Article contributed by Ian Quayle

TA7 and LPE 1 and The Building Safety Act 2022 

• The TA7  

The TA7 is now in its third edition and contains additional questions concerning the Building Safety Act 2022. 

There are two obvious problems. First of all, the form does not contain any guidance for the seller client to read and be aware of. Secondly, it generates questions containing technical terms within the BSA (Building Safety Act) 2022 that the seller client might not (probably will not) understand. 

Some of the key questions to be answered in the form TA7 include: 

2.1 Who owns the freehold?  

If the leaseholder confirms that the freehold is owned by a person or company that the tenant controls, the BSA 2022 Schedule 8 protection in connection with service charge cannot apply. A seller is unlikely to be able to provide an answer to this question.  

2.3 Who is responsible for managing the building? 

The answer to this question is important to determine who is the landlord or the relevant person in order to establish who should be responsible for remediation costs, who should be serving a landlord certificate, and who should be served with a leaseholder deed of certificate. 

3.2 Please supply a copy of any correspondence from the landlord, any management company, and any managing agent.  

The documentation produced could be significant as it could include a request from the landlord for the production by the seller leaseholder of a leaseholder deed of certificate, documentation relating to the landlord’s obligation to consult on proposed service charge costs under the Landlord and Tenant Act 1985, and information concerning building safety and building safety charges under the BSA 2022. 

The seller may not be able to produce the documentation required by this question and it is more likely to be included in the LPE1 from the landlord.  

3.3 Please supply a copy of any invoices or demands and any statements and receipts for the payment of –  

1. a) maintenance or service charges for the last three years
2. b) ground rent for the last three years

When acting for the buyer where documentation is provided in connection with 3.3 a) it needs to be considered to ascertain whether the landlord has incurred or could incur service charges costs relating to relevant defects as defined by the BSA 2022 for which remediation is required. 

5.5 Does the seller know of any expense (e.g., the cost of redecoration of outside or communal areas not usually incurred annually likely to be shown in the service charge accounts within the next three years? If yes, please give details. 

Where the seller provides information relating to expenses not usually incurred, again, the buyer client should be made aware of the disclosure caution and a recommendation made that further specialist advice is sought from a surveyor or fire safety specialist depending on what the work relates to.  

If acting for the buyer and information is provided, the buyer should be warned that there could be expenses relating to works which the seller does not know of and which the landlord is not aware of which are not disclosed in the answer to this question but which the buyer client could be liable for.  

5.8. Does the seller know of the existence or suspected existence in the building of cladding or any defects that may create a building safety risk? If yes, please give details  

This question is problematic because how will a seller know what a cladding or any defect is that might create a building safety risk?

The seller should be advised to answer this question in terms that he or she does not know whether cladding or any defect could create a building safety risk as he or she does not know what a building safety risk is. In an effort to be helpful, the seller could confirm they are not aware and have not been told of any cladding or other defect, and or could disclose that they do know or suspect cladding or defects that might create a building safety risk but that there may be other building safety risks that the seller is not aware of.  

If acting for the buyer and information is provided, the buyer should be warned that there could be expenses relating to works which the seller does not know of and which the landlord is not aware of which are not disclosed in the answer to this question but which the buyer client could be liable for.  

5.9 is the seller aware of any difficulties encountered in collecting the service charges from other flat owners? If yes, please give details. 

This question is also problematical as how would a seller be aware of any difficulties and what difficulties have been encountered in collecting service charges – disputes, leaseholder’s inability to pay, steps being taken by landlords to recover from third parties, disputes concerning service charge covered by Schedule 8 of the BSA 2022. 

If acting for a buyer, then the client should be told where the seller has disclosed any difficulties, as there could be other difficulties which the seller has not disclosed.  

6.2 Has the seller received any other notice about the building, its use, its condition or its repair and maintenance? If yes, please supply a copy.  

SELLER: Where the seller produces any documentation in answer to this question the conveyancer for the buyer should assess it to determine whether it reveals the potential for service charge liability for remediation of relevant defects or the potential for such liability or additional service charge or building safety charge costs.  

BUYER: If acting for the buyer and information is provided, the buyer should be warned that there could be expenses relating to repair and maintenance which the seller does not know of, or which are not disclosed but which the buyer client could be liable for.  

A new Section 11 has been introduced into the TA7  

11.1 Have any remediation works on the building been proposed or carried out? 

SELLER: The problem here is that a seller is unlikely to know what remediation works are. If acting for a seller, he/she should have been given an explanation as to what remediation works are.  

BUYER: If acting for a buyer and the seller discloses that remediation works have been done a problem arises. The solution is either to warn the buyer that the landlord has undertaken remediation work and the cost of that work could be transmitted into a service charge or building safety charge which the buyer may be liable for and to limit the scope of the retainer in that regard, or to suggest the client obtains advice from a surveyor as to what work has been done and or that further enquiries are made of the landlord.  

11.2 Is the lease of the property a qualifying lease? 

A similar problem arises as to 11.1 above.  

SELLER: The seller is only likely to be able to answer this question if the seller’s conveyancer/solicitor has explained what a qualifying lease is or has confirmed to the seller client that the lease is or is not a qualifying lease.  

