As of 3rd July 2023, the Responsible Actors Scheme (RAS) has officially passed into law in England, specifying which companies will be allowed to carry out major developments.
Launching this summer, the scheme requires members to sign a developer remediation contract, which ensures they must take responsibility for addressing fire safety defects in their buildings.
Developers who don’t join, or sign up but fail to meet the conditions of the scheme, will then be prohibited from carrying out further major developments – and may not receive approval for any construction work that’s already underway.
Here is what developers should know about the Responsible Actors Scheme, including what it covers, what developers are expected to do, and what could happen if they don’t.
As secondary legislation relating to powers established in the Building Safety Act 2022, the Building Safety (Responsible Actors Scheme and Prohibitions) Regulations 2023 establish the RAS for residential developers.
Members of the RAS are expected to demonstrate their commitment to remediating building safety by signing up to the developer remediation contract set up by the Department for Levelling Up, Housing and Communities (DLUHC).
Developers in the RAS must identify and remediate fire safety defects in residential buildings in England (including mixed-use) that are at least 11m high, which they developed or refurbished between 5th April 1992 and 4th April 2022.
RAS members must either carry out remediation work themselves at their own expense, or pay for remediation work in their residential buildings with life-critical fire safety defects, reimbursing government schemes for remediation work funded by taxpayers.
Eligible developers who fail to join or comply will have operational restrictions imposed on them.
The RAS is initially focusing on major housebuilders, and will also be expanded to cover large developers who have built or refurbished residential buildings that have been found to include critical fire safety defects.
Developers will be eligible for the scheme and invited to join by the Secretary of State if they meet the following criteria:
1) Residential property development is their principal business, they developed or refurbished buildings in England that are at least 11m high in the last 30 years (not solely as a contractor), and they meet the profits condition.
2) As a developer, they meet the profits condition, and have developed or refurbished multiple 11m+ high buildings in England during the relevant period that have been assessed as eligible for a cladding remediation government scheme.
3) Their average adjusted operating profit from 2017–2019 inclusive was £10 million a year or higher (the regulations will detail accepted exclusions for this profit condition).
Developers can also volunteer to join if they were responsible for developing or refurbishing a defective building during the relevant period which would otherwise have required mediation under the terms of the developer contract.
There are also provisions for company groups in the regulations, as the Secretary of State will expect the group to nominate one entity to sign up for the scheme on behalf of the whole group.
Eligible developers who are invited to join are expected to do so within a reasonable period by entering into a remediation contract with the DLUHC, after which the Secretary of State will add them to a published list of RAS members.
The government will not only publish a list of RAS members, but will also publish a list of developers who are not members despite being eligible – known as a ‘prohibitions’ list. Those who are eligible but fail to register will be automatically added to the list.
Those who do join but fail to provide evidence of compliance with the membership conditions will receive a formal warning, and if these failures continue, their membership will be revoked and they will be moved to the ‘prohibitions’ list.
Prohibitions will be applied in conjunction with each other, preventing developers on this list from carrying out all kinds of major developments and from receiving Building Control approval for current projects. This should be an incentive for developers to do the right thing in mitigating defects that they were responsible for.
The regulations will set out that prohibited persons will be forbidden from carrying out major development in England. Under the Town and Country Planning (Development Management Procedure) (England) Order 2015, ‘major developments’ include:
As these apply more widely than just the residential sector, developers cannot simply pivot to another sector if they have been named as a prohibited entity. They must notify local planning authorities that they are on the list, which can limit or refuse planning permission.
Prohibited developers can also be prevented from gaining approval from Building Control for any work that requires it, including rejection of initial notices or completion certificates. This could result in the suspension of ongoing work or demands to terminate projects entirely.
It is crucial for residential property developers to consider the implications of the Responsible Actors Scheme, as those who are eligible but do not sign up will not only be publicly ‘named and shamed’ but will also effectively be barred from working in the English market.
As the government continues to introduce further legislation enforcing the powers introduced by the Building Safety Act 2022, it is essential for developers to make sure the quality of their work meets the latest regulatory standards.
Part of this can include setting up structural warranties for properties during the planning stage, so building warranty providers can inspect the progress of each build and catch any problems that may otherwise go unnoticed before they can develop into latent defects.
To find out more about building warranties and how they can help developers and property buyers alike, get in touch with Architects Certificate. You can reach us by phone call, WhatsApp, or email – we will be happy to discuss our policies and provide a quote.
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