The condition of residential developments has come under increased scrutiny since the Grenfell Tower tragedy of 2017. Realising the risks of defective cladding and other property issues, along with the new Responsible Actors Scheme which we will outline below, the government has committed billions of pounds for vital repairs as part of the Private Sector ACM Cladding Remediation Fund, Social Sector ACM Cladding Remediation Fund, and the Building Safety Fund.
To ensure that property developers fulfil their obligations and, let’s be honest, to recoup their investment, the government shored this legislation up with the introduction of the Building Safety Pledge and the Developer Remediation Contract. The major property developers who signed up to the pledge accepted responsibility for remediation and are required to repay the funds and/or ensure the correction of cladding defects.
With the new Responsible Actors Scheme (RAS) issued this July, an allowance of six weeks has been made for the developers to sign the legally-binding contract drawn up by the Department for Levelling Up, Housing and Communities. Otherwise, they will face significant consequences, with the Secretary of State being given powers to ban Freedom to Operate (FTO) in the housing market for failed compliance under the Responsible Actors Scheme and in accordance with sections 126-129 of the Building Safety Act 2022.
In this blog, we’ll take an in-depth look at the terms and public perception of the scheme, highlighting what it means for property professionals.
Terms of the Responsible Actors Scheme
With the first phase of the Responsible Actors Scheme passing into law in 2023, it is expected that England’s property developers will commit an estimated £2bn or more for the repair of buildings that have been constructed or refurbished over the last 30 years. They will also have to accept the reimbursement of taxpayers, in the event that public money has been put towards essential property repairs.
This will apply to any residential buildings, which may include mixed-use buildings, located in England, which are at least 11 metres high (or 5 storeys) and have been developed or refurbished during the period starting on 5th April 1992 and ending on 4th April 2022.
Such a residential building is categorised as being either a self-contained building or a self-contained part of a building, which:
- Contains, at the date these Regulations come into force, at least one dwelling held under the terms of a lease with a term exceeding 21 years or as commonhold land, or
- Is owned by a registered provider of social housing.
Announcing the introduction of the scheme, Secretary of State for Levelling Up, Housing and Communities, Michael Gove, said: “Today marks another significant step towards righting the wrongs of the past and protecting innocent leaseholders, who are trapped in their homes and facing unfair and crippling costs. Too many developers, along with product manufacturers and freeholders, have profited from these unsafe buildings and have a moral duty to do the right thing and pay for their repair.
“In signing this contract, developers will be taking a big step towards restoring confidence in the sector and providing much needed certainty to all concerned.”
The scheme applies to those property professionals who fulfil the criteria set out in regulations 7, 8, and 9 of the draft regulations, apart from registered providers of social housing, or their subsidiaries, who are exempt.
While the terms should be checked on an individual basis, developers of buildings measuring higher than 11 metres and other developers of residential buildings known to have fire safety defects, by virtue of having been assessed as eligible for a relevant government cladding remediation scheme, may be deemed to have satisfied the criteria.
According to the draft regulations, all those signing up to the scheme will be required to identify, assess and remediate and/or mitigate buildings as soon as reasonably practicable. This may include the rectification of cladding and fire safety defects, with quarterly progress reports having to be issued to the Secretary of State.
Consequences of failing to comply with the Responsible Actors Scheme
Any property developers who either fail to sign the Responsible Actors Scheme within the allocated six weeks or don’t arrange for the specified repairs will be prevented from carrying out further developments and receiving building control approval. This will mean that they can’t continue with their regular housing market activities until they have taken action to rectify the problems of the past.
More specifically, failed compliance with the RAS will result in property developers being placed on the Secretary of State’s prohibition list. As such they will be unable to legally carry out major developments, including the provision of more than 10 dwelling houses, or where the floor space is to be 1,000 square metres or more, unless such developments are deemed critical to the national infrastructure by the secretary of state.
Any applicable persons will also be unable to give notice of property development, apply for planning certificates, apply to amend the initial notice, or be granted a certificate for unauthorised unless they are subject to one of the limited exceptions that include emergency repair work and the development relates to critical national infrastructure. They will be required to inform the local planning authority if making a planning application or acquiring an interest in land.
An increased focus on fire safety
The introduction of the Responsible Actors Scheme comes after the Fire Safety (England) Regulations 2022 came into effect in January of 2023. Applying to the responsible persons (RP) of high-rise buildings measuring over 18 metres, these regulations set out a number of measures which must be taken for the continued avoidance of catastrophes similar to Grenfell Tower. Such measures include the provision of fire safety instructions and appropriate use of fire doors for residents.
The fire safety regulations also specify the need for responsible persons to:
- Provide information about the design and materials of the high-rise building and the level of risk of those materials
- Undertake monthly lift inspections to ensure they are all functional, reporting any defects to their local Fire and Rescue Service immediately
- Install wayfinding signage that is visible in low light, identifying flat and floor numbers in the stairwells.
Digital solutions for safety-conscious developers
Given the potential risks of non-compliance, it is essential that property developers have relevant maintenance and repair schedules in place. Thankfully there are a range of digital tools, which can help in meeting such responsibilities, ensuring resident safety in compliance with the Building Safety Act.
Enabling streamlined property inspections and reporting, Property Inspect is a stand-out example. Our award-winning property inspection and operations app offers you the ability to:
- Collect property inspection data and issue reports
- Capture property condition photos and videos directly from your mobile or tablet
- Jump straight into the inspection of residential and commercial properties with pre-configured templates
- Take digital signatures for the recorded completion of property inspections.