Property developers today received legally binding contracts that will commit them to pay to repair unsafe buildings. The contract requires developers to fix buildings and reimburse taxpayers, with an estimated £2 billion expected to be committed to fund repairs.
The government has set a six-week deadline for developers to sign the legal agreements and is warning that companies who fail to sign and comply with the terms of the contract will face significant consequences.
Legislation will be brought forward in the spring giving the Secretary of State powers to prevent developers from operating freely in the housing market if they fail to sign and comply with the remediation contract.
The contract, which has been drawn up by the Department for Levelling Up, Housing and Communities, will protect thousands of leaseholders living in hundreds of buildings across England. These innocent households would otherwise face costly repairs for serious safety defects, including non-cladding related issues.
Under the contract, developers will commit an estimated £2 billion or more for repairs to buildings they developed or refurbished over the past 30 years. This means that together with the Building Safety Levy, industry is directly paying an estimated £5 billion to make their buildings safe.
The contract also requires developers to reimburse taxpayers where public money has been used to fix unsafe buildings.
This follows Secretary of State for Levelling Up, Housing and Communities, Michael Gove, demanding developers are held to account, which led to public pledges from 49 of the country’s leading developers that they would take responsibility to fix their own buildings, which will now be turned into legally binding commitments.
Secretary of State for Levelling Up, Housing and Communities, Michael Gove, 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.”
Guidance: Developer remediation contract