Gearing up for the Responsible Actors Scheme
Gearing up for the Responsible Actors Scheme
The Department for Levelling Up, Housing & Communities has published further details of the Responsible Actors Scheme (“the Scheme”), which will affect major developers in England. The government is aiming to finalise the regulations under sections 126-129 of the Building Safety Act 2022 and implement the Scheme in early Summer 2023, although no concrete date has been set yet.
Background
On 30th March 2023, guidance on the Developer Remediation Contract (DRC) was issued. The DRC is legally binding, and it requires the developers to:
- Remediate or pay for the remediation of life-critical fire safety defects in residential buildings over 11 metres in height or that they developed/refurbished in the past 30 years.
- Reimburse the remediation costs of life-critical fire safety defects in those buildings.
- Reimburse taxpayer-funded work to remediate the defects in those buildings.
- Meet all other obligations of the DRC, which includes keeping the residents in those buildings informed of the progress of the works.
The government has made it clear that eligible developers may face hefty consequences if they refuse to sign the DRC or fail to comply with its terms. At worst, they could potentially be out of business. As of 5th April 2023, 46 developers have signed the contract and 4 developers are yet to sign the contract.
Aim of the Scheme
It is to provide safety and a specific standard of building by requiring its members to comply with the terms under the DRC.
Who is eligible for the Scheme?
Developers are expected to join or remain in the Scheme if they meet one or more of the following criteria: –
- Meet a ‘profits condition’, which has an annual operating profit of £10 million or higher over a 3-year period and
- Developed or refurbished residential buildings over 11 metres in the last thirty years; or
- Developed or refurbished multiple buildings that have been assessed as eligible for a relevant government cladding remediation scheme.
- Developed or refurbished at least one residential building over 11 metres that qualifies for remediation under the terms set out in the DRC and volunteer to join the Scheme by signing the contract.
The Secretary of State can also invite developers to join.
Enforcement
The eligible developer must produce the required quarterly evidence to the Secretary of State that they have complied with the terms of their membership. Failure in doing so will result in their membership being revoked. The Secretary of State will also have the power to issue a formal warning to any member of the Scheme who appears to fail to comply with the membership conditions, although membership may be revoked without a prior formal warning in appropriate circumstances.
If an eligible developer refuses to join the Scheme, they may be subject to various regulation prohibitions, such as the Planning and Building Control prohibition. In short, the developers will be prohibited from: –
- Carrying out ‘major development’, which includes: –
- Providing 10 or more residential units; or
- Residential schemes on a site at least 0.5 hectares in size (if not known, it will provide 10 units or more); or
- Commercial development creating at least 1000 square metres of floorspace; or
- Development on site over 1 hectare in size.
- Gaining building control approval in respect of any building work that requires such approval, including initial notices, completion/final certificates, or any other building control approval such as amendment/regularisation notices.
Next Steps
The industry awaits receiving further guidelines regarding how the Scheme will operate. It is expected that the regulations will be brought into effect in early Summer, so the developers will have to watch out for the next phase of the Scheme.
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