts will be met by the tenants of the Let Units or by it as landlord.
3.1Please identify any areas of the Property that are neither Lettable Units nor common parts.
3.2Are any of these areas designed or intended for commercial use? If so, please specify which.
3.3Are any of these areas occupied and, if so, on what basis?
The occupier will not necessarily be, or only be, the person who is the Seller's immediate tenant of the Let Unit. Occupation may be by an employee of the tenant company or a relative, or may also be by virtue of a licence, a sublease, or by trespassers.
Enquiry 4.2 (d)
If the current use is revealed as commercial, then the Buyer should consider raising CPSE.2 for those units.
Enquiry 4.2 (g)
The Seller should indicate which statutory regime (for residential tenancy protection) each Tenancy falls into. This will then help it decide which is the relevant enquiry (from 15 to 18) to answer in relation to that Tenancy.
Enquiry 4.3 (a)
Tenancy Documents will include any side letters. These may vary the terms of a lease by, for example, waiving the landlord's entitlement to the full amount of rent due for a period, or by imposing a cap on the amount of service charge which is recoverable.
Enquiry 4.3 (b)
Even a failure to complain that rent is regularly paid late may constitute an informal agreement which could bind the Buyer (Hazel v Akhtar [2001] EWCA Civ 1883).
Enquiry 4.3 (c)
If pending Consents are disclosed, the Buyer may wish to negotiate a term in the contract to require the Seller to take into consideration the Buyer's wishes as to how the application should be dealt with.
4.1If not already supplied, please supply a copy of the Tenancy Documents (including any inventory or schedule of condition) for each current Tenancy.
4.2Please supply a schedule of the current Tenancies of all the Let Units, indicating, in relation to each such Tenancy (unless disclosed by the Tenancy Documents supplied):
(a)the Let Unit that the Tenancy relates to;
(b)the name of the current Tenant;
(c)the name of the current occupier;
(d)the current use;
(e)whether or not the Tenancy is in writing; and
(f)the relevant statutory regime (as described in enquiries 15-18) which the Seller believes applies to that Tenancy.
4.3Please provide the following information for each current Tenancy:
(a)details of any informal arrangements with the Tenant that are not disclosed by the Tenancy Documents supplied, including any Consents to the grant of the Tenancy or given under the Tenancy;
(b)details of any waiver of any of the terms of any of the Tenancy Documents supplied;
(c)details of any applications for Consent made by the Tenant that are currently being considered;
(d)details of any negotiations for the surrender, renewal of variation of the Tenancy and any terms agreed; and
(e)confirmation that the Tenant has not indicated, formally or informally, any intention to vacate.
4.4For each current Tenancy, please answer whichever of enquiries 15 to 18 are relevant to the statutory regime applicable to that Tenancy.
If the Property is subject to Tenancies which reserve a substantive rent, the Buyer will probably be interested in it as an investment. The Buyer will therefore be concerned to know everything about the rental income, including the extent to which rent has not been recovered, whether rent will or can be recovered and at what cost, and whether the level of income will change because of rent reviews or concessions.
These enquiries should be answered separately for each current Tenancy.
Enquiry 5.2
Although the existence of any rent suspension clauses should be apparent from the Tenancy Documents, the Seller should include here details of any rent suspension currently in effect.
Enquiries 5.4 to 5.7
These will not be relevant to residential Tenancies that have no rent review.
Where there is a rent review clause, there is a presumption that, even where it stipulates that certain parts of the rent review procedure must be completed by a specified time, time is not "of the essence" and therefore a failure to observe those time limits does not have any consequence. The following are exceptions to this rule and illustrate where time will be of the essence and the time limits will be binding on the parties:
Where the rent review clause expressly provides that time is to be of the essence.
In certain circumstances where the clause states the consequence of not complying with the time stipulation.
In certain circumstances where a party serves a notice making time of the essence.
Where the clause structure demonstrates an intention that time should be of the essence.
Where the relationship between the rent review clause and another provision in the lease (such as a break clause) by implication makes time of the essence.
The Buyer will need to review the rent review terms in the light of what has happened in practice.
Enquiry 5.6
The general rule is that where premises have been improved, the improvements form part of the premises and will be valued for the purposes of calculating the rent ("rentalised") unless they are to be "disregarded". Whether or not improvements are to be rentalised will depend on the wording of the lease. Generally the rent review clause will provide that in calculating the rent on a review, an improvement is to be disregarded where it was carried out by the tenant, and at the tenant's expense, with the landlord's consent (where required) but not where the landlord required it to be carried out.
In relation to each current Tenancy:
5.1Please state:
(a)the amount of the Rent currently payable;
(b)whether the Rent is paid in pounds sterling;
(c)who pays the Rent;
(d)whether the Tenant is paying the Rent with the help of housing benefit and, if so whether the benefit is paid to the Landlord or to the Tenant. Where Rent is being paid with the help of housing benefit paid directly to the Landlord, please confirm that, on completion, you will provide us with a letter authorising the local authority to pay future housing benefit direct to the Buyer.
(e)whether the Rent is paid by banker's order or direct debit; and
(f)to whom rent demands are sent?
5.2Except where apparent from the Tenancy Documents supplied, please give details of any rent concessions, deferments, abatements, reverse premiums on the grant of a lease and other inducements given.
5.3Please supply a schedule of outstanding rent arrears and a record of rent payments over the last three years.
5.4Please confirm that:
(a)any rent reviews have taken place strictly in accordance with the terms of the relevant Tenancy;
(b)any notices and applications for arbitration or for determination by an expert of any current rent reviews have been made on time; and
(c)any rent review settlements have been satisfactorily evidenced in accordance with the terms of the relevant Tenancy (or provide details of any settled rent review which has not been evidenced in this way).
5.5In respect of any rent reviews that are currently being negotiated, please state the present position and provide copies of all notices and correspondence.
5.6Except where apparent from the Tenancy Documents supplied:
(a)has any Tenant made any improvement to the Let Unit which is to be ignored on rent review;
(b)since the original letting of the Let Unit have there been any alterations to its internal layout or physical arrangement or appearance which might affect the level of rent achievable; and
(c)are there any other circumstances which any Tenant has claimed have the effect of reducing the rental value of the Let Unit?
