The Principal Accountable Person regime: the FTT's first decision

The First Tier Tribunal ('FTT') has made its first determination under section 75 of the Building Safety Act 2022 ('the BSA') as to the Principal Accountable Person ('PAP'). 

Background

The application concerned a mixed-use building known as Ovington Court, 197-205 Brompton Road, London, SW3 1LB ('the Building'). The Building comprised commercial premises in the basement, ground floor and parts of the first and second floors and residential premises across part of the basement, ground and first to eighth floors. 

The Applicants were the registered freehold owners of the Building. The Respondent had a leasehold interest in parts of the basement, ground and first to eighth floors. The Applicants retained an interest in possession of the structure and exterior of the basement and ground floors. The Respondent had a leasehold interest in the structure and exterior of the first to eighth floors. The Respondent also had an obligation to repair and keep their demise in good and substantial condition. 

The application was made by consent i.e. that both parties agreed that the Respondent should be the PAP and the matter was subsequently determined without a hearing. 

The legal framework

Firstly, the FTT considered the two-stage test in section 72(1) of the BSA to determine the Accountable Persons ('APs'). In this section, an accountable person for a higher-risk building is - 

(a) a person who holds a legal estate in possession in any common parts; or

(b) a person who does not hold a legal estate in any part of the building but who is under a relevant repairing obligation in relation to any part of the common parts. 

The definition of “common parts” within the BSA includes structure and exterior and any part of the building provided for the use and enjoyment of the residents of more than one residential unit. 

The FTT determined that both parties were APs. 

Where there is more than one AP for a building, section 73 makes provision for determination of the PAP. Pursuant to s.73(1)(b) the PAP will be the AP who holds: 

1. a legal estate in possession in the relevant parts of the structure and exterior of the building; or 
2. is within s.72(1)(b) because of a relevant repairing obligation in relation to relevant parts of the structure and exterior of the building. 

In this case, both the Applicants and the Respondent satisfied the definition in s.73(1)(b). Where these circumstances arise, an interested person may apply to the FTT for a determination as to the PAP. Pursuant to s.75(2) where there appears to be more than one AP, the PAP is “such one of those accountable persons as the Tribunal consider appropriate”. The discretion given to the FTT is wide and the BSA does not give any further guidance regarding what is “appropriate”.

The determination

The parties agreed that the Respondent is most “appropriate” as the PAP as they are under a repairing obligation in relation to: 

1. the structure and exterior surfaces of the majority of the Building, including floors 1 to 8 and those solely occupied for residential purposes (whereas the Applicants are responsible for the structure and exterior of the ground and basement floors); and 
2. the common parts generally within those floors. 

The FTT considered the parties analysis to be consistent with the provisions of the BSA and determined that the Respondent is the PAP for the Building. 

Takeaways

Whilst the determination is a relatively short read, we have lifted our out key takeaways: 

1. An application under s.75 can be made by consent and without a hearing; 
2. Where there is more than one AP for a higher-risk building and multiple APs satisfy the test in s.73(1)(b), the FTT will consider the extent of each AP's responsibility over the structure and exterior (i.e. who has responsibility over more of the building than others); 
3.  Where there is more than one AP for a higher-risk building and multiple APs satisfy the test in s.73(1)(b), the FTT will consider which AP is responsible for a larger portion of the building containing residential units; and
4.  Whilst the Judge stated that he makes no expressing finding on the point, he commented on whether an application to the FTT is necessary saying “where a party has been registered on the HRB Register as the PAP and there is no dispute that they should be the PAP, it is not obviously apparent that a determination by the FTT is also required”. Nevertheless, the Judge went on to acknowledge the benefits of such a determination - namely that it provides certainty to parties. We consider that the certainty provided by such an application is likely to outweigh the procedural aspects of applying to the FTT. Especially where the FTT is of the view that an application by consent can be determined without a hearing. 

For more information on the above, please contact Hannah Keane, Zoe McLean-Wells, or Ellie Fletcher.