A manager appointed by a tribunal under section 24 of the Landlord and Tenant Act 1987 cannot be an “accountable person” within the meaning of section 72 of the Building Safety Act 2022.
In Unsdorfer v Octagon Overseas Ltd and others [2024] UKUT 59 (LC); [2024] PLSCS 55, the Upper Tribunal (Lands Chamber) had to consider whether the FTT had been correct to find that a tribunal-appointed manager was not an accountable person under the 2022 Act. The appeal proceeded on an expedited basis as the renewal of the appointment is due to be considered in May.
The 1987 Act allows managers to be appointed to carry out such functions in connection with the management of premises as the tribunal thinks fit. An appointment may only be made where the tribunal is satisfied that one of the statutory conditions is made out (almost all of which require a finding that there has been a management failing by the entity responsible for the building), and the making of the order must be just and convenient.
The 2022 Act substantially came into force on 6 April 2023. Part 4 concerns “higher-risk” buildings, being buildings of seven or more storeys or taller than 18 metres in height. It creates the status of “accountable person” for a person who owns or has obligations to repair any of the common parts of a higher-risk building and is concerned with their duties (primarily for matters related to fire safety). Where there is more than one accountable person, a principal accountable person may be designated.
The 2022 statute identifies two ways in which someone may be an accountable person. Either they hold a legal estate in possession of the common parts or (if they do not hold a legal estate in possession in any part of the building) they are under a relevant repairing obligation in relation to any part of the common parts, being a requirement under a lease or by virtue of an enactment to repair or maintain.
The 2022 Act also made amendments to the 1987 Act. Breach of building safety regulations by an accountable person cannot be relied upon to appoint a manager under section 24. An order appointing a manager should not provide for the manager to carry out the functions of an accountable person. If the accountable person is failing to fulfil their duties then the building safety regulator may take responsibility away from them and give it to a special measures manager appointed by the FTT.
This case concerned Canary Riverside, a large mixed-use area in London’s Docklands with five higher-risk buildings. The buildings had been the subject of disputes and their residential parts had been under the management of a court-appointed manager since 2016, with Mr Unsdorfer being appointed as a replacement manager in 2019.
The landlords sought a determination as to who was the accountable person, with the manager maintaining that he was capable of fulfilling that role. Following the reasoning of Maunder Taylor v Blaquiere [2002] EWCA Civ 1633; [2003] 1 WLR 379; [2003] 1 EGLR 52, the Upper Tribunal held that the proper analysis was that the manager’s obligations came from the order and were not properly described as obligations “under a lease” or by virtue of an enactment. Accordingly, a tribunal-appointed manager was not the accountable person under the 2022 Act.
So long as a tribunal order made prior to the 2022 Act is in force, a manager should continue to comply with it (notwithstanding that it includes building safety issues), but the manager does not have to carry out building safety functions that are not required of the management order. Although there may be an overlap between the manager and the landlord, this will be temporary.
The Upper Tribunal observed that when the appointment expires, responsibility for all management functions will revert to the landlord. If an application is made to vary or extend the order, such new order as the FTT may make will take away from the manager those functions that Part 4 of the 2002 Act confers on the accountable person.
Managers whose appointment predates the 2022 Act (and whose functions overlap with the accountable person) may find it impossible to continue without seeking directions, and it is likely to be prudent for such a manager to inform the regulator (even though the regulator has no authority over such tribunal-appointed managers) and the landlord.
Elizabeth Haggerty is a barrister