The particular dates on which the Let Units were last redecorated will not necessarily correspond with the required dates for redecoration under the Tenancies. The Buyer will wish to know the actual dates to decide whether any enforcement action is needed for breach of covenants to redecorate and to assess whether any breach can arguably be said to have been waived.
Enquiry 6.2
The Tenancy may give the landlord the option, at the end of the lease, to require reinstatement by the tenant of any alterations that it has made. This enquiry is designed to find out what works the tenant has done.
In relation to each current Tenancy:
6.1Please state when redecoration of the Let Unit was last carried out:
(a)externally; and
(b)internally.
6.2(If not apparent from the Tenancy Documents supplied) please give details of any works carried out by the Tenant to the Let Unit since the date of the Tenancy or any agreement for the Tenancy and indicate (in respect of these works) whether they were authorised by a Landlord's licence (where required).
The Buyer will want to establish which Tenancies qualify as "new tenancies" as defined in section 1 of the 1995 Act and which do not ("old tenancies"). This may not be apparent on the face of the instrument creating the Tenancy. It is important to classify them, as different rules apply to the liability of the parties on assignment of a new and old tenancy.
On assignment of an old tenancy, the original tenant remains liable during the whole term, and the assignee is likely (through direct covenants with the landlord) also to accept liability for the remainder of the term from the point of assignment.
On assignment of a new tenancy, the basic principle is that the assignor tenant and its guarantor, if any, cease to be liable, and the assignee becomes liable from the date of the assignment. This rule is varied if the assignor tenant is required (or agrees) to enter into an "authorised guarantee agreement".
This is a type of guarantee agreement permitted under the 1995 Act which effectively makes the outgoing tenant a guarantor of the incoming tenant until that incoming tenant itself assigns the lease. The Buyer ought to be aware of any authorised guarantee agreements because they should be included with the Tenancy Documents; in practice, they are often incorporated within a licence to assign.
In practice, landlords rarely require an authorised guarantee agreement from the assignor on assignment of a residential Tenancy because:
It would be rare for the assignor to be willing to act as guarantor for the assignee (whether under an authorised guarantee agreement or a voluntary guarantee).
Where the residential Tenancy is granted at a premium, and a very low rent, the landlord may not be that concerned about whether the assignee can pay the rent. If the assignee fails to pay the other outgoings (for example, service charge) or to observe the other covenants, the landlord may be content either to forfeit the lease or claim damages from the assignee.
Where the residential Tenancy reserves a rack rent (and no premium) it is likely to be a short Tenancy, and these usually prohibit assignment altogether.
Enquiry 7.2
This enquiry applies only to "new tenancies" under the 1995 Act.
Section 11 of the 1995 Act defines "excluded assignment". The most common reason for an assignment being excluded is because it has taken place without the landlord's prior consent, where that consent ought to have been obtained. On a strict reading of the 1995 Act, a subsequent grant of consent will not rectify the situation and the assignment will remain an excluded assignment until the next assignment which is not itself an excluded assignment.
The other reason an assignment may be excluded is because the assignment has taken place "by operation of law" as, for example, on death or bankruptcy.
Under an excluded assignment the assignor remains liable under the Tenancy together with the assignee. This means the Buyer will be able to enforce the tenant covenants against both the assignee and the assignor.
Enquiry 7.3
This enquiry is relevant to both old and new tenancies.
Under section 17 of the 1995 Act, in most cases, where a tenant has failed to pay sums due under a lease and a former tenant or its guarantor remains liable for that default, the landlord can only recover these sums from the former tenant or guarantor if it has served notice of its intention to do so. The notice must be in the form prescribed by section 17 and must be served on every former tenant and guarantor against whom the landlord wishes to recover. The notice must be served within six months after the sums first became due.
This element of the 1995 Act is more important for "old" leases, i.e. those granted before 1 January 1996 because generally under new tenancies a former tenant will have no continuing liability.
Enquiry 7.3(c) is made to alert the Buyer to the need to serve section 17 notices following completion of the Transaction and also to warn the Buyer of potential claims for overriding leases (see enquiry 7.4 below).
Enquiry 7.4
If a former tenant or its guarantor has been served with a section 17 notice of the landlord's intention to claim unpaid sums due under a Tenancy, and pays in full the amount claimed, that former tenant or guarantor is entitled to claim an overriding lease under section 19 of the 1995 Act.
An overriding lease is a lease of the premises, granted by the landlord to the former tenant or guarantor and which slots in above the lease to the defaulting current tenant, so that the claimant becomes both the landlord's new immediate tenant and the landlord of the defaulting tenant. The form of the overriding lease is the same as the lease which it overrides, i.e. the lease between the landlord and the defaulting tenant.
The advantage for the former tenant or guarantor of taking an overriding lease is that it gains an interest in the premises and a degree of control over the defaulting tenant. It can sue the defaulting tenant and, as landlord, can bring forfeiture proceedings against the defaulting tenant if there is a further breach of covenant.
The advantage for the landlord is that it has as its immediate tenant someone who has demonstrated in the past their ability to pay the rent. The disadvantage is that the landlord may end up with someone whom it would not have chosen to be tenant, perhaps because that former tenant had been difficult or unreliable as a tenant in the past.
The Buyer will want to know whether there are any potential claims for overriding leases. A claim for an overriding lease can be made at any time within 12 months after full payment under a section 17 notice has been made.
In relation to each current Tenancy:
7.1Please state whether it was dated on or after 1 January 1996 and, if so, was granted pursuant to an agreement, an option or a court order made before that date?
7.2Please confirm whether any former Tenants or their guarantors are still liable under any Tenancy by reason of an excluded assignment as defined in section 11 of the 1995 Act?
7.3With reference to section 17 of the 1995 Act please:
(a)supply full names and current addresses of any persons contingently liable for any fixed charge payable under the Tenancy as defined in section 17;
(b)provide copies of all section 17 notices which have been issued for claims which remain unpaid; and
(c)give details of all claims currently outstanding which are required to be the subject of a section 17 notice.
7.4Please give details of anyone entitled to claim an overriding lease under section 19 of the 1995 Act and give details of any claim made even if it has been abandoned or withdrawn.
Under the 1995 Act an assignee (whether of the lease or the reversion) becomes liable under the covenants unless they are personal to the assignor. Covenants for these purposes may include obligations contained in any agreement for lease.
