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The Responsible Actors Scheme

By August 22, 2023January 4th, 2024No Comments

The Responsible Actors Scheme: What You Need to Know

Category

Commercial Property Insight

Date

August 22, 2023
The read

The Responsible Actors Scheme, a requirement of the Building Safety Act 2022, has recently been introduced. If you’re unsure whether you’re exempt from joining this scheme, read on as we share some important findings.

What is the Scheme?

Launched on 4 July 2023, the Scheme aims to enhance the safety and standard of buildings. Developers who fail to join the Scheme and comply with its conditions will face planning and building control prohibitions.

Members of the Scheme are required to:

  • Identify residential buildings in England, developed or refurbished between 5 April 1992 and 4 April 2022, that are over 11 metres in height and known to have life-critical fire safety defects.
  • Remediate and/or mitigate the life-critical fire safety defects in those buildings or bear the cost of remediation.
  • Reimburse government schemes for taxpayer-funded work related to the remediation of defects, thereby supporting the government’s efforts to make buildings safe.

 

Who is Eligible?

Currently, the Scheme primarily targets major housebuilders and large developers who have been involved in the development or refurbishment of multiple residential buildings with known life-critical fire safety defects, as determined by their eligibility for a relevant government cladding remediation scheme. This also includes mixed-use schemes.

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

  • Their principal business (more than 50%) has been residential property development (including mixed use), they meet the ‘profits condition’ outlined below, and they have developed or refurbished one or more residential buildings over 11 metres in height in England between 5 April 1992 and 4 April 2022 (excluding work done solely as a contractor).
  • They are a developer who meets the ‘profits condition’ outlined below and has developed or refurbished (excluding work done solely as a contractor) two or more buildings eligible for a relevant government cladding remediation scheme.
  • They are a developer who has developed or refurbished (excluding work done solely as a contractor) at least one residential building over 11 metres in height that qualifies for remediation under the terms set out in the developer remediation contract, and they voluntarily choose to join the Scheme.

The ‘profits condition’ is met if a developer’s average annual operating profit in the financial years ending in 2017, 2018, and 2019 was £10 million or higher.

 

Implications and Importance

This requirement may soon become a matter of due diligence for both public sector bodies when tendering contracts, and for funders. It will be crucial for them to confirm whether eligible developers have registered for the Scheme to avoid planning and building control prohibitions. It is possible that some public sector bodies and funders may even expect developers to voluntarily join the Scheme, regardless of whether joining is mandatory. Registering as a “Responsible Actor” may therefore bring benefits to developers, as fire safety continues to be a significant concern.

In conclusion, the Responsible Actors Scheme is a vital step towards creating safer buildings. It is essential for eligible developers to understand the criteria and obligations associated with the Scheme to ensure compliance and mitigate potential risks.