The Building Safety Act 2022 represents the most significant reform of the landlord-leaseholder relationship in relation to building safety since the Landlord and Tenant Act 1985. The leaseholder protections in Part 5 and Schedule 8 of the BSA 2022 are deliberately calibrated to protect 'qualifying leaseholders' — primarily owner-occupying leaseholders who are not property developers or significant property investors — from bearing the costs of defects they did not cause. The financial burden falls instead on the landlord/freeholder in most cases (unless the landlord can demonstrate the defect was the developer's fault, in which case a 30-year developer liability lookback applies). The regime has created significant financial exposure for some freeholders of high-rise residential blocks and has driven a wave of remediation contribution order applications to the First-tier Tribunal.
Relevant Buildings and Qualifying Leaseholders — Who the Protections Apply To
The BSA 2022 leaseholder protections apply in relation to 'relevant buildings' and 'qualifying leaseholders': (a) Relevant buildings: a 'relevant building' for the purposes of the Schedule 8 protections is a self-contained building (or self-contained part of a building) that: (i) contains at least 2 dwellings; and (ii) is at least 11 metres in height OR has at least 5 storeys above ground level; the definition uses 'storeys' in the building (not just the number of residential floors) — plant rooms and basements are excluded from the storey count; where a building is below the 11m/5-storey threshold, the Schedule 8 protections do not apply; (b) Qualifying leaseholders: a 'qualifying leaseholder' is a person who: (i) holds a long lease of a dwelling in a relevant building; and (ii) was (or had rights to become) the registered proprietor of the lease on 14 February 2022 (the day the BSA 2022 was introduced as a Bill); (iii) the dwelling was the leaseholder's principal residence on 14 February 2022 OR the leaseholder does not own more than 3 dwellings in the UK (including the dwelling in the relevant building) on that date; (c) Non-qualifying leaseholders: leaseholders who own more than 3 UK dwellings (including the dwelling in the relevant building) are non-qualifying; the Schedule 8 protections do not apply to their service charges; buy-to-let investors with large portfolios (4 or more properties including the flat) lose the protection; leaseholders who acquired their flat after 14 February 2022 are not qualifying leaseholders unless the seller assigned the qualifying status to them at the time of the sale (the leaseholder deed of certificate transfers with the lease); (d) The leaseholder deed of certificate: a qualifying leaseholder must provide a 'leaseholder deed of certificate' to the landlord confirming their qualifying status; the form of the leaseholder deed of certificate is prescribed by the Building Safety (Leaseholder Protections) (England) Regulations 2022; without a valid leaseholder deed of certificate, the landlord cannot definitively establish whether the leaseholder qualifies for the protections.
- Relevant building threshold: 11m or more in height OR 5 or more storeys above ground; buildings below this threshold are not subject to the Schedule 8 protections
- Qualifying leaseholder: must hold a long lease; must have owned (or had rights to own) the lease on 14 February 2022; must have been in residence on that date OR must not own more than 3 UK dwellings
- Three-property investor exclusion: a leaseholder who owns 4 or more properties (including the flat in the relevant building) on 14 February 2022 is a non-qualifying leaseholder — the protections do not apply
- Leaseholder deed of certificate: the prescribed form by which a leaseholder demonstrates qualifying status; transfers with the lease on any assignment after 14 February 2022; without it the landlord cannot confirm whether protections apply
- Assignment of qualifying status: where a flat is sold after 14 February 2022, the seller's qualifying status transfers to the buyer at the point of assignment — ensuring that flats in relevant buildings can be sold without the buyer losing the protections
Schedule 8 — What Costs Landlords CAN and CANNOT Charge to Qualifying Leaseholders
Schedule 8 to the BSA 2022 sets out a detailed framework for the service charge treatment of building safety remediation costs for qualifying leaseholders in relevant buildings: (a) Cladding remediation costs — full protection (cannot charge): qualifying leaseholders cannot be charged through service charges for the cost of remediating any 'relevant defect' that is a cladding system defect (i.e. a defect in, or a deficiency in the installation of, external wall insulation and cladding systems); this protection is absolute — even where the landlord is not the developer and had no involvement in the original construction; (b) Non-cladding defects — landlord-dependent protection: for non-cladding remediation costs (e.g. defective fire doors; compartmentation; Aluminium Composite Material balcony decking; defective building structure), the position depends on the net worth of the 'relevant landlord': (i) where the relevant landlord (and associated landlords up the ownership chain) is worth £2 million or more per relevant building in the group: they must pay the non-cladding defect costs; they cannot charge them to qualifying leaseholders; (ii) where the relevant landlord is worth less than £2 million per relevant building: the non-cladding defect costs can be charged to qualifying leaseholders — but subject to a service charge cap; (c) The service charge cap: for non-cladding defect costs where the landlord is below the £2 million threshold, qualifying leaseholders are protected by a cap: £10,000 per qualifying leaseholder in buildings outside London; £15,000 per qualifying leaseholder in London; (d) Developer liability — 30-year lookback: where the relevant defect was caused by a 'relevant person' (a developer, contractor, or professional involved in the original construction or refurbishment), the relevant person is liable for the remediation costs regardless of whether they are the current landlord; the liability extends back 30 years from the date of the defect (capped by the 30-year lookback period in BSA 2022 s.135); the landlord can pursue the developer for reimbursement of costs already paid; (e) Building Safety Act remediation contribution orders (RCOs): where a landlord has paid remediation costs and wishes to recover them from the developer, or where costs are disputed, either the landlord or the qualifying leaseholder can apply to the First-tier Tribunal for a remediation contribution order under BSA 2022 s.124.
