I am a developer of a new build scheme involving flats and commercial units. The buyer of a commercial unit is not agreeing to a restriction at HM Land Registry preventing a sale of the unit without the Managing Agent issuing a compliance certificate. What kind of risk is he to me?


A restriction requiring a compliance certificate is critical. Its purpose is to ensure that arrears (and any other non-compliance/breach) are made known to a buyer before they take registration of the property. Effectively, the buyer cannot become the registered proprietor of the property until a compliance certificate is issued. And, you don issue a compliance certificate if there is a breach you want remedied. Doing away with this clause will (a) damage the reversionary interest of the property (b) render it harder to manage, and (c) arguably expose the freeholder to make up any shortfall........... not good news The only other way around this could be to agree to remove the restriction/compliance certificate clause but instead suggest a clause to require them to obtain a licence to assign signed by the Freeholder and the Management company. A licence to sign being a process whereby the lessee applies to the Freeholder/Management Company for permission to sell. The person granting such permission would refuse if (a) there was any breach of lease or arrears to be remedied, or (b) if they did not like the credentials of the proposed incoming purchaser. In reality the process to obtain a Certificates of Compliance costs less than 100 + Vat. The process to obtain a Licence to Assign can cost 750 +. I know which I'd prefer!

C Tomson, MK1