Further to our previous article on the Building Safety Act 2022 here highlighting areas of uncertainty and need for further guidance, particularly in relation to the Part 2 requirements of some lenders, namely Barclays and Nationwide, Barclays as of yesterday have updated their Part 2 requirements by making needed additions to the Para 5.14.17b, which reduces the onerous requirements placed on conveyancers. The full updated condition is set out below.
Sub-para (c) adds helpful specific guidance on steps to take to ensure compliance with the Act.
Importantly, it has narrowed the onus from being very open by being required to certify that the Responsible Person/Accountable Person has complied with current legislative requirements and that there are no Fire Safey Issues (something which is arguably impossible for a lawyer who is not qualified in those areas to be able to check the veractiy of any documents or certificates received). Now the requirement lists the checks to make and says “where a check detailed within this section identifies information on paperwork relating to the remediation of a building is incorrect, this must be reported to us prior to completion/submission of the certificate of title.” This makes the requirement more prescriptive and possible to do.
It also requires the conveyancer to (f) ensure that the borrower understands the extent of any financial contribution they will be required to make towards the cost of remediation, the remediation status of the building and the impact of any remediation timescales.
Nationwide are yet to amend their Part 2 requirements.
Conveyancers must be aware of the additional checks that they now need to make, but it is good to see Barclays offering more guidance as to how those checks are to be carried out.
The Updated Part 2 requirement from Barclays
5.14.17bDoes the lender have any specific instructions about building safety?
We have requirements for properties that have external wall systems (often generically termed cladding) that require remediation under the Building Safety Act 2022.
Please note, any blocks of flats/apartments with 5 or more stories could potentially be in scope.
Any blocks of flats/apartments with less than 5 stories do not require any action in relation to the Building Safety Act and this section can be ignored along with any guidance within part 1 relating to leasehold properties.
Properties with external wall systems that require remediation will have an EWS1 rating of A3 or B2. Where a property has one of these ratings there is no requirement for you to report this to us unless any discrepancy is identified from the checks detailed below.
The vendor’s solicitor will provide confirmation and documents where a building is in scope. You do not need to query this, or send documentation to us, unless any issues are identified.
Where the building has or will be remediated under the Building Safety Act 2022:
(a) Where a leaseholder certificate and/or a landlord certificate is provided to evidence remediation, you should check the details are correctly recorded wherever possible. Alternatively, some properties will have a developer letter confirming remediation or a letter from the housing association. These are acceptable in lieu of the certificates.
(b) You must request that the Vendor’s conveyancer or the borrower, (as applicable) provide any Remediation Order or Remediation Contribution Order (if one has been obtained) and supply a copy of the same to the Lender. There is no requirement to report to us where no remediation order/remediation contribution order exists.
(c) You must request a copy of the lease agreement in respect of the leaseholder flat and you must check that:
I. the lease is granted for a term exceeding 21 years (whether it is (or may become) terminable before the end of that term by notice given by or to the tenant or by re-entry, forfeiture or otherwise)
II. the lease was granted before 14 February 2022
III. the information provided in the Leaseholder Deed of Certificate including, the building address, the current leaseholder, and the name of the leaseholder on 14 February 2022 accords with the leasehold register (to the extent this information is detailed therein)
IV. the information provided in any Landlord’s Certificate including the vendor/leaseholder’s name and address (which needs to accord to the leasehold register), the date on which the lease was granted and the name and number of the dwelling to which the lease relates, accords with the lease agreement (to the extent this information is detailed therein)
(d) where the leaseholder has indicated on the Leaseholder Deed of Certificate that the dwelling was sold before 14 February 2022 but the sale price is not known, you must search the UK Land Registry to verify this. Where no value is held at land registry we recognise this check cannot be completed and you do not need to query this with us.
(e) In respect of Section 5.14.17.B (a)-(d) above, where a check detailed within this section identifies information on paperwork relating to the remediation of a building is incorrect, this must be reported to us prior to completion/submission of the certificate of title.
(f) For property purchases only – based on the information collected and validated pursuant to this Section 5.14.17.B, you must ensure that the borrower understands the extent of any financial contribution they will be required to make towards the cost of remediation, the remediation status of the building and the impact of any remediation timescales.
Last updated: 30/03/2023
The previous Part 2 Requirement
5.14.17b Does the lender have any specific instructions about building safety?
Where we have identified a relevant security, we will provide to you, along with the Offer, all the documentation that we have collected through the application process which may include the following;
• An Executed Leaseholder Deed of Certificate and Landlord Certificate*
• Confirmation of any costs and amounts not covered by the Building Safety Fund or other Scheme (i.e. capped/non-capped charges)
• Confirmation that interim fire safety measures are satisfactory
• One of the following:
o Confirmation from the ‘scheme provider’ that the building will be remediated under a Developer/Government/Freeholder Scheme, or
o A Fire Risk Assessment of External Walls report (FRAEW) with executive summary including an indicative rating, or
o An EWS1 form, or
o A letter stating why none of these are available
*(Where a Landlord Certificate can’t be provided, confirmation will be provided that the Responsible/Accountable Person has complied with current legislative requirements and that there are no Fire Safety Issues).