The Building Safety Pledge

4 minutes reading time

At the end of January, the Government set a six-week deadline for construction developers to sign the new Building Safety Pledge contract.

It is a warning that companies who fail to sign and comply with the contract will face significant consequences.

Forty-nine of the country's leading developers have already signed up to the Government's pledge to take responsibility for fixing their buildings. The Government's pledge is now becoming legally binding with the Department for Levelling Up, Housing and Communities, which interested third parties can also enforce.

The contract, which the DLUHC has drawn up, will protect thousands of leaseholders living in hundreds of buildings across England. These innocent households would otherwise face costly repairs for serious safety defects, including non-cladding-related issues.

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The Building Safety Pledge

Secretary of State Statement

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."

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Secretary of State Statement

Developer Deadline

Developers have until 13 March 2023 to sign the 93-page 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. So, with the Building Safety Levy, the industry is paying an estimated £5 billion to make buildings safe.

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Developer Deadline

Criticism of Contract Terms

The Home Buyers Federation, whilst being committed to the principle that leaseholders should not have to pay the necessary remediation costs arising from the design and construction of the buildings in which they live, previously criticised the terms of the contract and told the Government that it was impossible to sign. Should a developer refuse to sign the contract, the Government intends to establish a scheme allowing 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 receiving building control approval. The scheme 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 Government is looking to significantly impact the progress of the remediation of unsafe buildings, which is welcome news for many. However, there are also concerns about the financial liabilities that this will create when combined with the implementation of the other parts of the Building Safety Act 2022 when the industry is currently facing challenging economic conditions.

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Criticism of Contract Terms

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