It seems that the answer is no. A manager of flats appointed by the First Tier Tribunal (FTT) pursuant to Part 2 of the Landlord and Tenant Act 1987 (LTA) cannot be an accountable person (AP) for the purposes of the Building Safety Act 2022 (BSA).
This comes from a recent decision of the Upper Tribunal, Solomon Unsdorfer v Octagon Overseas Limited & Others [2024] UKUT 79 (LC), in reviewing a decision of the FTT and will be of note to all appointed managers and indeed to landlords whose building is managed by an appointed manager.
The core duties of an AP is to assess and manage the building safety risks in Higher-Risk Buildings (HRBs) and put measures in place to prevent incidents and reduce the severity if one occurs.
Under Part 4 of the BSA, which deals with HRBs, section 72 sets out the two limbs under which one might be an AP:
- If they hold a “legal estate in possession” (but not including receipt of rents or profits, or the right to receive the same) in part of the common parts; or
- If they do not hold a legal estate in any part of the building but are under a relevant repairing obligation in relation to any part of the common parts.
The Upper Tribunal held that clearly the appointed building manager did not hold a “legal estate in possession” and thus only the second limb was of relevance in this case.
The Upper Tribunal considered whether the building manager appointed by the FTT had a relevant repairing obligation under the BSA. Section 72(6) defines a relevant repairing obligation as an obligation “under a lease or by virtue of an enactment, to repair or maintain that thing”. The Upper Tribunal agreed with the FTT that the manager had no obligations “under a lease” as their powers and duties were derived from the FTT’s management order. The Upper Tribunal explained that that the manager was not just effectively inserted into the lease by virtue of the management order – that is not how Orders made under the LTA are intended to operate.
Similarly, the Upper Tribunal agreed with the FTT that any repairing obligation on the manager was clearly not made by virtue of an enactment. It considered that those words were apt to refer to statutory repairing obligations and were not intended to refer to obligations imposed by an order of the FTT exercising its power under statute.
The Upper Tribunal therefore agreed with the FTT that the appointed manager was not an AP for any of the buildings in the wider development. Instead, it agreed with the FTT’s determination that there was more than one AP for each building in the development and that, depending on the building, that included a combination of either the freeholder, the long leaseholders, and the sub-lessees (all either having relevant repairing obligations under lease or holding a legal estate in possession).
The Upper Tribunal determined that the manager was not an accountable person for the purpose of Part 4 BSA and that this conclusion reflects the clear intention of parliament and the proper construction of section 72.
In expressing an early view on discussions regarding APs, the Upper Tribunal stated that the statutory objective of the BSA was to ensure that each higher-risk building has a clearly identified duty holder in relation to building safety matters and the principle against doubtful penalisation would justify a narrower rather than a wider interpretation of “accountable person”.
This case has highlighted that it is crucial for managers, freeholders and other interested parties to understand their obligations under the BSA. No doubt there will be further commentary on this area of the BSA as applications are made to the FTT to determine who is the accountable person where building safety issues arise.