Lawbite: Who is the Principal Accountable Person? Unclear building plans create uncertainty

The First-tier Tribunal (“FTT”) has confirmed the process for determining the identity of the Principal Accountable Person (“PAP”) of a building for the purposes of s73 of the Building Safety Act 2022 (“BSA”) where more than one Accountable Person (“AP”) potentially meets the PAP test under s73 BSA.

The decision highlights the difficulties which can arise when assessing who should be the PAP in the case of uncertainty, in this case caused by unclear lease drafting and unclear lease plans. It also shows that where there is no disagreement between the parties as to who is the PAP, the FTT will be slow to interfere.

This decision is relevant to those who are APs in a higher-risk building in England where there is uncertainty as to who may be the PAP. It will also be of interest to leaseholders in such properties who wish to understand who is liable under the BSA’s duty holder regime.

The Application

The Riverside Group Limited (“Riverside”) owns a leasehold interest in Navigation Court in London (“the Building”) and is registered as the PAP on the register of high-rise residential buildings. It questioned its own status as a PAP, however, due to unclear plans within its lease. These plans meant that it was not possible to determine conclusively whether or not a certain area of the Building demised by its lease included the structure and/or exterior of the Building.

Riverside wanted to be the PAP, but it was aware that another AP for the building was a potential alternative PAP. The other AP was the landlord, Abacus Land 4 Limited (“Abacus”). For the sake of certainty on the point Riverside applied to the FTT for a determination that it is the PAP for the Building, joining Abacus as respondent. Abacus did not challenge the application and agreed that Riverside was the correct PAP.

Who is the PAP?

Where there is more than one AP, s73(1) BSA provides that the PAP is the AP who holds:

(a) a legal estate in possession in the relevant parts of the structure and exterior of the building, or

(b) is within s72(1)(b) BSA (which establishes the definition of an AP) because of a relevant repairing obligation (within the meaning of that section) in relation to the relevant parts of the structure and exterior of the building.

S73(1)(b) BSA is subject to s75(2) BSA which provides that where more than one AP falls within s73(1)(b) BSA, an interested person may apply to the Tribunal for a determination as to who is the PAP. In these circumstances the PAP is “is such one of those accountable persons as the Tribunal considers appropriate”.

The Tribunal’s determination

The FTT determined that Riverside was the PAP for Navigation Court. Key to this finding was that:

• there was no dispute between the APs for the building that Riverside was the PAP;
• no evidence was produce to support an assertion that Abacus was the PAP; and
• Riverside was already registered as the PAP.

It is worth noting that although Abacus did not attend the hearing and the FTT determined to proceed in the interests of justice and because both parties were in agreement on the substantive issue.

Takeaways

• unclear lease drafting and plans could lead to uncertainty as to who the PAP is for a higher-risk building in England;
• in such cases an application under s75 BSA may be made to determine who is an AP or PAP - only the Tribunal can make this determination
• this decision indicates that the Tribunal may be slow to interfere where there is agreement between the parties as to who is the PAP
• it appears that the FTT may also be persuaded by who is already registered as the PAP when considering an application under s75
• this case also highlights the importance of reviewing lease terms early to identify any areas that might create uncertainty as to accountability under the BSA’s duty-holder regime