The Buyer will need to know whether there are any obligations in an agreement for lease which remain unfulfilled and for which he may become liable on completion of the Transaction. These might include obligations to build, alter, repair or fit out any Let Unit. The Buyer may need to reflect the cost in the price for the Transaction or to negotiate indemnities.
The Seller should beware that, according to the Court of Appeal in BHP Petroleum Great Britain Ltd v Chesterfield Properties Ltd [2001] 3 WLR 227, personal covenants are not released by the mechanisms of the 1995 Act and it may therefore need to consider whether to reserve appropriate rights to comply with any continuing personal obligations.
Enquiry 8.2
The Buyer needs to know how any Tenancy of any Let Unit may have been varied, when the variation was made, and who was party to it. Variations affecting the length of term or the extent of the premises demised by the lease may constitute a surrender of the existing lease and the grant of a new lease. If such a variation is made to an "old tenancy", the regrant will be treated as a grant of a new lease under the 1995 Act, so that the variation will have effectively converted an old tenancy to a new tenancy, to which the 1995 Act liability regime will apply.
Even if the variation does not constitute a surrender of the lease, it may still release a guarantor from all further liability unless either the guarantor has consented to it or there are provisions in the guarantee agreement to permit such variations.
The guarantor in question could be the guarantor of a former tenant or of the current tenant, or a former tenant who has given a guarantee in the form of an AGA. Release under this rule of law cannot apply to the original tenant or a former tenant under an "old tenancy", as neither are in the position of a guarantor. However, their liability may be capped (see the following paragraph).
Where the variation has not released the guarantor, the guarantor's liability, and that of former tenants, may still have been limited. Where the lease obligations have been made more onerous by a variation of terms, a former tenant (which includes a former tenant who has provided an AGA) or the guarantor of a former tenant is not liable insofar as liability has been increased by the variation. This is the effect of the Court of Appeal's decision in Friends Provident Life Office v British Railways Board [1995] 1 All ER 336 but, in addition, for variations on or after 1 January 1996, section 18 of the 1995 Act has the same effect.
It is not clear, however, whether section 18 applies if the former tenant or the guarantor of the former tenant was a party to the variation (as a result of the operation of the anti-avoidance provisions in section 25 of the 1995 Act). The protection afforded by section 18 does not apply to the current tenant's guarantor.
In relation to each current Tenancy:
8.1Please confirm there are no outstanding obligations on the part of either the Landlord or the Tenant under any agreement for lease under which any Tenancy was granted. If there are such outstanding obligations, please supply details.
8.2Except where apparent from the Tenancy Documents supplied, please give details of any variations to any Tenancy of a Let Unit and when and how they were effected.
This enquiry is concerned with security deposits, rent deposits, bank bonds and separate guarantee or surety agreements. The extent or duration of the liability of any guarantor will depend on whether the lease is one to which the 1995 Act applies (see the guidance notes to enquiry 8.2).
In relation to each current Tenancy:
9.1Except where apparent from the Tenancy Documents supplied, please state whether a sum has been deposited by the Tenant as security for, or on account of payment of Rent or performance of any obligation. If yes, please state:
(a)who holds the security deposit and where;
(b)the amount currently held by way of security deposit (including any interest which has accrued on it);
(c)whether any claim has been made against that security deposit. If yes, please give details; and
(d)whether you are aware of any dispute or issues that you believe may lead to a dispute in relation to the repayment to the Tenant of the security deposit.
9.2If the Tenancy is considered to be an assured tenancy or assured shorthold tenancy under the Housing Act 1988 (as amended by the Housing Act 1996) and the security deposit was paid by the Tenant (or retained by the Landlord on a renewal of the Tenancy) on or after 6 April 2007, please state, in addition to the information supplied in the reply to enquiry 9.1:
(a)under which deposit scheme the security deposit is held;
(b)the reference details for the deposit with that scheme;
(c)if the security deposit is lodged with a custodial scheme, whether it was lodged within the time period required by law;
(d)whether the Landlord gave the Tenant the information prescribed by section 213 of the Housing Act 2004 and did so within the time period required by law; and
(e)whether the Tenant has made any County Court claim for failure to protect the security deposit or to provide prescribed information.
9.3Except where apparent from the Tenancy Documents supplied, please give details of any guarantees or bonds given by a third party (e.g. a bank) in relation to a Tenant's obligations.
9.4In relation to all guarantees or bonds given by a third party (e.g. a bank) in relation to a Tenant's obligations please:
(a)confirm that no claim has been made under these arrangements; and
(b)confirm there has been no release or discharge of any such third party, whether expressly or by operation of law.
It is important that the Buyer is fully informed regarding service charges so that it can assess the likelihood of a service charge dispute, even if there is none at the time of the Seller's replies.
Asbestos - Enquiry 10.18
Regulation 4 of the Control of Asbestos Regulations 2012 (SI 2012/632) (CAR 2012) applies only to non-domestic premises. Where the Property contains residential lettable units and common parts (for example, where a large property is converted to flats with communal staircases and corridors), regulation 4 will apply to the common parts of the Property (and any non-domestic parts) only. The Buyer is likely to become the dutyholder for the purposes of regulation 4 when it completes the acquisition. Under CPSE.1 enquiry 8, the Buyer should obtain copies of the information held by the Seller on asbestos issues. This will help the Buyer discharge its duty under regulation 4.
In addition, this enquiry 10.18 asks the Seller for any correspondence there may have been with the residential tenants about asbestos issues.
Enquiry 10.18 refers to both the CAR 2012 and the comparable predecessor regulations (Control of Asbestos Regulations 2006 (CAR 2006) and Control of Asbestos at Work Regulations 2002 (CAWR 2002)). All of these contain a regulation 4 in the same terms. All sets of regulations are referred to as the Seller may have relevant information under the earlier regulations.
For more information on the CAR 2012, see the guidance notes for enquiry 8 in CPSE.1.
10.1Has the right to manage been exercised in relation to the Property or any part of it?
10.2Is there a recognised tenants' association? If so, please provide the name and address of the secretary.
