14 October 2024
As a resident director, understanding your responsibilities under the Building Safety Act 2022 can be complex, and questions about liability are often at the forefront. Many are concerned about whether individual directors can be held personally liable for breaches of the law, or if the Resident Management Company (RMC) is responsible.
In a statement, the Building Safety Regulator (BSR) helps address concerns, where the Accountable Person or Principal Accountable Person is a Resident Management Company (RMC) or Right to Manage Company (RTM).
Is an individual director personally liable for any breach of the law – or is the Resident Management Company responsible?
“The Building Safety Regulator will hold those who have duties to account if they fail to meet those duties. The dutyholders under Part 4 of the Building Safety Act [2024] are Accountable Persons and Principal Accountable Persons. If the Accountable Person or Principal Accountable Person is a Resident Management Company (RMC), Right to Manage Company (RTM), or any other corporate body, the Regulator would normally take enforcement action against that legal entity (the RMC itself) where it identified breaches of the law—rather than against individual directors. The Regulator will take the approach that it is those responsible for any breach that should be held to account for it. In general, this will mean the Regulator will enforce against the Resident Management Company rather than individual directors because it is the company that is responsible for the safety of the building”.
This should offer some reassurance to resident directors, as enforcement action will typically focus on the company itself rather than individuals. However, it’s important to note that individual liability is possible in certain cases.
The BSR explains:
The Building Safety Act does allow for action to be taken against individual directors. However, for the Building Safety Regulator to consider this, an investigation would need to show that the offence was committed with an individual’s consent or connivance (they actively allowed or agreed to some action, took some action, or turned a blind eye to something they knew to be wrong) or it was attributable to their neglect. Every investigation will look at the wider context and individual circumstances of the incident. Any decision relating to such enforcement action would be taken in accordance with the Regulator’s Enforcement Policy Statement and subject to a public interest test.
While these scenarios are not common, it’s crucial for directors to be aware of the risks and responsibilities that come with the role. For those who wish to safeguard against personal liability, appointing a Building Safety Director is an option, but it is not mandatory.
At LEASE, we continue to work closely with the BSR and other stakeholders to help answer these important questions and ensure that resident directors and leaseholders alike have the support they need.
