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Certificate of Compliance

01/07/2021
(Last Updated: 01/07/2021)
2,750
4 min read
A Certificate of Compliance in conveyancing terms is sometimes - but not always - one of the items you have to pay for when you buy a leasehold flat.

You'll know if you're looking at buying a flat or have bought one before that there are various additional costs involved that you don't encounter if you're buying a freehold house: this is one of these which might feature.

This article looks at Certificates of Compliance and considers:



Buying a leasehold flat?

It can be a daunting process, particularly if you're a first time buyer and you will most likely find that there are unexpected costs.

Our experienced leasehold conveyancing solicitors can ensure that you're properly briefed about all aspects of the flat that you're looking to buy, financial and legal and that the process is conducted as efficiently as possible.

* Fixed Fee – No Sale No Fee – On all Mortgage Lender Panels



    1

    What is a Certificate of Compliance?

Sometimes a freeholder places a restriction on the official copy of the register of title of a leasehold property they own held at the Land Registry and it is this restriction which a Certificate of Compliance is concerned with.

The restriction, which in theory can be wide in scope, normally needs to be 'unlocked' by the would-be buyer entering into a Deed of Covenant, which must be signed and witnessed, and which states various restrictions and conditions which the new buyer must comply with which were in the original lease.

In short, the Deed of Covenant is a signed, witnessed statement from the buyer that they will comply with the aforesaid restrictions and conditions that the previous leaseholder had agreed to having been bound by.

The Certificate itself, however, is actually issued by the landlord/management company, once they are satisfied that you and your solicitor have done all you can to abide by any conditions or restrictions or have carried out any necessary actions.

The landlord/management company issue the Certificate of Compliance to the Land Registry; this removes the restriction and the new leaseholder can then move to completion.


    2

    How do you know if you'll have to get a Certificate of Compliance?

Certificates of Compliance, as stated, aren't always required. You will only find out if there is one involved in your leasehold purchase once your solicitor has received this information from the freeholder once the former has sent over the Leasehold Property Enquiries (LPE1) form via the otherside solicitor and received the management company's leasehold information pack .


    3

    How much does a Certificate of Compliance cost?

You as the buyer have to pay the freeholder's solicitor to draft the Certificate of Compliance, with costs ranging currently from about £50 to £350 or more.


    4

    What do you have to do to get your Certificate of Compliance?

The most disagreeable part of all this if you're a prospective new leaseholder is that you won't have known about costs like this coming up at the beginning.

Having already possibly had to pay out for things like a Notice of Transfer Fee and/or a Notice of Charge Fee, you'll have to 'put to bed' the Certificate of Compliance matter by agreeing to and signing a Deed of Covenant.

Essentially this Deed of Covenant is simply a confirmation that you will accept and abide by the covenants (in simple terms restrictions on the use of the property such as a ban on the keeping of pets) contained within the lease.

These should be outlined to you by your solicitor and a copy of the lease provided for you to review. You will be asked to sign the deed in the presence of an independent witness and return this to your solicitor. The landlord/management company will charge a fee for either preparing this deed, accepting the deed or both.


Buying a leasehold flat?

It can be a daunting process, particularly if you're a first time buyer and you will most likely find that there are unexpected costs.

Our experienced leasehold conveyancing solicitors can ensure that you're properly briefed about all aspects of the property that you're looking to buy, financial and legal and that the process is conducted as efficiently as possible.

* Fixed Fee – No Sale No Fee – On all Mortgage Lender Panels



 
Andrew Boast of Sam Conveyancing
Written by:
Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.
Caragh Bailey, Digital Marketing Manager
Reviewed by:

Caragh is an excellent writer in her own right as well as an accomplished copy editor for both fiction and non-fiction books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey and mortgage related articles.

 
 
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