Effects of new building laws on UK investors
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Effects of new building laws on UK investors
RAYMOND HAYES Barton ’ s Solicitors
So , I understand there are new building safety laws in England but how does it affect me as a residential buy to let investor ?
TThere are effectively two regimes which run alongside each other and one relates to cladding following the Grenfell disaster where the building is caught by the regulations ( i . e . five or more storeys or 11m and above whichever comes first ). It is necessary to find out if there is cladding and if so whether there is an EWS1 certificate .
If the building requires remediation it is the responsibility of the original developer / freeholder but there is government funding available so it is essential to ascertain the status - there may be opportunities for cash buyers to acquire discounted flats where the building requires remediation but hasn ' t yet happened provided the investor ensures costs are covered .
The second regime relates to other defects and protects leaseholders against the amount they have to contribute to the cost of fixing noncladding defects although no one will ever be required to pay more than the service charge contribution set out in their lease - bizarrely , whether the protection is available or not depends on the status of the owner on 14 February 2022 so that identical side-by-side flats could have different levels of protection .
If an owner owns more than three properties in the UK as at 14 February 2022 the owner has to declare on the “ leaseholder deed of certificate ” and will not get protection but a buy to let investor with a large portfolio can buy from an owner who qualified for protection on that date .
11 JUNE / JULY 2023 SA Real Estate Investor Magazine