House builders given six weeks to sign contract for fixing unsafe buildings

The government has imposed a six-week deadline for housing developers to sign legally binding contracts that will commit them to pay to repair unsafe buildings.

And the government warns that companies that 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.

Contract will protect thousands of leaseholders

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 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, the housing industry is directly paying an estimated £5 billion to make their buildings safe.

Requires developers to reimburse taxpayers

The contract also requires developers to reimburse taxpayers where public money has been used to fix unsafe buildings.

This follows the Secretary of State Michael Gove’s demand that developers are held to account.

This 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.

‘Significant step towards righting the wrongs of the past’

Mr 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.”

He added: “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.”

Responsible Actors Scheme

Under legislation to be brought forward this spring, a Responsible Actors Scheme (RAS) will be created.

This will allow the Secretary of State to block developers who have not signed the contract or failed to comply with its terms from carrying out development and from receiving building control approval.

This will prevent them from operating as normal in the housing market for as long as they do not resolve the problems of the past.

The Levelling Up Secretary will also take action to ban managing agents and freeholders from taking commissions when they take out building insurance.

This is in response to a report from the Financial Conduct Authority that suggested commissions make up almost a third of premiums.

The government will also bring in further measures to make service charges more transparent and empower leaseholders who want to challenge their bills.

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