Schedule 8: Remediation costs under qualifying leases Paragraph 13: Presumption: qualifying lease Background
This is a new provision.
	Section 119 defines a qualifying lease for the purpose of the leaseholder protections. Whether a lease is qualifying is determined according to its ownership at the qualifying time, which is the start of 14 February 2022. As set out in the explanatory note to section 119, the qualifying lease status is automatically transferred to future buyers of the property.
	Whether a lease is qualifying determines whether the lease, and therefore the tenant under the lease (the leaseholder), qualifies for the leaseholder protections set out in Schedule 8. Not all leases will be qualifying. It is important that leaseholders and landlords have clarity on the position. 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 costs on to leaseholders through the service charge. Leaseholders will need to know whether they are the owner of a qualifying or non-qualifying lease as this will determine what they can be charged by their landlords; potential purchasers of leases will also need to understand whether the lease they may wish to purchase is qualifying.
	The qualifying lease certificate is the formal means by which qualifying lease status is demonstrated and recorded; to this end appropriate evidence will need to be provided by the leaseholder to the landlord when the certificate is executed; this will ensure that the landlord has confidence that the information provided in the certificate is accurate. The landlord will need to accept the certificate, once executed, at face value. However, it will be made clear to leaseholders that they must provide information that to the best of their knowledge is true, and that knowingly failing to do so is a criminal offence. No express provisions are made in relation to such conduct; there is no need to make express provision as criminal behaviour can be addressed in the usual way.
	Whether a lease is qualifying depends on the ownership of the lease at the qualifying time, not on the date on which the certificate is executed. As such, the qualifying lease certificate will be an important legal document that will need to be securely kept and transferred to future owners of the lease on sale.
	The presumption relating to the qualifying lease ensures that landlords take a reasonable approach to recovery of costs relating to historical defects. The presumption means that a landlord may only treat a lease as non-qualifying once they have taken steps to obtain the qualifying lease certificate from the leaseholder. This prevents landlords from continuing to issue bills to leaseholders in the interim while the qualifying lease status is established.
	Where the landlord has exhausted all reasonable steps and complied with all prescribed steps to obtain a qualifying lease certificate and has been unsuccessful, then the landlord may assume the lease is non-qualifying until such a time as a valid qualifying lease certificate is provided.