10.3Has the Landlord complied with all its obligations under the Landlord and Tenant Act 1985? In particular:
(a)If the Landlord has carried out qualifying works to the Property (as determined under s20(3) of the Landlord and Tenant Act 1985) or entered into a long term agreement for the provision of services to the Property:
(i)
did the Landlord consult the Tenants before doing so;
(ii)
was any notice put, or is such a notice required to be put, in OJEU in respect of those major works or long term contract? and
(iii)
please supply details of the works and/or long term agreement.
(b)in relation to any service charge demand sent to a Tenant on or after 1 October 2007, did the Landlord serve on the Tenant a formal summary of the Tenant's rights and obligations in the prescribed form?
(c)has any Tenant exercised its rights under section 21 of the Landlord and Tenant Act 1985 to seek a summary of the service charge expenditure or under section 22 of the Landlord and Tenant Act 1985 to inspect the service charge accounts? If so, which Tenant(s), and did the Landlord comply as required by that Act?
(d)is there any pending application by the Landlord to the First-tier Tribunal (Property Chamber) (previously called the Leasehold Valuation Tribunal)?
10.4Has any recognised tenants' association served notice under section 30B of the Landlord and Tenant Act 1985 asking to be consulted about, or to receive details of, any managing agents for the Property?
10.5Have the Tenants exercised their rights to a management audit under section 76 of the Leasehold Reform, Housing and Urban Development Act 1993?
10.6Have the Tenants of any long leases (as defined in enquiry 17) exercised either:
(a)the right to appoint a manager under section 21 of the Landlord and Tenant Act 1987; or
(b)the right to manage under the Commonhold and Leasehold Reform Act 2002?
10.7Unless apparent from the Tenancy Documents supplied, what is the service charge accounting period?
10.8Please give details of the annual service charge (for the Property as a whole) for the last three years (or longer if available) including copies of all certificates, auditors' reports, accounts and other documents relating to its calculation and apportionment.
10.9Please supply all of the following:
(a)a schedule of any services you provide to the Property and a breakdown of the costs of each service;
(b)details of any planned maintenance programme and projected expenditure;
(c)details of any sinking fund or reserve account and confirmation of whether it is held in a separate trust account; and
(d)details of the estimated annual service charge for the current period for the Property as a whole (not each Lettable Unit).
10.10In relation to each Let Unit please state:
(a)what proportion of the service charge is attributed to that Let Unit and how that proportion is calculated;
(b)whether there has been any variation of this proportion and whether any is contemplated;
(c)whether there are any capping or weighting provisions agreed with the Tenants; and
(d)whether there have been any disputes regarding the proportions payable?
10.11Please confirm that, if the Property were fully let then the total cost of providing the services would be recoverable from the Tenants of the Let Units. How do you deal with the proportion of service charge attributable to any Lettable Units that are not currently Let Units?
10.12If there are service charge arrears for any Let Unit please:
(a)state what sums are currently due but are unpaid; and
(b)provide a schedule of all service charge arrears over the past three years.
10.13Please supply:
(a)details of any expenditure that has been incurred by you in providing services to the Property since the end of the last Service Charge year; and
(b)copies of any estimates received in relation to service charge expenditure for the current Service Charge year, or from service charge contractors and evidence of consultation with the Tenants in respect of such expenditure.
10.14Except as already disclosed, have there been any complaints or disputes relating to the service charge? If yes, please give details, including in relation to any applications made to the First-tier Tribunal (Property Chamber) (previously called the Leasehold Valuation Tribunal) or to the court in respect of such complaints or disputes.
10.15Except as already disclosed, please provide copies of the following:
(a)any insurance policies and service and maintenance contracts for lifts and plant at the Property;
(b)any contracts for the provision of cleaning, security and other services at the Property; and
(c)contracts for the supply of gas, electricity, oil or other fuel to the Property.
10.16Please give details of:
(a)any managing agents; and
(b)any permanent staff employed for on-site management of the Property.
10.17What regulations have you made for the use and management of the Property that are not set out in the Tenancy Documents supplied?
10.18Please supply copies of any correspondence between you and any Tenant in relation to the Control of Asbestos Regulations 2012 or comparable predecessor regulations.
10.19Please supply copies of any correspondence between you and any Tenant in relation to any costs and expenses arising as a result of the Carbon Reduction Commitment Energy Efficiency Scheme in relation to the Property or, if appropriate, in relation to the building of which the Property forms part.
If a tenant does something which gives rise to a claim on the landlord's insurance, then as it is the landlord rather than the tenant who is the insured, the insurance company may pursue its own claim against the tenant who caused the loss, to recover the amount of the insurance claim. This is known as the insurance company's right of subrogation. This is considered to be unfair to the tenant if the tenant pays the cost of the insurance premiums. A tenant will usually therefore try to negotiate that the insurance company waives its rights of subrogation. In practice that is believed to be the common law position where the tenant pays the insurance premium, following the case of Mark Rowlands Ltd v Berni Inns Ltd [1986] QB 211, but the position is not free from doubt.
11.1Please state:
(a)what proportion of the insurance costs for the Property is allocated to each Lettable Unit and how that proportion is calculated;
(b)whether there has been any variation of this proportion for any Lettable Unit and whether any is contemplated;
(c)whether there have been any disputes regarding the proportions payable;
(d)what sums in respect of insurance costs for the Property are due but currently unpaid; and
(e)whether any Tenants have exercised their rights under section 30A of the Landlord and Tenant Act 1985 to require a summary of the insurance, or to inspect the policy of insurance, relating to the Property or the Let Unit?
11.2What, if any, arrangements have been made to exclude the insurer's right of subrogation against any of the Tenants?
The Buyer will be concerned to know the nature of any breach and whether it has been waived by the continued demand or acceptance of rent. The Seller should include not only breaches of the tenant covenants under the Tenancies but also any breaches of the landlord covenants for which the Seller is liable. The Buyer will want to know whether there are any continuing breaches of any landlord covenants, for which the Buyer may be liable on completion of the Transaction, and also in relation to any breaches, whether by landlord or tenant, what enforcement action has been taken, if any.
In relation to each current Tenancy:
Except as already disclosed in replies to CPSE.1 or in reply to other enquiries in this CPSE.6, please give details of:
(a)any disputes or complaints whether or not resolved; and
(b)any breaches or alleged breaches of covenant including details of any waiver whether express or implied.
