6 Weeks for Developers to Sign £2bn Repair Contract
DEVELOPERS today received legally binding contracts that will commit them to pay to repair unsafe cladding on buildings over 11 metres.
The government has set a six-week deadline for developers to sign the legal agreements and is warning that companies who fail to sign will be prevented from operating freely in the housing market.
The contract, which has been drawn up by the Department for Levelling Up, Housing and Communities, will protect leaseholders in England from being billed for repairs for serious safety defects, including non-cladding related issues.
£2bn Repair Contract
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.
It 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.
Michael Gove, Secretary of State for Levelling Up
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.”
New laws to be brought forward this spring will create a Responsible Actors Scheme (RAS). The Levelling Up Secretary will also take action to ban managing agents and freeholders from being paid building insurance commission. This is in response to a report from the Financial Conduct Authority that suggested commissions make up almost a third of premiums charged to leaseholders. Other measures will make service charges more transparent and empower leaseholders who want to challenge their bills.
This follows confirmation from six major lenders that, from earlier this month, they will once again consider mortgage applications on dangerous cladding properties.
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