Schedule 8: Remediation costs under qualifying leases Paragraph 14: Presumptions relating to landlord under qualifying lease Background
This is a new provision.
	Paragraphs 2 and 3 of Schedule 8 set out the circumstances in which landlords of relevant buildings are prevented from passing on any costs to leaseholders. Under paragraph 2, if a landlord was responsible for a relevant defect, they may not pass on any costs to any leaseholders in the building. Under paragraph 3, if the landlord under the lease meets the contribution condition, they will not be able to pass on any costs to qualifying leaseholders. The tests under paragraphs 2 and 3 apply at the qualifying time. For example, the conditions at paragraph 3 are satisfied if the landlord at the qualifying time met the contribution condition. If that landlord subsequently sells their interest in the building, the new owner of the interest in the building assumes the liabilities of the previous landlord and thus is treated as having met the contribution condition. In other words, new landlords assume the liability of the landlords as at the qualifying time.
	Whether a landlord was responsible for a given relevant defect, and whether they met the contribution condition, will most likely not be publicly available information. Whether a landlord was responsible for given relevant defect according to paragraph 2 will require information about the works in question that gave rise to the relevant defect. Whether a landlord met the contribution condition will require information about the structure of the landlord group, the financial position of the landlord and its group, and other relevant buildings owned by the landlord and its group. The landlord will therefore need to provide this information to leaseholders.
	Paragraph 14 and regulations made under it (as well as paragraph 16) will ensure full transparency in respect of this information. Full transparency is important as the information needed to determine whether the conditions at paragraphs 2 and 3 are met will not be readily available to leaseholders. Where building owners and landlords have used complex or opaque group structures, it would be possible to obscure the true picture without stringent transparency requirements.
	Paragraph 14 creates a presumption that the landlord is treated as having met the contribution condition unless they provide leaseholders with proof that they do not meet the contribution condition. This proof is to be provided in the form of a certificate which must comply with prescribed requirements. This means that the landlord under the lease will not be able to pass costs on to qualifying leaseholders until they have provided evidence to leaseholders proving that they did not meet the contribution condition. If the landlord does not provide this information, the landlord is legally treated as having met the contribution condition. Regulations will make analogous provision in respect of proving that a landlord was not responsible for relevant defects according to paragraph 2.
	If the leaseholder is not satisfied that the information provided by the landlord proves that they do not meet the contribution condition or was not responsible for the defect, they will be able to challenge this at the First-tier Tribunal. As with the provision of the qualifying lease certificate by the leaseholder under paragraph 13, knowingly providing false or misleading information is a criminal offence.