The Leasehold Sale and the Cladding Certificate
You act for Nadia, selling a fifth-floor flat in a 2008-built block for £295,000. The buyer's lender has asked for an EWS1 form. The managing agent says the block has ACM cladding on the upper floors and that an EWS1 was commissioned but is not yet issued. The buyer's solicitor has threatened to withdraw unless the form is provided within 14 days. Nadia has already exchanged on her onward purchase, with completion in 30 days, and faces a bridging loan at 8% if the sale falls through. The service charge account is £3,200 in arrears, which Nadia disputes. The lease requires the landlord's consent to assignment, which is 'not to be unreasonably withheld'.
1. What are Nadia's options and how should you advise her on the EWS1 issue?
Read the worked answer
The EWS1 is a lender requirement, not a legal requirement of the sale, but the buyer's lender will not lend without it. Nadia's options are: (a) press the managing agent for a firm issue date and evidence of the assessment; (b) offer the buyer a price reduction or indemnity to reflect the uncertainty; (c) agree an extended completion date to allow the form to issue; or (d) accept that the sale may fall through and plan for bridging finance. Advise Nadia that she cannot compel the buyer to proceed without the form if the lender refuses, and that withholding the information would risk a misrepresentation claim. The 14-day deadline is tight; obtain written confirmation from the agent and keep the buyer informed. If the form is delayed, propose a completion date after issue rather than lose the sale.
2. How should the disputed service charge arrears be handled before completion?
Read the worked answer
The arrears of £3,200 are a charge on the flat and must be addressed before completion. Nadia disputes them, so obtain a breakdown and challenge any incorrect items in writing. The buyer's solicitor will require either payment or an undertaking to pay from the sale proceeds. The safest route is to agree a retention from the completion monies to cover the disputed sum, with a mechanism for refund if the dispute is resolved in Nadia's favour. Do not simply ignore the arrears: the landlord could register a charge or withhold consent to assignment. Advise Nadia that a dispute does not remove the liability, and that the buyer will expect clear evidence of the position.
3. The landlord has not responded to the consent request. What can Nadia do?
Read the worked answer
The lease requires consent 'not to be unreasonably withheld'. If the landlord fails to respond within a reasonable time, that may amount to unreasonable withholding. Write to the landlord setting a deadline and stating that consent will be treated as given if no response is received. Check the lease for a notice mechanism and any statutory provisions. If consent is still refused, Nadia may apply to court for a declaration that consent is unreasonably withheld, but that is slow and costly. In practice, chase the landlord, provide all requested references and information, and keep the buyer informed. If the sale is at risk, consider a completion date after consent is obtained rather than exchange without it.