The Clock is Ticking: Fix Fire Safety Defects or Face Ban

With the clock ticking on developers to sign new cladding remediation contracts or face being frozen out of the market, Michael Gove has been piling on the pressure for developers to sign up to a new agreement.

Under new plans to hold developers to account for cladding remediation, Levelling up secretary Michael Gove recently wrote to all developers operating in the UK to express that the deadline to pledge is looming.

The latest deadline of 13 March highlights the government's concern that developers will leave defective cladding on buildings across the UK without intervention.

Developers have until 13 March to respond to plans

With a firm stance on who is responsible for paying for the repairs, the UK Government have stated that developers must fund the work, with previous concerns that leaseholders would have to front the costs.

Since July 2022, developers and the DLUHC have been locked in heavy discussions and negotiations over the contract terms they must sign.

Naturally, having multiple housing secretaries within this time frame has proved difficult, with Michael Gove’s predecessor Greg Clark proposing a contract to replace the remediation pledge development.

In the most recent update, the 49 developers that have already signed the pledge will see that pledge turn into a legally binding undertaking and see all buildings more than 11 metres in height see defective cladding removed.

The total costs will amount to an eyewatering £3bn to pay for additional remediation, and so far, around £2bn has already been recovered from developers that have signed up.

Developers to return money received from Building Safety Fund

Government support has also supplemented £5.1bn through the Buildings Safety Fund for building more than 18 metres in height.

To ensure developers weren’t using this support to fund the remediation they were responsible for, part of the pledge entails returning any funds they received from the fund.

In his letter to the industry, Gove explained developers who fail to sign the pledge would be: “Blocked from commencing developments for which they have planning permission and from receiving building control approval for construction that is underway”.

This will come into force on the 13 March, immediately after the deadline to sign the contract.

Developers are concerned they will be responsible past natural life cycle

From the developers' perspective, there have been concerns regarding the wording of the contractors, with many housebuilders expressing worries that it could leave them exposed to costs beyond the ‘life-critical defects’.

The government confirmed it would set up a Responsible Actors scheme in the spring, using powers under the Building Safety Act to enable it to do this.

Gove explained that the DLUHC will: “Take steps to inform investors and customers of the risks arising from continuing their commercial relationships with the offending companies. The government will also review its commercial relationships and frameworks once it is clear who has or has not signed the contract.”

In response to this, the HBF acknowledged the crucial role they have in fixing the issues but expressed concerns that: “Government now needs to deliver on its commitment to get contributions from the numerous other parties involved in this crisis, including foreign builders and providers of the cladding at the heart of this crisis and not to repeatedly take the easy option to target UK companies.”

It warned: “In the current economic climate, repeatedly targeting UK businesses will cut housing supply, damage investment, and threaten hundreds of thousands of jobs.”

From a leaseholder and tenant perspective, debates around how it will be paid and when it will be implemented need to be resolved as soon as possible, as it is them directly at risk of fire hazards. While policy and legislation lag behind, the urgency required to resolve the crisis continues to grow. The Government hopes the new pledge will help ease frustrations.