13.Enfranchisement and extension
13.1Have any notices been served under any of the following:
(a)Part I of the Leasehold Reform Act 1967;
(b)Part I of the Leasehold Reform, Housing and Urban Development Act 1993; or
(c)Part II of the Leasehold Reform, Housing and Urban Development Act 1993?
13.2Please provide full details of any notice referred to in the reply to enquiry 13.1, including a copy of the notice, any counternotice and all subsequent correspondence.
14.Residential tenants' rights of first refusalIn this enquiry, references to the Building are references to the Property or to the building of which the Property forms part, and references to the LTA 1987 are references to Part I of the Landlord and Tenant Act 1987, as amended.
14.1Does the Building contain two or more flats, as defined by section 60(1) of the LTA 1987? If the answer to this enquiry is "No", please proceed direct to enquiry 14.6.
14.2Are two or more of the flats in the Building held by qualifying tenants, as defined in section 3 of the LTA 1987? If the answer to this enquiry is "No", please proceed direct to enquiry 14.6.
14.3Does the number of flats in the Building held by qualifying tenants exceed 50% of the total number of flats (whether let or not)? Please supply full details of:
(a)the number of flats in the Building;
(b)those flats which are let and those which are unlet; and
(c)which tenants are and are not qualifying tenants and why.
If the answer to this enquiry is "No", please proceed direct to enquiry 14.6.
14.4If part only of the Building is used for residential purposes, does the internal floor area of that part represent 50% or more of the internal floor area of the Building as a whole (disregarding common parts)?
Please give details of the areas of that part of the Building used for residential purposes and of the remainder of the Building.
If the answer to this enquiry is "No", please proceed direct to enquiry 14.6.
14.5Is the Landlord any of the following:
(a)an exempt landlord (as defined in section 58(1) of the LTA 1987);
(b)a resident landlord (as defined in section 58(2) of the LTA 1987); or
(c)a landlord who is not the immediate landlord of the qualifying tenants (except in the circumstances specified in section 2(2) of the LTA 1987)?
14.6Please supply copies of all notices and responses to notices served or received by you (or, to your knowledge, any predecessor in title) in respect of the Building pursuant to the LTA 1987, together with copies of all correspondence sent or received by you (or, to your knowledge, any predecessor in title) in respect of the Building relating to the LTA 1987.
15.Rent Act 1977 tenanciesWhere any Tenancy is regulated under the Rent Act 1977, please answer the following enquiries:
15.1Please state:
(a)when the Tenancy was first granted;
(b)whether the rent is registered and, if so, the amount of the current registered rent and the date of the most recent registration; and
(c)whether there has ever been a statutory succession of the Tenancy and, if so, full details of each such statutory succession.
15.2If not already supplied with the Tenancy Documents please provide copies of
(a)the rent book;
(b)the most recent rent register; and
(c)any Notice of Increase (in rent) served and evidence of its service.
15.3Where any Tenancy is considered to be a letting by a resident landlord under section 12 of the Rent Act 1977, please state:
(a)(unless apparent from the Tenancy Documents supplied) when the Tenancy was granted;
(b)the property occupied by the Landlord (including any family members) when the Tenancy was granted;
(c)whether you or any predecessor in title has continuously occupied that other property since the Tenancy was granted; and
(d)(where relevant) what steps (if any) you have taken, or propose to take, to terminate the Tenancy and recover possession.
15.4Where any Tenancy is considered to be a restricted contract under sections 34-36 of the Housing Act 1988, please state:
(a)(unless apparent from the Tenancy Documents supplied) when the Tenancy was granted;
(b)what furniture or services the Landlord is contractually obliged to supply to the Tenant;
(c)what furniture or services the Landlord actually supplies to the Tenant; and
(d)(where relevant) what steps (if any) you have taken, or propose to take, to terminate the Tenancy and recover possession.
15.5Where any Tenancy is considered to be a protected shorthold or a periodic protected tenancy under section 52 of the Housing Act 1980, please state:
(a)(unless apparent from the Tenancy Documents supplied) when the Tenancy was granted;
(b)what steps were taken to ensure that the statutory requirements for the creation of a protected shorthold tenancy were met;
(c)(where relevant) what steps (if any) you have taken, or proposes to take, to terminate the Tenancy and recover possession; and
(d)what steps (if any) have been taken by the Tenant to terminate the Tenancy.
16.Secure tenanciesWhere any Tenancy is considered to be a secure tenancy for the purposes of the Housing Act 1985, please answer the following enquiries:
16.1(unless apparent from the Tenancy Documents supplied) when was the Tenancy granted?
16.2Has there ever been a statutory succession of the Tenancy? If so, please provide full details of each such statutory succession.
16.3Where relevant, what steps (if any) you have taken, or propose to take, to terminate the Tenancy and recover possession?
16.4Where relevant, please state the statutory grounds upon which you propose to seek to recover possession.
16.5Is there any right to buy application pending? If so, please supply full details.
17.Long leases
17.1Were any of the current Tenancies originally granted for a term certain of more than 21 years ("long leases")?
17.2Have any applications been made under section 35 of the Landlord and Tenant Act 1987 for the variation of any of those long leases?
17.3Are any of the Tenants under those long leases continuing in occupation of the relevant Let Unit pursuant to Schedule 10 of the Local Government and Housing Act 1989 or Part 1 of the Landlord and Act 1954?
17.4For any Tenancy which is a long lease for the purposes of the Local Government and Housing Act 1989, please answer the following enquiries:
(a)For how long has the current Tenant been the tenant of the Let Unit comprised in the long lease?
(b)Have any notices been served to terminate the long lease or to propose a statutory tenancy? If so, please provide full details.
18.Assured tenancies and assured shorthold tenancies
An assured tenancy created before 28 February 1997 could not take effect as a shorthold tenancy unless the landlord first served a health warning notice on the tenant in a prescribed form.
Enquiry 18.5
The prescribed legal requirements referred to in enquiry 18.5 are that the landlord must have given the tenant:
the prescribed deposit protection details if there is a rent deposit; and
the current EPC.
In addition, a section 21 notice is not valid in certain cases where the tenant has made a written complaint to the landlord regarding the condition of the premises, the landlord has not given an adequate response, and the local housing authority has subsequently served an improvement notice under the Housing Act 2004. For more details see Legal update, Deregulation Act 2015: property aspects: Retaliatory eviction.