BUYER: It is important to explain to the buyer that the seller may not be able to confirm whether the lease being sold is a qualifying lease. If it is possible to confirm the lease is a qualifying lease by an examination of the leaseholder deed of certificate and the flat/apartment is in a relevant building, then the client can be advised that the protection from the risk of the landlord being able to include remediation costs into service charge in the future is reduced. Where this is not the case the buyer should be warned that the potential protection provided by Schedule 8 of the BSA 2022 will not apply.  

11.3 Is there a leaseholder deed of certificate for the property? 

If yes – 

(a) Did the seller (the current leaseholder) complete the deed of certificate or was it completed by a previous leaseholder? 

(b)  Please supply a copy of the leaseholder deed of certificate and the accompanying evidence 

SELLER: The seller should be able to confirm whether there is a leaseholder deed of certificate, but this question does highlight the importance of ensuring the leaseholder deed of certificate is kept safely as it is an important document going forward.  

Remember the seller can produce a leaseholder deed of certificate at any time and is required to produce a leaseholder deed of certificate when the landlord asks for one and has eight weeks to do so. The leaseholder can ask for an extension of time for a further four-week period. A landlord must send a leaseholder a request for a leaseholder deed of certificate within five days of finding out the seller intends to sell or finding out there is a relevant defect in the property. 

Neither the Act nor the Regulations compel the seller to provide a leaseholder deed of certificate but a buyer of a lease of a property in a relevant building could not proceed without one. 

The accompanying evidence should be a copy of the lease of the property and evidence to confirm ownership, occupation and additional dwellings owned by the owner of the property as at the 14.2.22.   

BUYER: The buyer should be advised that it is impossible to confirm or verify the accuracy of the information provided by the seller in the leaseholder deed of certificate and if the certificate contains defective information the lease may not be a qualifying lease meaning the lease will not be afforded the protection from remediation costs that is provided by Section 8 of the BSA 2022.  

11.4. Has the Freeholder/Landlord been notified of the intention to sell? 

This is an important question as notification would trigger the need for a landlord to produce a landlord certificate. The landlord then has four weeks from notification to produce the certificate.  

The notification may also trigger the landlord serving notice on the seller to produce a leaseholder deed of certificate. The landlord has five days from receipt of notification (five days after the day the landlord becomes aware that the interest of the leaseholder is to be sold) to serve notice on the seller requesting a leaseholder deed of certificate but the leaseholder then has eight weeks capable of being extended to twelve weeks to produce the certificate. 

SELLER: The seller should be asked if the seller or anyone on the seller’s behalf has given notice to the landlord of the seller’s intention to sell. Ideally, formal notice should have been given and a record of the date of notice retained.  

BUYER: The solicitor/conveyancer for the buyer should ask the seller to confirm the date and method of notification of sale. Where the seller has not notified the landlord of the intention to sell, he/she should be notified of the need to give formal written notice of that intention either directly by the seller or via the seller’s solicitor/conveyancer. The date of service of the notice should be recorded.  

11.5 Has the seller received a landlord’s certificate and the accompanying evidence? 

If yes, please supply a copy of the Landlord certificate and the accompanying evidence 

SELLER: This is an important question as where a seller has not received a landlord certificate within four weeks of the landlord being notified by the seller of a sale or receiving a request from the seller for a landlord certificate (assuming the lease is a qualifying lease and the building a relevant building) the landlord cannot claim remediation costs for relevant defects.  

BUYER: The solicitor/conveyancer for the buyer should raise an additional enquiry of the seller asking when the seller received the landlord certificate. 

The solicitor/conveyancer should warn the buyer client that it will be difficult if not impossible to verify the accuracy of the content of the landlord certificate and supporting documentation.  

The solicitor/conveyancer for the buyer should ask an additional enquiry: 

Is the building in which the property is being sold a relevant building for the purposes of the BSA 2022 and has the principal accountable person registered the building as required under Section 78 of the BSA 2022? 

The revised LPE 1 

We now have the fourth version of the LPE1 form which includes a number of additional questions covering: 

• Whether the Leaseholder Deed of Certificate has been served on the Landlord in relation to the sale of the property or remedial works required to the property? 
• Whether a Landlord’s Certificate has been served? 

• Where there is any outstanding enforcement action against the Landlord or accountable person (As they will be known once Part 4 of the Building Safety Act 2022 is commenced during 2023.), such as outstanding enforcement notices 

The form also includes new requests for documents covering the Leaseholder Deed of Certificate, the Landlord’s Certificate, and any known enforcement action taken. Definitions for the Leaseholder Deed of Certificate and the Landlord’s Certificate have been added, plus an amendment to the definition of a Right to Manage Company. 

A copy of the revised form can be found at arma.org.uk where in due course landlords and managing agents will be able to access revised ARMA guidance on completing the LPE 1. The current guidance highlights the need for landlords and managing agents to consider disclaimers for the information provided and documents annexed.  

The landlord may disclose information concerning remediation works for relevant defects under the BSA 2022 and the solicitor/conveyancer for the buyer should warn the client that the remediation works, and information may not be accurate, and the same warning should be given concerning the content of the landlord certificate and leaseholder deed of certificate if included with the LPE 1 replies.