The Section 119 Qualifying Leaseholder Test Explained
Part 5 of the Building Safety Act 2022 (c. 30) introduced unprecedented statutory protections shielding residential leaseholders in England from historical building safety remediation bills. To qualify, a lease must satisfy four cumulative statutory tests set out in Section 119.
First, the lease must be a long lease granted for a term exceeding 21 years of a single dwelling in a 'relevant building' (defined under Section 117 as at least 11 metres in height or at least 5 storeys containing at least 2 dwellings). Second, the lease must have been granted before 14 February 2022. Third, it must be subject to a service charge. Fourth, as of 14 February 2022, the dwelling must have been the leaseholder's only or principal home, OR the leaseholder owned no more than 3 UK residential dwellings in total.
Schedule 8 Cladding vs Non-Cladding Remediation Cost Caps
Schedule 8 of the Act creates two distinct tiers of statutory protection. For unsafe external wall cladding systems (such as ACM, HPL, or combustible insulation), paragraph 8 imposes a complete, absolute statutory ban: no costs whatsoever may be passed on to qualifying leaseholders. The legal liability is strictly £0.00.
For non-cladding historical fire safety defects (such as inadequate internal compartmentation, missing cavity barriers, or defective fire doors), paragraphs 4 to 6 establish fixed 10-year caps: £0 for properties valued below £125,000 outside London (£175,000 in London); £10,000 for properties valued up to £1,000,000 outside London; £15,000 in Greater London; £50,000 for properties between £1m and £2m; and £100,000 for properties over £2m. Furthermore, managing agents cannot demand more than 1/10th of the cap in any single annual service charge period.
Conveyancing Requirements: Deed of Certificate & Landlord Default
In conveyancing transactions, high-street mortgage lenders operating under the UK Finance Lenders' Handbook require clear evidence of qualifying leaseholder status before releasing mortgage funds. The seller must execute a statutory Leaseholder Deed of Certificate under Schedule 1 of SI 2022/859.
Simultaneously, the freeholder must serve a compliant Landlord's Certificate under Schedule 2 within 4 weeks of request. Under Regulation 6, if the landlord fails to provide the certificate within 4 weeks, they are legally deemed to meet the developer test and net worth test, legally discharging all leaseholders from contributing towards historical defects.