RICS Service Charge Residential Management Code puts the Building Safety Act at centre stage

The Code has added a BSA "glossary", a new section 9 specifically on the BSA and Appendix D. The Code includes an overview of the provisions of the BSA relating to the management of occupied residential buildings: those relating to (a) ongoing new duties in respect of higher-risk buildings and (b) the remediation of "relevant buildings".^[3]

Parties should be aware that the first half of section 9 sets out the BSA's definitions of "higher-risk buildings", "accountable person" (AP), "principle accountable person" (PAP), the AP and PAP's duties, and duties on residents and owners.

For example, the Code includes the full definition of an accountable person: ^[4] the person who (a) holds a legal estate in possession in any part of the common parts, or (b) 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. There can be multiple APs, but if there are several, the principal AP is typically the person who holds the relevant repairing obligation for the structure and exterior of the building.

The Code then adds practical guidance. The first point it highlights is that the definition of "common parts" under the BSA is "likely to differ from defined common parts in a particular lease (specifically in that it includes the 'structure and exterior of the building')." The Code states that under a tripartite lease, a "manager" (which may be a residents' management company or a right to manage company) is therefore likely to be an AP. Under a two-party lease, the AP will typically be the direct landlord or superior landlord.

The AP's duties are wide-ranging, including assessing and managing building safety risks, and sharing information with the Building Safety Regulator. The PAP has additional duties, such as preparing a building safety case report.

The Code therefore recommends that landlords (who are APs) should agree with their managing agents the extent to which relevant services will be provided by the agent, a third party or the landlord themselves. Managing agents will then need to declare the relevant duties to their professional indemnity insurance provider and arrange appropriate cover is in place. It also recommends that written management agreements should be updated to agree new scope of services and fee levels.

The new Appendix D of the Code includes additional information, beyond the information contained at Appendix C, leaseholders can expect to receive during the ownership of a flat if they live in a higher-risk building. Some are straightforward (such as instructions for use of fire control equipment and evacuation information), while others are more detailed (such as the resident engagement strategy). All of these documents must be provided as soon as reasonably practicable.

The second half of section 9 deals with relevant buildings. The definitions of "relevant building", "relevant defect", "qualifying lease" are set out in full in the Code;^[5] as are the "leaseholder protections" limiting recovery of service charges from qualifying leaseholders.^[6] The Code also explains the landlord certificate and leaseholder certificate procedures,^[7] which impairs a landlord's ability to recover service charges for remediation works if not followed correctly.

The updates to the Code clearly raise awareness of key provisions in the BSA, including for leaseholders who were previously unfamiliar with the BSA. Landlords and agents need to ensure they are prepared and agree who is responsible for compliance with duties under the BSA and the Code.  This will be an ongoing exercise for landlords as other elements of the BSA come into force, particularly for landlords with large residential portfolios.