As set out in our recent post (please see here), the Government published a draft version of the Building Safety (Responsible Actors Scheme and Prohibitions) Regulations 2023 (the “Regulations”) in May 2023 to establish the Responsible Actors Scheme (the Scheme). The Regulations were debated and approved by the House of Lords on 26 June 2023, and the House of Commons on 27 June 2023, and passed into law on 3 July 2023.
While the Regulations were approved, a number of aspects of the Regulations and the Scheme were subject to considerable debate within both chambers and various concerns over the drafting of the Regulations were raised. These concerns included:
- Concerns about how the application of the Scheme is determined by reference to a profitability threshold and it was suggested that this could allow unprofitable, but nevertheless reckless, developers to construct high-rise residential buildings without regard to the Scheme’s requirements.
- The explanatory memorandum to the Regulations indicate that the Regulations may be expanded in future to capture more developers of defective residential buildings. However, it is not clear what such expansion may entail.
- The provisions of the Regulations make the sanctions of the Scheme automatic, rather than giving the Secretary of State discretion to use them and in doing so determine the proportionality of the sanction.
- People living in buildings under 11 metres in height are being “forgotten”, with high insurance costs and an inability to sell their affected properties. However, the threshold for the application of the Scheme reflects the risk to life from historical fire safety defects and there is potential for the Regulations to be amended for buildings under 11 meters in height to be brought within the scope of the Regulations.
- Whether the Regulations would be effective in procuring the remediation of wider building safety defects, noting that the remediation contracts that the developers subject to the Scheme are required to enter into only require the developers to remediate life-critical fire safety defects rather than building safety risks as defined under the Building Safety Act 2022.
Burges Salmon comment
The enactment of the Regulations is likely to provide comfort to the residents of buildings subject to the Regulations as this will provide a mechanism to drive forward the remediation of life-critical fire safety defects in such buildings. It is also anticipated that the implementation of the Scheme should assist in the cultivation of improved safety standards for residential developments within the construction industry, and across the wider built environment sector.
However, the extent of the debate over the provisions of the Regulations indicates that there are a number of issues in relation to the remediation of wider building safety defects, and other associated issues, that remain unresolved and that further developments in the this area are probable, meaning that this will be a subject is likely to be of continuing interest to the construction industry, landlords and residents alike.
This article was written by Tom Weld, Genevieve Vaughan and Arthur Sullivan.