The above requirements (except in relation to deposit protection) initially apply only to assured shorthold tenancies granted on or after 1 October 2015. However, from 1 October 2018 most of these requirements will apply to all assured shorthold tenancies. Additionally, for assured shorthold tenancies granted on or after 1 October 2015, a section 21 notice to terminate the tenancy must be in a prescribed form.
Enquiry 18.6
The duty to check a tenant's "right to rent" applies to residential tenancy agreements entered into on or after 1 February 2016 (1 December 2014 in Birmingham, Walsall, Sandwell, Dudley and Wolverhampton). It does not apply to tenancies granted before that date, nor to a renewal of a tenancy originally granted before that date if made between the same parties with no break in the tenant's occupation.
Where the duty applies, a residential landlord must carry out “right to rent” checks on prospective occupiers. A landlord of residential premises must not allow an adult to occupy those premises as their only or main home unless he or she has a right to rent in the UK. A right to rent is enjoyed by anyone who is a British citizen, an European Economic Area or Swiss national, or who is lawfully present in the UK in accordance with immigration laws – this may be for a limited or an unlimited period.
There is a penalty of up to £3,000 if there is a breach, but landlords have a “statutory excuse” against liability if they:-
carry out an initial right to rent check before allowing an adult to occupy;
(where the check discloses a time limited right to rent) conduct follow-up checks on the appropriate date; and
report to the Home Office if those follow-up checks indicate that an occupier no longer has the right to rent.
Where any Tenancy is considered to be an assured tenancy or an assured shorthold tenancy under the Housing Act 1988 (as amended by the Housing Act 1996) please answer the following enquiries:
18.1Was the Tenancy granted to a person who, immediately before the Tenancy was granted, was a protected or statutory tenant or sub-tenant of the Landlord?
18.2For how long has the current tenant actually been in occupation of the Let Unit?
18.3For any assured shorthold tenancy created before 28 February 1997, what steps were taken to ensure that the statutory requirements for the creation of an assured shorthold tenancy were met?
18.4Have any notices been served by either the Landlord or the Tenant in relation to the Tenancy? If so please provide full details.
18.5Where applicable to the Tenancy, please provide evidence that the prescribed legal requirements that must be met before a notice may be served by the Landlord under section 21 of the Housing Act 1988 have been complied with.
18.6Where the "right to rent" rules apply to the Tenancy, please:
(a)confirm that the necessary checks of the Tenant's right to rent under sections 20 to 37 of the Immigration Act 2014 were conducted at the appropriate time and in the required manner;
(b)provide copies of the documents checked and evidence of when those checks were made.
This enquiry aims to minimise overlap with enquiry 9 of Con 29O, which asks if the Property is a house in multiple occupation or designated or proposed to be designated for selective licensing under the Housing Act 2004. The CPSEs should not ask for information that the Buyer can find out itself.
What enquiry 19.1 seeks to discover is whether the living arrangements are such that a Housing Act licence is required and that is information that cannot easily be ascertained by making enquiries of the local authority or by an inspection (without making intrusive enquiries of the occupants). Even if the Property is currently vacant, the question may still be relevant, because a house that should have had a licence before but didn't may be less likely to get one now.
19.1Are the current living arrangements at the Property such that it requires a Housing Act Licence?
19.2If the Property requires a Housing Act Licence, please:
(a)confirm that the Seller has obtained a Housing Act Licence;
(b)provide a copy of the Housing Act Licence; and
(c)confirm that the Seller is not aware of any breaches or alleged breaches of the terms of the Housing Act Licence or any disputes or complaints whether or not resolved.
Under the Leasehold Reform (Ground Rent) Act 2022, ground rents in "regulated leases" are not permitted.
Enquiry 20.1
Leases granted on or after the implementation date (30 June 2022) will not be regulated leases if granted pursuant to a contract entered into before implementation and the Buyer will be entitled to receive ground rents. However, it may not be clear whether or not a post-implementation lease was granted pursuant to a pre-implementation contract. Enquiry 20(1)(b) asks which, if any, leases granted on or after implementation were granted pursuant to a pre-implementation contract so that the Buyer knows it can lawfully collect the ground rent.
Enquiry 20.2
Some regulated leases (shared ownership and replacement leases) may continue to reserve a ground rent. Enquiry 20.2 asks which leases, if any, fall within this category.
Enquiry 20.3
The powers of enforcing authorities and the tribunal in sections 10(2) and 13(4) to order repayment of rents that should not have been demanded are wide enough to make the current landlord liable to repay rents demanded illegally by a former landlord. Enquiry 20.3 therefore asks whether the Seller or, to the best of its knowledge, any former landlord, has breached the requirements in section 3.
If there have been any disputes or enforcement proceedings, or any applications to determine the permitted rent under section 15, these should be disclosed in reply to enquiry 20 of CPSE.1 or enquiry 12 of CPSE.6.
In this enquiry, the “implementation date” is the date when the provisions of the Leasehold Reform (Ground Rent) Act 2022 (the Act) came into force for the purposes of the relevant Tenancy:
20.1In respect of any Tenancies granted on or after the implementation date:
(a)which of them are regulated leases for the purposes of section 1 of the Act;
(b)which of them are not regulated leases because they were granted in pursuance of a contract made before the implementation date; and
(c)which of them are excepted leases within section 2 of the Act?
20.2In respect of any regulated leases within section 1 of the Act, which of them may reserve a permitted rent greater than a peppercorn pursuant to either section 5 or section 6 of the Act?
20.3Has the Seller (or to the Seller’s knowledge, any former landlord) required or received payment of a prohibited rent or failed to repay a prohibited rent in breach of section 3 of the Act?
The Building Safety Act 2022 is one of the most far-reaching pieces of real estate legislation this century. Passed in response to the 2017 Grenfell Tower tragedy, this Act introduces many reforms including these four key elements among others:
a) A "gateway" process to ensure new "higher-risk" buildings are constructed safely and in accordance with Building Regulations.
b) "Accountable persons" to take responsibility for the safety of higher-risk buildings, once occupied, coupled with a system of registration.
c) A "golden thread" system for keeping all the safety-critical information relating to a higher-risk building in one place.
d) Substantial restrictions on the ability of landlords of "relevant buildings" to put the cost of remedying certain "building safety risks" through the service charge. "Relevant building" means a building that contains at least two dwellings and is at least 11 metres high or is at least 5 storeys high. “Building safety risk” means a risk to the safety of people arising from the spread of fire or the collapse of the building.
