Para 4, Schedule 8, Building Safety Act 2022 No service charge payable where lease below certain value

(1) No service charge is payable under a qualifying lease in respect of a relevant measure relating to any relevant defect if the value of the qualifying lease at the qualifying time was less than—

(a) £325,000, if the premises demised by the qualifying lease are in Greater London;

(b) £175,000, in any other case.

(2) For the purposes of this paragraph the value of a qualifying lease at the qualifying time is its value determined in accordance with paragraph 6 and regulations made under it.

Comes into force on 28 June 2022.

Applies to England and Wales.

The more time I spend with the Building Safety Act 2022, the more I move towards the conclusion that it is a series of nested definitions connected by a complicated, limiting test.

So it is here.

In order to establish whether a leaseholder is freed from the obligation to pay a service charge for works, we must establish that we are dealing with all of the following:

• A lease that is a qualifying lease at the qualifying time;
• A relevant measure relating to a relevant defect;
• Liability to pay for that relevant measure through the service charge.

If the answer is “yes” to all of the above, we must then value the lease.

At this stage the location of the property is important.

Greater London

Nothing is payable by way of service charge in connection with the relevant measure(s) if:

• all of the above conditions are satisfied;
• the property subject to the lease is located in Greater London, and
• is worth less than £325,000.

According to Britannica.com, Greater London comprises 33 boroughs.

Outside Greater London

Nothing is payable by way of service charge in connection with the relevant measure(s) if

• all of the above conditions are satisfied;
• the property subject to the lease is located outside Greater London, and
• is worth less than £175,000.

Paragraph 4 gives us no indication whatsoever as to how to value a lease. That task is assigned to paragraph 6 and “regulations made under it”.

The Building Safety (Leaseholder Protections) (England) Regulations 2022, No.711 are those regulations. 

Regulation 9 contains the formula by which leases are to be valued.