This weekend we heard Rt Hon Michael Gove’s (Secretary of State for Levelling Up, Housing and Communities) candid admission that Building Regulations were “faulty and ambiguous” in the run-up to the Grenfell Tower fire. This was, however, backed up with an assertion that there had been an “active willingness” on the part of developers to endanger lives for profit.
Gove’s mantra remains “polluter pays” and these comments were followed by a letter issued to developers today (30 January 2023) saying that Government expects them to sign a newly published ‘developer remediation contract’ as soon as possible.
Last year, 49 developers signed a public pledge committing to do the right thing to protect leaseholders and residents. Once signed, the contract will make those commitments legally binding., the contract will require developers to:
- Take responsibility for all necessary work to address life-critical fire-safety defects arising from design and construction of buildings 11 metres and over in height that they developed or refurbished over the last 30 years in England.
- Keep residents in those buildings informed on progress towards meeting this commitment.
- Reimburse taxpayers for funding spent on remediating their buildings.
The government has made clear that developers who refuse to sign the contract or fail to comply with its terms face significant consequences.
Commenting on the letter FIS CEO Iain McIlwee stated:
“This letter is a significant moment for construction and, whilst it is positive that the weight has rightly been lifted from the leaseholder, it darkens the shadow that hangs over the construction sector.
The inevitable next step is, for the developers that sign, to start to look to offset their liabilities onto the supply chain. They will engage lawyers to pull out heavily ammended standard form contracts, contracts that even the Government’s own Industrial Strategy recognise “can unfairly transfer legal risk” and that did not reflect the true working practices at the time. Cases like LDC vs GDC vs ESL and Mulallely vs Martley Homes start to give us insight into how this will play out.
The Building Safety Act is undoubtedly a force for long term good, but to truly support transformation in the shorter term it needs to be mirrored by a tightening of the Construction Act and some protection to SMEs in the supply chain. My fear now is that this opens the door to conflict and cost – adversarial behaviours will undermine change and resources that would be better expended on transformation and putting right mistakes of the past will be wasted”.
You can read the full letter from Richard Goodman, Director General, Safer and Greener Buildings Department for Levelling Up, Housing and Communities and view the proposed contract here
Read FIS Overview of the Building Safety Act here