Enquiries relating to the gateway process in element (a) above would normally be raised by a Buyer's construction lawyers, where the site for a new higher-risk building is acquired while it is in the course of development.
Elements (b) and (c) are dealt with in new enquiry 15 of CPSE.1: General pre-contract enquiries for all commercial property transactions.
Element (d) above is addressed in this new enquiry 21, added to CPSE.6 in spring 2023.
The general aim of the enquiries is to ask for information, and particularly documents, that the Seller has and which the Buyer cannot itself easily get hold of. The CPSEs do not take the place of a structural survey or safety assessment.
The whole of enquiry 21 is applicable to properties in England ONLY. At present, there are no equivalent provisions where the property is in Wales.
Enquiry 21.1
This asks whether the Building is a relevant building. If the answer is yes, then enquiries 21.2 – 21.6 must be answered.
Enquiry 21.2
This enquiry relates to the provision of the information required to complete a landlord certificate.
The principal purpose of the landlord certificate is to inform the leaseholder of whether or not:
the relevant landlord’s group meets the “contribution condition”, ie. the group has a net worth of N x £2 million (N being the number of “relevant buildings” , in the landlord group); or
the relevant landlord (or any person associated with it) is responsible for the relevant defect.
Under paragraph 2 of Schedule 8 of BSA, if a relevant landlord (which in this case includes a superior landlord) was responsible for a relevant defect (or associated with a person responsible for a relevant defect), then no service charge is recoverable for remediation of a relevant defect from any tenant (whether qualifying or not). The relevant landlord will be treated as being responsible for the relevant defect unless the current landlord provides a landlord certificate when required.
Under paragraph 3 of Schedule 8 of BSA, if the relevant landlord under the lease meets the contribution condition, no costs incurred in remediating relevant defects can be passed on to qualifying leaseholders.
The tests under paragraphs 2 and 3 apply at the qualifying time (14 February 2022).
The BS (LP) Regulations specify the form of the landlord certificate and the prescribed documentation which must accompany the landlord certificate. The current landlord will not be able to pass on remediation service charge costs until it has provided a landlord certificate. The relevant landlord will be treated as having met the contribution condition unless the current landlord provides a landlord certificate when required.
The landlord certificate acts as a permanent record as to the status of the lease on 14 February 2022 and must contain details about the current landlord, who the landlord (including any superior landlord) was on 14 February 2022, their involvement in commissioning the defective work and any remediation works which have been carried out previously.
Whether a relevant landlord was responsible for a given relevant defect, and whether the contribution condition is satisfied, will most likely not be publicly available information. Whether a relevant landlord was responsible for any given relevant defect will require information about the works in question that gave rise to the relevant defect. Whether a relevant landlord met the contribution condition at the qualifying time requires information about the corporate structure of the landlord group, the financial position of the landlord and its group, and other relevant buildings owned by the relevant landlord and its group. This information only needs to be provided with the landlord certificate if the relevant landlord is certifying that it does not meet the contribution condition.
Other information not directly connected to the certificate may need to be provided by the current landlord in the landlord certificate. In particular, costs for relevant measures relating to relevant defects incurred in the five years up to 28 June 2022 count towards the permitted maximum liability cap set out in paragraph 5 of the BS (LP) Regulations. Where relevant, the landlord will need to inform leaseholders of any costs that have been incurred to date, and of the leaseholder's maximum liability going forward.
Where the current landlord has provided a landlord certificate to a leaseholder, they must provide a copy of that certificate to any other landlords of premises in the building, the RMC, RTM company or named manager within one week of providing the certificate to the leaseholder. Failure to comply with this requirement means that the costs of a relevant measure in relation to the relevant defect to which the certificate relates are irrecoverable.
Knowingly providing false or misleading information is a criminal offence. In England, where a leaseholder believes that a landlord has made a false claim in a landlord’s certificate, a leaseholder can make an application to the First-tier Tribunal (Property Chamber) requiring the relevant landlord to provide specified information or documents.
Landlords who acquire the Building after 14 February 2022 will face limits on their ability to recover costs from leaseholders which will depend on the status of the landlord as at the qualifying time – 14 February 2022. Hence, it is important for the Buyer to seek the information about that status that it needs to complete a landlord certificate. The more time that passes before the current landlord serves its first certificate, the more difficult it could be to find the information relating to the qualifying time, particularly if the building has changed hands during the intervening period. When providing a landlord certificate the information in the certificate relating to defects and remedial costs paid will need to be updated as and when necessary.
Enquiry 21.3
Regulation 6(1) of BS (LP) Regulations state that a landlord's certificate must be provided to the leaseholder:
when the current landlord makes a demand to a leaseholder for the payment of a "remediation service charge", (i.e. any service charge that includes costs for the remediation of defects causing a building safety risk);
within four weeks of receipt of notification from the leaseholder that the leasehold interest is to be sold;
within four weeks of becoming aware (either themselves or by notification from another person) of a relevant defect not covered by a previous landlord’s certificate;
within four weeks of being requested to do so by the leaseholder; or
within four weeks of becoming aware of a new leaseholder deed of certificate which is in relation to a lease of a dwelling in the building of which the current landlord is the landlord and which contained information that was not included in a previous landlord's certificate.
This enquiry seeks confirmation that the Seller is not aware of any breach of this obligation as failure to provide a landlord certificate will affect future recovery of remediation costs from the leaseholders.
Enquiry 21.4
Where a landlord has paid or is liable to pay the cost of a relevant measure in respect of a relevant defect (where such costs are not recoverable as service charge) then the BS (LP) (I) Regulations require the landlord to serve notices seeking repayment of such costs from other landlords, such as the relevant landlord (including any superior landlord) who was responsible for the relevant defect (or any associated party), or any landlord who acquired the interest of the landlord responsible for the relevant defect after 14 February 2022, or any relevant landlord that meets the contribution test.
This enquiry seeks confirmation that notice has been given to other landlords to recover remediation sums which, but for Schedule 8 BSA, would have been payable by a leaseholder as service charge.
