Further to our update on 3 February regarding the Building Safety Pledge Contract , the Government has now passed The Building Safety (Responsible Actors Scheme and Prohibitions) Regulations 2023 that came into force on 4 July 2023.
Background
Since the Grenfell tragedy, the Government has been committed to ensuring that responsible parties are ordered to remedy and rectify life-critical fire safety defects in high-rise residential buildings, with the intent of improving the safety and standard of buildings and ensuring that those who do not comply are penalised appropriately.
The Building Safety Act introduced a raft of measures designed to achieve this aim and protect leaseholders from costly remediation works. The Responsible Actors Scheme ("RAS"), introduced by Sections 126-129 of the Building Safety Act 2022 ("the Act"), is the latest such mechanism to come into force.
The RAS will initially apply to major housebuilders and other residential property developers deemed as being 'eligible' – including those who have been responsible for buildings which have been deemed eligible for cladding remediation schemes. More specifically, a developer will be 'eligible' if:
- fifty percent or more of their adjusted operating profit is derived from residential property development;
- they have been responsible for the development of one or more buildings in the relevant period; and
- they satisfy the profit condition – in that adjusted profits during the relevant period are £10m or more.
The Government will invite eligible developers to join the RAS, giving them 60 days to do so. Alternatively, the developer may adduce evidence in that time to demonstrate that they do not satisfy the eligibility criteria. Those who accept the invitation for membership to the scheme will be required to comply with the provisions of the RAS and identify and remediate fire safety defects in residential buildings over 11m in height which they developed or refurbished between 1992 and 2022. In addition, the RAS requires that members reimburse government-funded remediation schemes, thereby assisting the Government in the delivery of the remediation of high-rise buildings.
Under the RAS, those developers (and persons they control) who refuse to join or comply with the RAS's conditions will be prevented from conducting future residential developments altogether as new prohibitions are introduced as part of the planning process. These developers will also be precluded from delivering current projects, and applications for building control approvals will be refused, including for both initial and final notices.
The Government plans to issue more guidance on the RAS by Summer 2023 and "well in advance of the prohibitions being applied to any developer".
Conclusion
The Government has delivered on its promise to ensure that any developers it considers to have contributed to fire safety defects remediate those defects, and to penalise any eligible developers who do not comply or enter the scheme.
Summary
Whilst this is good news for leaseholders, it is a turning point for the construction industry and those responsible for the safety and standard of buildings.
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