Certificate of Compliance - Management Company question

Hanzkbar

We have recently purchased a property in a Gated community containing 4 Free hold properties. In order to maintain the communal areas and Entrance Gate. One of the property owners have set up a limited company. Each property owner is a director of the company and chips in £31 per month to the company. The money is used for general maintenance and bills for say electricity of lights in general areas and Gate etc. since purchase of the property; I have been made director of the company. 

The solicitor I hired to process the purchase is now asking the Management Company (limited company as described above) for a Certificate of Compliance. The person who is managing the Limited company (one of the property owners) says that this is just a limited company made between owners to formalise the maintenance and is not a formal property management company. In short they don’t have a certificate of compliance and never needed it for anyone else. 

The solicitor says that he needs it for transferring the title in land registry. 

During the course of purchase; this solicitor got quite a few things wrong. Hence enquiring here whether in this scenario does the solicitor really needs it? And/or with person who manages the limited company saying they don’t have it; what are my options..?

any help will be greatly appreciated 

eddddy

I'm no expert on this, but my understanding is that a "Certificate of Compliance" is essentially a letter/document from the Management Company (or Limited Company) essentially saying something like:

"We confirm that Hankzbar and/or their solicitor has done everything we require them to do in connection with buying the property and agreeing to pay management fees, etc."

i.e. You've signed any/all docs the company want you to sign, and there's nothing else that they want you to do.



Maybe you could ask your solicitor to draft a simple "Certificate of Compliance" letter or document for the director of the limited company to sign.

But possible considerations might include:

• Your solicitor might ask you to pay an extra fee for drafting the wording of the "Certificate of Compliance"

• The company director might be happy to sign it - or they might look at it and think "I'm not signing that without taking advice from a solicitor". That might cause further delays, and they might expect you (or the seller) to pay their solicitor's fee.

Edit to add...

I think Land Registry only require a "Certificate of Compliance" if there's a relevant restriction on the title. 

Maybe there is no restriction on the title in your case - so as you suggest, it isn't actually required by Land Registry. So I guess you could ask your solicitor to point you towards the specific restriction wording on your title.

Or it might be simpler just to provide a certificate for your solicitor, rather than having a drawn out argument about whether it's required.

ciderboy2009

OP - The question you should ask yourself is do you prefer the opinion of somebody you are paying a lot of money to to get things right (and who you can potentially sue if they get it wrong) or the advice of somebody who is doing a part time job that they're not getting paid for (you could still possibly sue them if they get it wrong but you would end up having to pay yourself 25% of anything you're awarded)?

Hanzkbar

ciderboy2009 said:

OP - The question you should ask yourself is do you prefer the opinion of somebody you are paying a lot of money to to get things right (and who you can potentially sue if they get it wrong) or the advice of somebody who is doing a part time job that they're not getting paid for (you could still possibly sue them if they get it wrong but you would end up having to pay yourself 25% of anything you're awarded)?

Response is aligned is what my solicitor that I am paying is saying to me..