- Cladding defect costs: cannot EVER be charged to qualifying leaseholders in relevant buildings — complete protection regardless of the landlord's identity or financial position
- Non-cladding defect costs: the landlord's net worth determines liability; landlords worth £2m+ per building must absorb non-cladding costs; landlords worth less can pass them through subject to the £10,000/£15,000 service charge cap per leaseholder
- Service charge cap: £10,000 (outside London) / £15,000 (London) per qualifying leaseholder for non-cladding defect costs where the landlord is below the £2m threshold
- Developer liability — 30-year lookback: developers and contractors who caused the defect are liable for 30 years from the date of the defect; landlords can pursue developers via remediation contribution orders in the First-tier Tribunal
- Remediation contribution orders: First-tier Tribunal can order developers, contractors, or landlords to pay the costs of remediation; both leaseholders and landlords can apply
The Landlord Certificate — Obligations on the Freeholder/Head Lessor
The BSA 2022 requires the 'relevant landlord' of a relevant building to provide a 'landlord certificate' to qualifying leaseholders (and to the First-tier Tribunal on request). The landlord certificate is the counterpart to the leaseholder deed of certificate: (a) What the landlord certificate must confirm: the landlord certificate must state whether the landlord (and any associated group of landlords up the ownership chain) meets the £2 million per building net worth threshold; where the landlord is below the threshold, the certificate must confirm this and that the service charge cap (£10,000/£15,000) applies; (b) Who must issue the certificate: the 'relevant landlord' — which is the person to whom the service charge is payable; this is typically the freeholder, the head lessor, or (where an RTM company has taken over management) the RTM company; (c) Timing: the landlord certificate must be provided on request by a qualifying leaseholder, by any potential purchaser of the lease, or by the First-tier Tribunal; there is no automatic periodic obligation to provide the certificate — it is triggered by request; (d) Consequences of failure to provide: where a landlord fails to provide a landlord certificate, the leaseholder may apply to the First-tier Tribunal for a determination of whether the landlord certificate would (if served) have confirmed the £2 million threshold was met; if the Tribunal determines the threshold is met, the landlord cannot charge non-cladding costs to the leaseholder; (e) Impact on sale: where a leaseholder wishes to sell their flat, the landlord certificate (together with the leaseholder deed of certificate) is a critical part of the transaction due diligence; conveyancers and mortgage lenders require these documents for flats in relevant buildings; failure to provide them can delay or prevent a sale.
