Certificate of Compliance
Buying a leasehold flat can come with costs and legal steps you might not expect. A Certificate of Compliance is one of these, and it often catches first-time buyers by surprise.
In short, a cert of compliance is a document issued by the freeholder or their managing agent. It confirms you have met a specific condition on the property's title, such as entering into a Deed of Covenant.
You will need one if there is a restriction on the Land Registry title that requires it for the sale to complete.
What is a Certificate of Compliance?
When you buy a leasehold property, the freeholder may place a restriction on the title at HM Land Registry. This restriction acts as a barrier, preventing the sale from being completed until a specific condition is met.
This condition is often a requirement for the new buyer to enter into a direct legal agreement with the freeholder. This agreement is called a Deed of Covenant.
The Certificate of Compliance is the document issued by the freeholder or management company once they are satisfied that you and your solicitor have completed everything required, including signing and returning the Deed of Covenant.
Your solicitor then submits this certificate to the Land Registry to lift the restriction, allowing the purchase to complete and your name to be registered on the title.
The Deed of Covenant is the promise you make, and the Certificate of Compliance is the proof that you have made it.
- RICS-accredited surveyors for the lease premium.
- Fixed, competitive fees.
- Solicitors to serve the Section 42 Notice.
- Expert negotiations with your Freeholder
- Full management of the entire lease extension process.
- First-tier Tribunal representation (if required).
- Combined surveyor and solicitor leasehold services.
What are property covenants, and why are they important?
When you buy a leasehold property, you are agreeing to a set of rules and promises known as covenants. These are legally binding obligations on how you can use the property and are a key part of the lease agreement.
While a Deed of Covenant and the resulting Certificate of Compliance focus on ensuring you agree to the existing rules, it's important to understand the rules themselves.
Covenants can be either positive, requiring you to do something (like pay a service charge), or negative, restricting you from doing something (like banning pets).
The process of getting a Certificate of Compliance
The need for a Certificate of Compliance is not always a given. You will only find out if one is required when your solicitor receives the Leasehold Information Pack from the seller's solicitor.
At this point, your solicitor will also raise legal enquiries with the seller’s solicitor to find out more about the property and its legal title.
This pack will include a copy of the official title register. If it contains a Land Registry restriction, your solicitor will then proceed to manage the process of getting the certificate for you.
- 1
Agree to the Deed of Covenant and pay the fee
Your solicitor will provide you with the Deed of Covenant. This document outlines the rules and conditions you must agree to follow as the new leaseholder.
Once you have reviewed and understood them, you will need to sign the deed in the presence of an independent witness.
The freeholder will charge a fee for preparing, accepting, and processing this deed and for issuing the Certificate of Compliance. These fees can range from about £50 to over £350.
- 2
Your solicitor completes the process
Once you have signed the deed and paid the fee, your solicitor will send the Deed of Covenant to the freeholder.
The freeholder or management company will then issue the Certificate of Compliance and submit it to the Land Registry. This lifts the restriction on the title and allows your purchase to be officially registered.
The Leasehold and Freehold Reform Act
While a Certificate of Compliance is a standard part of the current conveyancing process, it is important to understand the broader legal changes affecting leasehold properties in England & Wales.
The Leasehold and Freehold Reform Act has introduced significant changes, even if many of them are not yet in force.
The Act aims to make owning a leasehold property cheaper and easier by making it simpler to extend your lease, buy your freehold, or take over the management of your building.
For example, it is now easier for you to apply for a Right to Manage claim. The Act also bans the sale of new leasehold houses, which means most new houses will now be sold as freehold.
It is also worth knowing about how freehold properties can be split to create new leasehold titles, especially if you are interested in creating a new leasehold title yourself.
- Fixed, competitive legal fees with no hidden costs.
- Expert conveyancing solicitors with proven local knowledge.
- No Sale, No Fee protection for your transaction. Terms apply.
- On 99% of mortgage lender panels.
- Fast completions.
- We can solve any property challenge.
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 is an excellent writer and copy editor of books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey, property law and mortgage-related articles.
