Resident Led Organisations: Rights, Roles & Responsibilities

Author: Katie Orr, Trainee Solicitor

As readers will no doubt be aware, there has been considerable focus in recent months on the rights, responsibilities and liabilities for landlords, managing agents and leaseholders under then new building safety regime. But what are the implications for resident led organisations? Katie Orr, Trainee Solicitor at specialist property solicitors JB Leith provides an overview…

Part 4 of the Building Safety Act identifies new dutyholders – who will be known as ‘accountable persons’ (APs) – for residential high-rise buildings (HRBs). This will be the organisation or person who owns or has responsibility for the building. It may also be an organisation or person who is responsible for maintaining the common parts of a building. Specifically, Section 72 of the Building Safety Act 2022 provides that the accountable person for a higher-risk building (a building which is at least 18 metres in height or has at least 7 storeys) is the person with repairing obligations in respect of its common parts under a lease or by virtue of an enactment.

The ‘principal accountable person’ (PAP) for a HRB is either the AP or, where there is more than one AP, the person who holds a legal estate in possession of the structure and exterior of the building or the person that has the relevent repairing obligation in respect of the structure and exterior of the building.

It is important to note that this includes resident-led organisations such as resident management companies (RMCs) and right to manage companies (RTM companies).

Further, 72(2) of the Building Safety Act 2022 provides that a person, such as a landlord, who holds a “legal estate in possession” of the common parts of a HRB or any part of them is not an AP if all repairing obligations relating to the common parts are functions of an RTM Company.

• They will assume the statutory duties under Part 4 of the Building Safety Act 2022 including criminal liability in circumstances of non-compliance.

• The AP will have a duty to take all reasonable steps to prevent a building safety risk happening, with building safety risk defined as ‘spread of fire and/or structural failure’ and reduce the seriousness of an incident if one happens. This is similar to the existing role of “Responsible Person” under the Fire Safety Order 2005 and Fire Safety Act 2021.

• The PAP will have to register existing buildings with the Building Safety Regulator (BSR), they can do this between April 2023 and October 2023. It is an offence if a building is occupied but not registered after this date.
• The PAP must register all new buildings before occupation and compile the mandatory safety case reports based upon maintaining and managing the golden thread of information pertaining to a building’s history and level of ongoing safety compliance.
• Section 112 (30E) of the Building Safety Act 2022 amends the Landlord & Tenant Act 1985 by implying terms in leases so that the costs of the appointment of a building safety director can be recoverable as a service charge under the lease. This enables RMCs and RTM companies to recover monies to cover the cost of the appointment of a director appointed for a building safety purpose whatever the terms of the lease.

The government has recently finished consulting on the role of Building Safety Directors, to mitigate the potentially limited competence of some resident directors in charge of RTMs/RMCs in effectively managing and discharging their building safety duties. The consultation proposes that regulations will amend articles of association for an RMC by setting out the eligibility of a building safety director to be appointed for a building safety purpose. For RTMs, there are proposals to amend the model articles to also include provisions which will align with eligibility criteria for RMCs, namely by:

a. ensuring that the proposed building safety director to be appointed by an RTM company has declared all conflicts of interest; and

b. placing an obligation on RTM companies to also consider any conflicts as set out above for RMCs as a minimum.

• Section 161(4) of the Building Safety Act 2022 – provides that where an RMC or RTM company appoints a paid building safety director, all unpaid officers of the company will be relieved of their personal criminal liability for any offences committed under Part 4.

Although this may provide some assurance to resident management companies, there are many issues to be clarified around how remuneration will be determined not to mention the pool of available and suitably qualified resource and how an organisation’s Articles of Association will need to be altered and approved to allow appointment as well as eventual de-selection. No further clarification on the specific implications is yet available, although these issues present an immediate practical consideration.

We will continue to monitor and report and should you wish to discuss any of the subjects above further, please contact us: [email protected]

About the Author:

Katie’s role also includes advising Landlord and Management Company clients in regard to recoverability of service charges and breach of lease.

Katie also frequently provides commentary through articles and blog posts which deliver practical advice on a range of property matters to clients and the wider public, visit our news section here.