The Liability Shield
Leverage the liability shield built into the Building Safety Act to protect volunteer directors from personal exposure.
From Personal Risk to Protection
In a Resident Management Company (RMC) or Right to Manage (RTM) organisation , the entire Board functions collectively as the Principal Accountable Person (PAP).
The legal duties as PAP cannot be transferred and the individual directors face civil and criminal penalties for building safety failings. This includes failing to declare within 10 days any safety issues which could cause serious injury or death.
The solution lies in Section 161(4) of the Building Safety Act 2022, which explicitly states:
“Where….one or more (but not all) directors of the relevant company have been appointed for a building safety purpose and are entitled to remuneration from the company… [liability] does not apply in relation to a director who is not entitled to remuneration from the relevant company” .
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