We are now just over two years into the Building Safety Regulator’s (BSR) five-year plan to undertake in-depth assessments of an estimated 12,500 occupied higher-risk buildings in England.
During that time, fewer than 2,000 higher-risk buildings have been called in to apply for building assessment certificates (BACs), which the regulator issues to confirm a building has been assessed and that the accountable persons are fulfilling their duties under the Building Safety Act 2022.
This slow progress means that less than half the number of buildings have been assessed relative to the originally programmed timeframes, with the regulator admitting in a recent press release that the assessment processing times are twice as long as initially expected.
Of greater concern was the confirmation of the widely reported figure that, so far this year, 66% of BAC applications have been refused – indicating that either the application process is not well understood by accountable persons or that many higher-risk buildings are not being well managed, or both.
The regulator has announced that it is therefore resetting how it assesses applications for such certificates, moving to a more proportionate, intelligence-led, risk-based approach.
Legal duties remain firmly in place
However, it has been made clear that this is a reset of process and not legal duties. The legal duties remain firmly in place, and all accountable persons must continue to proactively prevent and mitigate the risks of spread of fire and structural failure.
One of the key themes within the regulator’s press release was a focus on resident-led management companies (RMCs). RMCs are usually building-specific, volunteer-run companies whose members and directors consist of individual leaseholders, who may not have the knowledge or experience to navigate the complex building safety requirements.
“… it has been made clear that this is a reset of process and not legal duties. The legal duties remain firmly in place, and all accountable persons must continue to proactively prevent and mitigate the risks of spread of fire and structural failure.”
However, despite not necessarily being equipped to take on the role of accountable person, it is now largely the norm for RMCs to be the principal accountable person, especially in newly developed schemes. This arises from the way that leasehold ownership structures are commonly set up by developers needing an exit, after the ban on ground rents brought an end to professional investors acquiring and managing blocks of flats.
Not addressed in the press release but also of particular concern is the situation faced by affordable housing providers that have affordable homes pepper-potted within mixed-tenure higher-risk buildings, where the principal accountable person is the RMC, but the housing provider does not have a majority vote on the RMC.
Fire safety arrangements
In these circumstances, the housing provider is not in control of the fire safety arrangements and cannot fully protect its tenants (especially those from vulnerable groups) if the RMC is falling short of its legal obligations.
The regulator will address this issue by giving RMCs more time to prepare their evidence and offering pre-application advice and support with a named contact at the regulator.
This is a welcome move and will be even more important once commonhold becomes the default tenure for blocks of flats. Under the Building Safety Act, a commonhold association – which is effectively run in the same way as an RMC – will always be the principal accountable person.
RMCs do have the option of appointing a paid building safety director, which would relieve unpaid directors of the RMC from personal criminal liability for any breaches of the accountable person duties by the RMC.
Lack of skilled safety directors
But identifying a suitable building safety director may be difficult due to their lack of availability and high cost. Such additional costs are ultimately borne by leaseholders through service charges.
It is unclear at this stage what the best way forward is for managing long-term building safety duties. There needs to be the required level of skill and expertise to manage a complex process and ensure that the residents are safe, while ensuring that leaseholders are not subject to unduly high service charges to cover this cost.
While the regulator’s announcement is a step in the right direction, there still doesn’t appear to be full recognition within government or the regulator that if principal accountable persons (whether resident-run or not) are obliged to obtain multiple additional surveys and consultants’ reports in connection with applications for BACs. This will result in higher service charges that ultimately must be paid for by the leaseholders.
The bottom line is that while more time and support is coming, there is no relief from the underlying legal duties and the core-capability gap (volunteer directors managing highly technical, liability-heavy compliance regimes on constrained budgets) is a systemic issue and a difficult one to overcome.
Melanie Dixon is a senior associate at Trowers & Hamlins
