The government has set housebuilders a six-week deadline to sign legally binding contracts that will commit them to pay to repair unsafe buildings that are 11m or above.
The contracts, which were drawn up by the Department for Levelling Up, Housing and Communities, were issued today and housebuilders were warned if they failed to sign and comply with the terms of the contracts they would face ‘significant consequences’.
The government said new legislation brought forth in the spring would give the secretary of state powers to prevent housebuilders from operating freely in the market, unless they agreed to foot the estimated £2bn total repair bill of bringing unsafe buildings built or refurbished over the last 30 years up to scratch.
Under the terms of the contract developers also have to reimburse taxpayers where public money has already been used to fix unsafe buildings.
Forty nine developers have already said they would take responsibility to fix their own buildings and these commitments will now become legally binding.
Michael Gove, secretary of state for levelling up, housing and communities, 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. 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.”
Dean Finch, group chief executive at Persimmon, added: “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.”
According to the government, the new responsible actors scheme (RAS) being brought forward this spring will block developers from operating normally in the housing market for as long as they ‘do not resolve the problems of the past’. The government also warned it will take action to ban managing agents and freeholders from taking commissions when they take out building insurance and it will introduce further measures to make service charges more transparent and empower leaseholders who want to challenge their bills.
