Developers will also be barred from accessing government schemes if they refuse to remove cladding or pass on removal costs to leaseholders.
Communities secretary James Brokenshire has written to more than 60 private building owners and developers such as Lendlease, Pemberstone and GLA Land & Property stating what steps they must take to avoid penalties.
He said: “There is a moral imperative for private sector landlords to do the right thing and remove unsafe cladding quickly, and not leave leaseholders to cover the cost.
“A number of leading developers have stepped up to the mark and agreed to pay for work, and we urge others to follow their lead. If they don’t, we have not ruled anything out.
“I am also warning those who are not acting quickly enough to put in plans to remove dangerous cladding to take action now, or face enforcement action from their council.”
A spokesperson for the ministry of housing, communities and local government could not say exactly what action councils will be expected to take.
Polly Neate, chief executive of homelessness charity Shelter, said: “Of course landlords must do the right thing and remove dangerous cladding from their blocks. And leaseholders must not end up out of pocket as a result. Too many of them are facing massive bills as legal uncertainty continues about who should pay for this work.
“It will take time to settle many of the legal questions, but it’s clear that it’s not the fault of leaseholders that this cladding has been used and they shouldn’t be forced to foot the bill.”
Some developers like Barratt Developments, Mace group, Legal & General and Taylor Wimpey, have already agreed to cover removal costs for their buildings.
It was previously reported that homeowners were being urged to pay for the removal of unsafe cladding after building owners refused to meet the cost.
The government has committed £400m for councils and housing associations to remove dangerous cladding from their buildings.
MHCLG figures from August show that there were 293 private sector residential buildings in England with Grenfell-style ACM cladding systems that are unlikely to meet current building regulations’ guidance.
Of these, MHCLG has not been informed of remediation plans for 200 buildings.
