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House builders given six weeks to sign contracts to fix fire safety defects
The government has given housing developers a six-week ultimatum to sign up to legal agreements to fix dangerous buildings or face enforcement action that will stop them building new homes.
The new Building Safety Act, which came into force last year, allows ministers to remove the right to obtain planning permission and building control approval from developers that do not sign up.
Unless they agree to the contracts – which oblige them to fund repairs on properties they developed that are taller than 11 metres – in the next six weeks, the government has said it will take this step.
Under the contracts, they are expected to provide £2bn in new funding. This is in addition to the £3bn that will be raised through the Building Safety Levy in coming years.
The contract, published here, also requires developers to reimburse taxpayers where public money has been used to fix unsafe buildings.
The announcement was accompanied by a statement from Persimmon, one of the largest house builders in the UK, saying it was “entirely consistent with our existing commitment to protect leaseholders in multi-storey buildings” and that the firm was “pleased to confirm our intention to sign the final document in the near future, becoming the first developer to do so”.
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In a letter sent to developers today, Richard Goodman, director general of safer and greener buildings, wrote: “Unless the department has agreed to grant an extension, a developer that does not sign the contract by 13 March should expect that fact to be public.
“The department will take steps to inform investors and customers of the risks arising from continuing their commercial relationships. The government will also review its own commercial relationships, programmes, engagement and procurement frameworks accordingly.”
So far, 49 developers have pledged publicly to fix buildings they were responsible for constructing following pressure from housing secretary Michael Gove.
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.
“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.”
It is understood the letter will not be sent to social landlords - even where they have acted as developers on schemes.
However, the government has said it expects them to cover the costs of defects without passing bills on to leaseholders.
A Responsible Actors Scheme will be created, which will allow the government to block developers that have not signed the contract or failed to comply with its terms from carrying out development and from receiving building control approval.
Mr Gove will also 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 which suggested that commissions make up almost a third of premiums.
The announcement followed an interview on Sunday where Mr Gove admitted that “flawed” government guidance had contributed to the cladding crisis.
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