Enquiry 21.5
Paragraph 13 of Schedule 8 of BSA makes provision for determining whether a lease is a qualifying lease as defined in section 119 of BSA. Whether a lease is qualifying determines whether the lease, and therefore the leaseholder under the lease qualifies for the leaseholder protections set out in Schedule 8 of BSA. However, note that para 2 of Schedule 8 BSA also benefits tenants under leases which are not qualifying leases.
Not all leases will be qualifying. Landlords will need to know which leases in their building are qualifying, as that will determine the extent to which they are legally permitted to pass remediation costs on to leaseholders through the service charge. Whether a lease is qualifying depends on its ownership at the qualifying time, which is the start of 14 February 2022. The qualifying lease status is automatically transferred to future leaseholders of the dwelling.
Pursuant to the BS (LP) (I) Regulations each leaseholder must provide a leaseholder deed of certificate and prescribed documentation to their landlord demonstrating that their lease is qualifying. A lease is to be treated as being a qualifying lease unless the landlord has sought to obtain a certificate from the leaseholder and has been unable to do so. If the landlord has exhausted all reasonable steps and complied with all prescribed steps to obtain a certificate and has been unsuccessful, then the landlord may assume the lease is non-qualifying until such a time as a valid leaseholder deed of certificate is provided.
The BS (LP) (I) Regulations set out the detailed steps that the landlord must take when attempting to obtain a leaseholder deed of certificate, the prescribed form of the certificate, the supporting information and evidence that must be provided with it and the way in which the leaseholder is required to execute the certificate.
This enquiry relates to the circumstances in which the current landlord must serve notice on the leaseholder requiring the provision of a leaseholder deed of certificate.
The landlord must serve the notice before the "notification date" which is defined as the day which is five days after the day on which the landlord becomes aware that the interest in the property owned by the leaseholder is to be sold or, there is a relevant defect in relation to the building in question.
There are other important factors relating to the qualifying lease that will need to be ascertained in determining the qualifying leaseholder’s potential liability (if any). Paragraphs 4 to 6 of Schedule 8 of BSA set out that the maximum liability of a qualifying leaseholder varies according to the value of the qualifying lease. Both the leaseholder and the landlord will need to know the value of the qualifying lease so that the landlord is aware of what costs they can pass on to the leaseholder, should they be entitled to do so (i.e., where the relevant landlord for the Building was not responsible for the defects and where the relevant landlord does not meet the contribution condition). Therefore the certificate must also provide information about the property’s most recent sale price and date to the landlord. In addition, paragraph 6(5) of Schedule 8 of BSA sets out that, for shared ownership leases, the permitted maximum is calculated in proportion to the leaseholder’s equity stake in the property, so this information will also need to be provided to the landlord (where appropriate). Knowingly providing false or misleading information is a criminal offence.
Whether a lease is qualifying depends on the ownership of the lease at the qualifying time (14 February 2022), not on the date on which the certificate is executed. As such, leaseholder deeds of certificates will be important legal documents that will need to be passed to future owners on the sale of the reversion.
Within one week of receiving a leaseholder deed of certificate, the current landlord must provide a copy of the certificate to any RMC, RTM company or named manager in relation to the building to which the certificate relates. Failure to comply with the requirement means that the costs of a relevant measure in relation to the relevant defect to which the leaseholder deed of certificate relates are irrecoverable.
Enquiry 21.6
This enquiry asks for copies of the leaseholder deeds of certificate to be provided (unless already supplied).
Enquiry 21.7
Section 133 of the BSA inserts new section 20D in the Landlord and Tenant Act 1985 requiring landlords wishing to include costs in the service charge for certain remediation works to:
take reasonable steps to ascertain whether any grant is payable in respect of the remediation works and, if so, to obtain the grant;
take reasonable steps to ascertain whether monies may be obtained from a third party in connection with the remediation works and, if so, to obtain monies from the third party; and
take prescribed steps relating to any other prescribed kind of funding.
New section 20D applies to buildings in England of a prescribed description and is to be brought into force at a future date.
NOTE: enquiry 21 applies to England only, and need not be answered for properties in Wales.
Building: means the Property (where it comprises an entire building) or the building of which the Property forms part.
BS(LP) Regulations: means The Building Safety (Leaseholder Protections) (England) Regulations 2022 (No. 711).
BS(LP)(I) Regulations: means The Building Safety (Leaseholder Protections) (Information etc.) (England) Regulations 2022 (No. 859).
Unless otherwise indicated, all other terms used in this enquiry 21 have the same meanings as set out in the BSA as amended from time to time.
21.1Is the Building a "relevant building" as defined in section 117 of the BSA?
If yes then please answer enquiries 21.2 to 21.6 below. If no, please go to enquiry 21.7.
21.2Please provide all the information necessary to complete the landlord's certificate and provide all the required supporting evidence as referred to in regulation 6 of the BS(LP) Regulations.
21.3Is the Seller aware of any breach of any of the following:
(a)regulation 6(1) of the BS(LP) Regulations (duty to provide landlord certificate to leaseholder);
(b)regulation 6(9) of the BS(LP) Regulations (duty to provide copy landlord certificate to other landlords and certain third parties); or
(c)regulation 6(10A) of the BS(LP)(I) Regulations (duty to provide copy leaseholder deed of certificate to certain third parties)?
21.4If any of regulations 3, 4, or 5 of the BS(LP)(I) Regulations applies to the Seller, please confirm the Seller has served the relevant notices and provide copies (unless already supplied).
21.5Unless already supplied, please provide copies of all notices sent to any leaseholder in the Building under regulation 6(2) and 6(8) of the BS(LP)(I) Regulations together with any written requests received from any leaseholders pursuant to regulation 6(9) of the BS(LP)(I) Regulations where a leaseholder deed of certificate has not yet been received by the Seller.
21.6Unless already supplied, please provide copies of all leaseholder deeds of certificate (including all the supporting information as referred to in regulation 6(7) of the BS(LP)(I) Regulations) which have been received from leaseholders in relation to the Building and confirm that the originals will be handed over on completion.
21.7If section 20D of the Landlord and Tenant Act 1985 (as inserted by section 133 of the BSA) applies to any works that have been or are to be carried out at the Property:
(a)What steps have you taken to comply with section 20D?