13 March 2023 marked the deadline for when the Government expected housebuilders and mixed-use developers to sign up to commitments contained in a new 'developer remediation contract'.

The mass-entry contract with the Department for Levelling Up, Housing and Communities is relatively unusual and has come about as a result of concerns following the Grenfell fire; it soon became apparent that there were a great many buildings that had worryingly similar fire safety defects through poor design and/or construction, leading to very expensive remedial schemes which typically leaseholders were having to fund. This has been considered to be grossly unfair and initially, the Government set up tranches of funding to expedite the remediation of the most urgent buildings. This was of course funded by the taxpayer, which many also considered to be unfair.

Many steps have been taken since to improve matters going forward, largely centring around the Building Safety Act 2022 and the ongoing gestation of its associated regulations, but the developer remediation contract is another means of ensuring the risks to residents of tall buildings are effectively mitigated.

The contract requires the signatory developers to:

• Take responsibility for all necessary work to address life-critical fire safety defects arising from the 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.

In many cases, the contract may simply be an alternative means of the signatories meeting any liability under the newly extended (also 30 years for new dwellings) limitation period under the Defective Premises Act, or pursuant to a breach of private building contract claims relating to more recent contracts. There have been three cases in the Technology and Construction Court since the Grenfell fire (all in the last six months or so) relating to fire safety and the public policy considerations towards safe buildings are apparent in each of the court’s judgments, which will not have gone unnoticed by developers. Clearly committing to resolve matters, rather than having to deal with at least the threat of legal proceedings, will cast many of these developers in a better light (improving their reputation and future image, with some developers already proudly declaring that they have signed up) so it is understandable why becoming a signatory is attractive. The Government has threatened those eligible developers who have refused to sign the contract (or who sign but refuse to honour it) with 'significant consequences' (including injunctions) so it certainly appears to be a carrot-and-stick approach.

The obligations apply to new builds and refurbishments (not defined) whether residential or mixed-use, provided that the relevant buildings contain one or more residential commonhold or leasehold properties under a lease with a term exceeding 21 years (or, significantly, any building owned by a registered provider), in all cases with an effective height of 11 metres and above.

The obligations include a developer:

• using reasonable endeavours to identify and assess buildings needing work;
• to carry out and complete necessary work at its own cost (with stipulations relating to the contractual arrangements relating to such work), or to at least fund it;
• meeting decant/alternative accommodation costs where necessary;
• meeting certain professional adviser’s costs;
• meeting the costs of obtaining any necessary planning, building control or other statutory or regulatory permissions, consents and approvals.

There are a number of limitations on the obligations in certain scenarios, for example where there have been certain full and final settlements; the exclusion of any interim safety measures (e.g. waking watch) and any increased insurance premiums, but they do appear comprehensive overall.

49 developers had already signed up to the Government’s ‘pledge’ (which led to the contract) but as of the deadline, ‘only’ 39 had signed up. Undoubtedly, government pressure will be brought to bear on those who have yet to sign.

It of course remains to be seen how developers will 'walk the walk', having 'talked the talk' of signing the agreement. Still, this new contract does have the potential to give residential (including social housing) and mixed-use landlords a new and powerful means of resolving serious fire safety defects across the built sector. How contractors proceed will be subject to close scrutiny by many. A direct approach requiring developers to take action under the terms of the agreement in a timely way would be appropriate. 

Do contact us for advice if you have fire safety issues for any of your buildings, including any that could be affected by this new self-remediation contract.