- Landlord certificate confirms net worth position: below £2m per building = service charge cap applies for non-cladding costs; £2m+ per building = landlord absorbs non-cladding costs entirely
- Must be provided on request: by qualifying leaseholders; potential purchasers; First-tier Tribunal; no automatic periodic issue obligation
- Failure to provide: leaseholder can apply to the Tribunal for a determination; Tribunal may determine that the landlord must absorb non-cladding costs
- Critical for property sales: buyers, conveyancers, and mortgage lenders require leaseholder and landlord certificates for flats in relevant buildings; ensure these documents are available before marketing any flat in a high-rise block
- RTM company obligations: where an RTM company manages the building, it is the 'relevant landlord' for the purpose of the landlord certificate and Schedule 8; RTM companies must understand and comply with these obligations
Practical Implications for Freeholders and Managing Agents
The BSA 2022 leaseholder protections have significant practical implications for freeholders, managing agents, and RTM companies managing relevant buildings: (a) Service charge demands: any service charge demand for building safety remediation works that would breach the Schedule 8 protections is unlawful; a leaseholder can apply to the First-tier Tribunal to have such a charge struck down; the landlord may also face a civil penalty; (b) EWS1 and mortgage lending: many flats in relevant buildings (and some buildings below the threshold) require an External Wall Survey (EWS1 form) for mortgage lending purposes; RICS guidance governs who can sign an EWS1 form; the absence of a valid EWS1 form can prevent a leaseholder from selling or mortgaging their flat; the landlord has a financial incentive to facilitate EWS1 surveys to maintain the liquidity of leaseholder interests in the building; (c) Building Safety Manager: buildings above 18 metres (or 7 storeys) are 'higher-risk buildings' requiring registration with the Building Safety Regulator and a 'principal accountable person' who must produce a safety case and register the building; (d) Service charge fund management: managing agents must maintain separate accounts for qualifying and non-qualifying remediation costs; mixing qualifying and non-qualifying remediation costs in service charge demands can expose the landlord to a Tribunal challenge; (e) Identifying relevant defects: the first step for any landlord of a relevant building is to commission a building safety assessment from a qualified fire engineer or building surveyor to identify all relevant defects — cladding and non-cladding — so that the likely remediation costs can be quantified and the Schedule 8 protections applied correctly; (f) Insurance: building insurance for relevant buildings must cover all rebuilding costs; where cladding or structural defects are known, insurers may apply coverage exclusions or significantly increased premiums — landlords should ensure the policy covers fire risk associated with any identified defects pending remediation.
- Unlawful service charge demands: any charge to qualifying leaseholders that breaches Schedule 8 is unlawful and can be challenged at the First-tier Tribunal; the landlord bears the financial risk of unlawful demands
- EWS1 form impact on sales: the absence of a valid EWS1 form prevents mortgage lending on many flats in relevant buildings; landlords should facilitate EWS1 surveys to maintain the marketability of leaseholder interests
- Higher-risk buildings (18m+): buildings above 18m require principal accountable person registration with the Building Safety Regulator and a safety case; additional duties beyond Schedule 8 apply
- Segregated service charge accounts: keep qualifying remediation costs (subject to Schedule 8) separate from non-remediation costs in service charge demands; mixing them invites Tribunal challenge
- Commission a building safety assessment: the essential first step; a qualified fire engineer or building surveyor can identify all relevant defects, quantify likely costs, and confirm which are cladding vs non-cladding — enabling correct Schedule 8 cost allocation
Frequently asked questions
What buildings are covered by the BSA 2022 leaseholder protections?+
The Schedule 8 leaseholder protections apply to 'relevant buildings' — self-contained buildings (or parts) containing at least 2 dwellings that are either 11 metres or more in height, or have 5 or more storeys above ground level. Buildings below the 11m/5-storey threshold are not subject to the Schedule 8 protections, though other building safety obligations may still apply.
Who is a qualifying leaseholder under the Building Safety Act 2022?+
A qualifying leaseholder is someone who held a long lease of a dwelling in a relevant building on 14 February 2022, and either: (a) the dwelling was their principal residence on that date; or (b) they own no more than 3 dwellings in the UK (including the dwelling in the building) on that date. Large-scale investors owning 4 or more UK properties (including the flat) do not qualify for the Schedule 8 protections.
Can I charge qualifying leaseholders for cladding remediation costs?+
No. The BSA 2022 Schedule 8 provides complete protection against cladding system defect remediation costs for qualifying leaseholders in relevant buildings. This protection is absolute — regardless of the landlord's financial position, the leaseholder's ability to pay, or the landlord's connection to the original construction. The prohibition applies even if the current landlord acquired the building after the defects were identified.
What is the service charge cap for non-cladding defect costs?+
For qualifying leaseholders in relevant buildings where the landlord is worth less than £2 million per building, non-cladding remediation costs can be charged through service charges — but subject to a cap of £10,000 per qualifying leaseholder (£15,000 in London). Where the landlord (and associated group of landlords up the ownership chain) is worth £2 million or more per relevant building, they must absorb all non-cladding remediation costs without passing them to qualifying leaseholders.
What is a landlord certificate and when must I provide one?+
A landlord certificate is a prescribed document under the Building Safety Act 2022 that the relevant landlord must provide to qualifying leaseholders (and the First-tier Tribunal) on request. It confirms whether the landlord meets the £2 million per building net worth threshold — which determines whether the service charge cap applies to non-cladding remediation costs. The certificate is also required by conveyancers and mortgage lenders when a flat in a relevant building is sold, so it is essential to have it available when marketing any high-rise flat.