'Certificate of Compliance' question
Discussion
I live in a block of 4 flats. Leasehold, self managed by the 4 flats by a management company of which I was roped in to being the director, to which we all pay a monthly service charge.
Recently one of the flats has been sold by the landlord of one of the four flats, (who rents it out and doesn't live there, in fact I've never seen or met him). I've received a letter this week from his solicitor asking for a 'certificate of compliance' because in the deeds of the flats their is a covenant saying a certificate is needed before any sale can go through.
Here's my question:
None of the other 3 owners of the flats, including me have ever had or needed a certificate when we bought our flats, so why has this come up now?
And whose responsibility is it to pay for the certificate?
Thanks
Recently one of the flats has been sold by the landlord of one of the four flats, (who rents it out and doesn't live there, in fact I've never seen or met him). I've received a letter this week from his solicitor asking for a 'certificate of compliance' because in the deeds of the flats their is a covenant saying a certificate is needed before any sale can go through.
Here's my question:
None of the other 3 owners of the flats, including me have ever had or needed a certificate when we bought our flats, so why has this come up now?
And whose responsibility is it to pay for the certificate?
Thanks
Just spoke to my wife who works in property law, she says :-
“The certificate is needed because there will be a restrictive covenant on the title which means land registry can’t register it without this certificate. She can’t understand though if that covenant is in place, why it hasn’t been raised before with previous buyers.
The buyer is responsible for paying for the certificate as they will benefit from it.
Two options are - You as director of the freehold can provide that certificate and charge an admin fee
Or you can ask a solicitor to do this which will obviously charge a fee but that would be paid for by the buyer”
“The certificate is needed because there will be a restrictive covenant on the title which means land registry can’t register it without this certificate. She can’t understand though if that covenant is in place, why it hasn’t been raised before with previous buyers.
The buyer is responsible for paying for the certificate as they will benefit from it.
Two options are - You as director of the freehold can provide that certificate and charge an admin fee
Or you can ask a solicitor to do this which will obviously charge a fee but that would be paid for by the buyer”
That's great, thanks. And confirms what I thought re: the cost.
As for why it's never been brought up before, that's the million dollar question. I'm in touch with the previous director and he said he's never been asked for one. And one of the flats opposite was sold 2 years ago when I was the director and it never came up. Very strange.
As for why it's never been brought up before, that's the million dollar question. I'm in touch with the previous director and he said he's never been asked for one. And one of the flats opposite was sold 2 years ago when I was the director and it never came up. Very strange.
A Certificate of Compliance is a very grand term for a letter from the freeholder or management company consenting to the sale of the property. If the owner is up date with their service charge there is no reason not to issue it, unless there is anything unusual going on with the building like major works etc.
There will more than likely be another requirement on the buyer to enter into an agreement to pay their service charges and comply with the terms of the lease before the transfer can be processed by the Land Registry. This is often call a Deed of Covenant and there might be a model example in the lease or TR1, but it's a very straightforward one page document that will probably need to be witnessed. My solicitor and manco were useless on this last time I moved and I just drafted my own.
There will more than likely be another requirement on the buyer to enter into an agreement to pay their service charges and comply with the terms of the lease before the transfer can be processed by the Land Registry. This is often call a Deed of Covenant and there might be a model example in the lease or TR1, but it's a very straightforward one page document that will probably need to be witnessed. My solicitor and manco were useless on this last time I moved and I just drafted my own.
CarlosSainz100 said:
As for why it's never been brought up before, that's the million dollar question. I'm in touch with the previous director and he said he's never been asked for one. And one of the flats opposite was sold 2 years ago when I was the director and it never came up. Very strange.
Mostly depends on the solicitor. Ours is very good and tends to take a view on things that won't be a problem. We bought a place with a small shed in the garden. There was a restrictive covenant that said the original builder's permission was needed, but given they were long gone she wasn't worries. When we sold the purchaser's solicitor wanted indemnity insurance. Would never be an issue but they were ticking all the boxes rather than a common sense approach.I've done a bit more digging and there is indeed a covenant. All it says is the management company have to give permission for someone to sell their flat (or words to that effect). When I bought my flat in 2018 it didn't come up but my property is registered fine with the land registry.
Does anyone know if their is a form of words or a template I can use for this 'certificate' and get it witnessed by a solicitor? As long as they pay their service charge I don't care who buys it!
Thanks for your help
Does anyone know if their is a form of words or a template I can use for this 'certificate' and get it witnessed by a solicitor? As long as they pay their service charge I don't care who buys it!
Thanks for your help
Not sure it's the same thing but when I owned the freehold of a building containing 6 flats, all responses to queries for potential leasehold sales were chargeable (at reasonable rates of course) whether by yourself of a solicitor so why not just engage a solicitor to do the work.
Edited by LimmerickLad on Wednesday 17th January 14:40
The thought did occur to me. Unfortunately the other 2 flat owners are octogenarians and can barely turn on a computer let alone search online so it's muggins here that has been roped in to be the director and point of contact. I always thought being a director of a company would come with a nice car and busty secretary, no such luck...
LimmerickLad said:
Not sure it's the same thing but when I owned the freehold of a building containing 6 flats, all responses to queries for potential leasehold sales were chargeable (at reasonable rates of course) whether by yourself of a solicitor so why not just engage a solicitor to do the work.
The solicitors that I've contacted either didn't want to know as soon as I mentioned anything to do with a certificate of compliance or wanted to charge a grand to remove the covenant entirely, something which the management company is not in a position to pay. Edited by LimmerickLad on Wednesday 17th January 14:40
CarlosSainz100 said:
LimmerickLad said:
Not sure it's the same thing but when I owned the freehold of a building containing 6 flats, all responses to queries for potential leasehold sales were chargeable (at reasonable rates of course) whether by yourself of a solicitor so why not just engage a solicitor to do the work.
The solicitors that I've contacted either didn't want to know as soon as I mentioned anything to do with a certificate of compliance or wanted to charge a grand to remove the covenant entirely, something which the management company is not in a position to pay. Edited by LimmerickLad on Wednesday 17th January 14:40
CarlosSainz100 said:
I've done a bit more digging and there is indeed a covenant. All it says is the management company have to give permission for someone to sell their flat (or words to that effect). When I bought my flat in 2018 it didn't come up but my property is registered fine with the land registry.
Does anyone know if their is a form of words or a template I can use for this 'certificate' and get it witnessed by a solicitor? As long as they pay their service charge I don't care who buys it!
Thanks for your help
I’m amazed you own the flat and this is news to you. Different solicitor next time? Are you the only owner who didn’t know about the covenant or are the other residents oblivious too?Does anyone know if their is a form of words or a template I can use for this 'certificate' and get it witnessed by a solicitor? As long as they pay their service charge I don't care who buys it!
Thanks for your help
No-one knows about it because it's never come up before. Maybe my solicitor did it and didn't tell me? I have no idea.
The previous director of the management company has told me he's never had to supply any certificates and that would appear to be born out because there's nothing in the paperwork to show this.
The previous director of the management company has told me he's never had to supply any certificates and that would appear to be born out because there's nothing in the paperwork to show this.
CarlosSainz100 said:
No-one knows about it because it's never come up before. Maybe my solicitor did it and didn't tell me? I have no idea.
The previous director of the management company has told me he's never had to supply any certificates and that would appear to be born out because there's nothing in the paperwork to show this.
Apologies, I was referring to the fact there was a covenant that was overlooked when you bought the property. It’s a fundamental oversight by the ‘professionals’ to say the least.The previous director of the management company has told me he's never had to supply any certificates and that would appear to be born out because there's nothing in the paperwork to show this.
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