Can managing agents be Accountable Persons under the Building Safety Act 2022?
Despite the deadline for registering occupied Higher-Risk Buildings under the Building Safety Act 2022 (BSA) having passed on 1 October 2023, some building owners are continuing to grapple with the often complex question of who exactly the Accountable Persons are for their assets, and specifically whether managing agents could fulfil this role.
The short answer to the second question is "no". Managing agents who are simply appointed under a contract will not be the Accountable Person. But the reasoning behind this is somewhat complicated and has led to some confusion.
Generally, in order to be an Accountable Person for a Higher-Risk Building, one of the following criteria must be met. The Accountable Person must either:
- own the freehold or a leasehold interest in any part of the common parts of the building; or
- be under an obligation to repair and maintain any part of the common parts by virtue of being a party to a lease or where such an obligation is imposed by statute.
That being the case, managing agents who have merely been appointed under a contract to repair and maintain the building will not be an Accountable Person – even though on a day-to-day basis, they will in fact be managing, maintaining and repairing the building and have been appointed precisely for that purpose.
This can be especially confusing because building owners and managing agents alike will already be familiar with fire safety legislation which has been in place since 2005. The Regulatory Reform (Fire Safety) Order provides that the "Responsible Person" (i.e. the person responsible for discharging certain fire safety duties under that legislation) is "the person who has control of the premises (as occupier or otherwise) in connection with the carrying on by him of a trade, business or other undertaking (for profit or not)". This can often be a managing agent who has been contracted to manage a building's common parts and has control over them.
However, one big difference between the role of a Responsible Person under the fire safety legislation and an Accountable Person under the BSA, is that a Responsible Person is identified on the basis of who is in control of premises (whether as an employer, an owner or a party contracted to manage etc.) so the responsibility can be delegated from one person to another, depending on circumstances and who has the requisite control. In contrast, Accountable Persons cannot offload their liabilities (so the buck will always stop with them).
This means that an Accountable Person will be subject to penalties for non-compliance even if it was the managing agent's underperformance which in reality caused the breach of the BSA duties. Such penalties could amount to significant fines or even a prison sentence.
While an Accountable Person will always retain this liability, they can still appoint a managing agent to help them to carry out the Accountable Person duties on their behalf. Indeed, Accountable Persons which are shell companies or special purpose vehicles and which do not have any employees will inevitably need to do so, since they are not themselves capable of complying with their duties.
However, it should be noted that any managing agent appointed to carry out these duties must have the "relevant competence". Here, competence (in the context of a corporate entity) is defined as a person who has "the organisational capability to ensure that the functions for which it is responsible are performed in a satisfactory manner."
It is therefore the Accountable Person's responsibility to ensure that any managing agent they appoint to carry out their duties under the BSA satisfies this competency requirement (which, in any case, is also in their own interests given that any non-compliance by their managing agent could result in penalties being levied against the Accountable Person).
As such, while a contractually appointed managing agent may in practice be carrying out all of the duties of an Accountable Person under the BSA, they are not and cannot be the Accountable Person themselves. This may be a relief to many managing agents (and a source of concern for the building owners appointing them) but certainty around this point is key to ensuring that all parties are aware of who is ultimately responsible for keeping buildings safe.