In giving one of the first decisions on who is an accountable person under the Building Safety Act 2022, the First Tier Tribunal ('FTT') has left a Right to Manage company with sole accountability.
Clarion Housing Group ('Clarion') is the head leaseholder of 27 flats contained within Globe View House, a block in south London which fulfils the criteria for a high-risk building under the BSA. The building is managed by Globe House RTM Company Limited ('the RTM Company'), a company set up by Globe View House residents via the provisions of the Commonhold and Leasehold Reform Act 2002 ('CLARA') to manage the building.
Under the BSA, high-risk buildings are required to have a registered 'accountable person': such a person or entity has extensive obligations (such as risk assessments and resident surveys) with respect to the building which can be onerous. The RTM Company were registered as the principal accountable person for Globe View House, however, Clarion were also registered as an accountable person by the RTM Company. In Clarion Housing Group v Globe View House RTM Company Limited [2025] LON/00BE/BSG/2025/0600, Clarion sought the FTT's authority to remove this registration on the basis they did not fulfil the criteria as set out in section 72 of the BSA, which defines an accountable person as one who holds a legal estate in the common parts of a building, or who has repairing obligations in relation to the common parts of a building.
Curiously, as a preliminary issue, it was found that section 75 of the BSA does not allow a person who is not an accountable person to apply to the FTT for a determination that they are not an accountable person, even if they have been wrongly registered.
The 27 flats in Globe View House owned by Clarion consists of a mix of shared ownership leases and properties subject to assured tenancies; Clarion's position was that the common parts of the building were in the possession and management of the RTM Company. It was accepted by the RTM Company that, due to the provisions of CLARA, it had assumed the repairing obligations with respect to Clarion's shared ownership leasehold properties. However, the RTM Company submitted to the FTT that;
- under the terms of its headlease, Clarion still had a right to repair elements of the common parts of the building, and therefore fulfilled the criteria as set out in section 72 of the BSA for the definition of an accountable person;
- Additionally, Clarion has an obligation under the terms of its headlease to 'step in' and fulfil the repairing obligations of the building manager in the event the manager became insolvent; and
- The properties let out under assured tenancies contained a requirement for Clarion to repair the service installations and utilities infrastructure supplying these flats, which run through the common parts of the building.
The FTT agreed with Clarion's position that an obligation to repair should be absolute: a right to repair, or a conditional obligation (i.e; one that would only arise upon the insolvency of the management company) would not meet the criteria set out in section 72(1)(b) of the BSA.
Section 72(6) of the BSA provides that a common part is “… any part of the building provided for the use, benefit and enjoyment of the residents of more than one residential unit”. Whilst the FTT found that service installations could be enjoyed, ultimately it was held that the effect of section 96 of CLRA 2002 was to vest all of Clarion's tenancy agreements repairing obligations in relation to the service installations in the RTM company, meaning that the issue of whether they provided any benefit to the residents did not need to be considered.
The decision in Globe View House shows one of the potentially adverse consequences of establishing a Right to Manage Company. More specifically, as the BSA is relatively new legislation, and many of its provisions have yet to be interpreted in detail by the Courts. It is likely we will see further applications to the FTT in the coming years for clarity on questions such as who the 'accountable person' should be.
