Earlier this year, the government warned residential developers they had to sign a contract agreeing to repair unsafe buildings or face significant consequences. The government has now set out more detail about those consequences and developers’ obligations in its Responsible Actors Scheme (the Scheme). This article examines the Scheme and how it will affect developers.
In January, the government gave developers until 13 March to sign a ‘Developer Remediation Contract’ agreeing to remedy unsafe residential buildings of 11m and above developed in the 30 years before 5 April 2022. You can read about this in our article here.
Now this deadline has passed, the government has announced details of its Responsible Actors Scheme, which aims to improve the safety and standard of residential buildings in England. It plans to implement the Scheme early this summer.
Planning and building control prohibitions will impose “commercial consequence on any developer who is eligible for the Scheme but does not sign up to it”.
It has been reported that as of 24 March 2023, only six eligible developers had failed to sign the Developer Remediation Contract.
Eligibility for the Scheme
The Scheme is aimed at major housebuilders and large developers whose average annual operating profit over a three-year period (2017, 2018, and 2019) was £10m or more. The government will be expanding the Scheme in future to other developers that have developed or refurbished defective 11m+ buildings.
The Secretary of State will invite developers to join when they appear eligible for the scheme. Developers will then have a reasonable period to either join the Scheme or make representations that they do not meet the eligibility criteria. If it is determined that the developer is eligible, they will be expected to join the Scheme.
If an eligible developer opts not to join the Scheme, the Secretary of State will add them to a published list of entities to which certain prohibitions will be applied (see below).
Conditions of membership
A developer may only join and remain in the Scheme if they:
- Sign a Developer Remediation Contract
- Identify 11m+ residential buildings they developed or refurbished over the past 30 years known to have life-critical fire safety defects
- Remediate or pay for the remediation of life-critical fire safety defects in those buildings, and
- Reimburse government schemes for taxpayer-funded work to remediate defects in those buildings.
What are “life-critical fire safety defects”?
These include defects affecting external walls or cladding and internal parts such as compartmentation and fire stopping.
The planning and building control prohibitions
Prohibited developers will not be allowed to carry out major development in England. A major development is defined as:
- 10 or more residential units
- residential schemes on a site of at least 0.5 hectares (where it is not known if it will provide 10 units or more)
- a commercial development creating at least 1,000 square metres of floorspace, and
- a development on a site over one hectare in size.
Prohibited developers may also be unable to gain building control approval to start work, or completion or final certificates for completed work. In some cases, this may result in a notice to terminate or suspend the work.
Given the consequences of failing to do so, it seems eligible developers have little choice but to sign up to the Scheme.
Timetable for implementing the Scheme
The government intends to implement the Scheme under the Building Safety Act 2022 before the summer recess in July this year.
You can find out more about the Scheme on the government’s website here.
If you have any queries regarding the Responsible Actors Scheme, please contact Daniel Broughton at [email protected].
Disclaimer: The above is merely general guidance and should not be relied on as formal advice. We suggest you take professional advice before taking any action in relation to the issues discussed above.