Secretary of State for Levelling Up, Housing & Communities (DLUHC), Michael Gove, has given developers a hard deadline of six weeks to sign a legal agreement committing them to providing financial support and reimbursement to fix unsafe buildings.
The contract, put together by DLUHC, is designed to protect leaseholders from paying for costly repairs for serious defects, by committing housing developers to foot an estimated £2 billion bill to fund repairs.
Sent to developers on Monday 30 January, Michael Gove is demanding that they are held to account for impacted buildings developed or refurbished over the last 30 years.
The contract also requires developers to reimburse taxpayers where public money has been used to fix unsafe buildings.
Previously, 49 leading developers had publicly pledged to take responsibility, though the majority refused to sign the original contract unless it was radically altered.
Now, the Government has set a six-week deadline to sign the legal agreements, warning that companies who fail to sign and comply with the terms will face “significant consequences”. These may include restrictions on operating freely in the housing market, following new powers that will be given to the Secretary of State in the spring.
The Responsible Actors Scheme (RAS) will be created, granting the Secretary of State the power to block developers who fail to comply from carrying out development work or from receiving building control approval. The Levelling Up Secretary will also take action to ban managing agents and freeholders from taking commissions when they take out building insurance.
“Nowhere to hide for those who fail to step up to their responsibilities”
Secretary of State for Levelling Up, Housing & Communities (DLUHC), Michael Gove
Michael Gove, commented: “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.
“There will be nowhere to hide for those who fail to step up to their responsibilities – I will not hesitate to act and they will face significant consequences.”
Persimmon, a York-based housebuilder, has publicly outlined its commitment to the contract.
Dean Finch, Group Chief Executive at Persimmon, said: “Persimmon was proud to lead the industry two years ago with our original pledge to protect leaseholders. Since then, we have been making good progress on remediation and aim to be on site on all developments by the end of the year.
“The publication of the developer remediation contract is the culmination of many months of hard work on all sides and we are pleased to confirm our intention to sign the final document in the near future, becoming the first developer to do so.
“The terms of the contract are entirely consistent with our existing commitment to protect leaseholders in multi-storey buildings we constructed from the costs of remediating cladding and life-critical fire-related safety issues. We are pleased to reaffirm this commitment today and that we were able to work constructively with the Government to secure the agreement.”
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