Responsible Actors Scheme: Which Developers will be Affected?

Last week, on the 4^th of July 2023, secondary legislation pursuant to the Building Safety Act 2022 was passed into statute. The Building Safety (Responsible Actors Scheme and Prohibitions) Regulations 2023 will impose prohibitions on developments where eligible developers fail to join the scheme or fail to rectify building safety risks that they are responsible for.

Aims of the Scheme

The Responsible Actors Scheme (RAS) will recognise action taken by responsible developers to identify and remediate or pay to remediate life-critical fire safety defects. The RAS aims to improve the safety and standard of buildings by preventing developers from starting new projects or completing existing ones if they are not remediating Relevant Buildings in their portfolio.

Eligible developers who do not join and comply with the Scheme will have planning and building control prohibitions imposed on them. These prohibitions aim to incentivise developers into remediating defects in unsafe buildings.

A Relevant Building is one that is residential (specifically including mixed-use), at least 11 metres high, located in England and developed or refurbished in the Relevant Period (between 5 April 1992 and 4 April 2022).

Consequences of Failing to Join the RAS

Eligible developers who do not join and remain in the Scheme will be prohibited from carrying out major developments and gaining building control.

Planning Prohibitions

An eligible developer is prohibited from carrying out major development of land. Major development of land includes:

• schemes providing 10 or more residential units;
• residential schemes on a site at least 0.5 hectares in size;
• commercial development of 1,000m or more floor space; and
• development sites over 1 hectare in size.

Planning Prohibition does not have retrospective effect and will not apply to planning permission granted before 4 July 2023. However, the prohibitions will apply to any subsequent application relating to all or part of the development.

An exception is provided for critical national infrastructure where it is deemed to be in the public interest to disapply the Planning Prohibition and Building Control Prohibitions.

Building Control Prohibitions

A developer who is eligible but does not join the RAS will not be able to give or receive relevant notices (i.e. building commencement notices), certificates, and applications.

There are some limited exceptions to this rule, for example in relation to emergency repair work, but the exception must be approved by the Secretary of State.

Eligibility

The Secretary of State will invite eligible developers to join the RAS.

Developers will be eligible for the Scheme if they meet one or more of three sets of criteria:

2. Their principal business is a residential property development; they meet the Profits Condition; they developed or refurbished 11m+ residential buildings in England in the last thirty years.
3. They are a developer who meets the Profits Condition; and developed or refurbished multiple buildings that have been assessed as eligible for a relevant government cladding remediation scheme.
4. They are a developer who developed or refurbished at least one 11m+ residential building that qualifies for remediation under the terms set out in the developer remediation contract; and they volunteer to sign the contract and join the Scheme.

The Profits Condition will be met by any developer whose average annual operating profit over a 3-year period (companies’ financial years ending 2017, 2018, and 2019) was £10 million or higher.

The criteria does not apply if the developer acted solely as a contractor.

Summary

The RAS is a significant step in the Government action to guarantee life-critical fire safety defects are remediated in Relevant Buildings. The implications of not being part of the scheme are detrimental to developers. Therefore, it would be greatly beneficial for developers to consider if they meet the criteria for the Scheme.

The RAS will ensure that developers taking on the cost of remediating unsafe buildings are not disadvantaged in the market against those who are not doing so. In addition, it is likely that being a member of RAS could soon be a tendering requirement and so the status of being a Responsible Actor will bring a lot of worth to the developer’s name.

Contact our Real Estate Dispute Resolution  team today

If you would like to discuss any issue relating to this blog, please do not hesitate to contact a member of the Real Estate Dispute Resolution Team on 01895 201759 or contact us via the enquiry form at the top of our Property Disputes page.