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Developers to sign building repair contracts

The Department for Levelling Up, Housing and Communities has announced that legally binding contracts have been sent to developers today, with the aim being to ensure that they are committed to the repair of unsafe buildings.

A six-week deadline has been set for the developers to sign the contract, alongside warnings that any developers who fail to sign the contract and comply with the regulations will face significant consequences.

The Secretary of State for Levelling Up, Housing and Communities is to be given increased powers to prevent developers from operating as freely in the housing market if they refuse to follow the instruction given by the department.

Leaseholders living in hundreds of buildings around England are set to be the ones to benefit from these contracts, with the department drawing them up to stop the leaseholders from facing costly repairs for serious safety defects. This includes non-cladding related issues.

By signing the contracts provided to them, the developers are committing to contributing around £2 billion at least to fund repairs to buildings that they have developed or refurbished over the course of the last 30 years. With this contribution and the Building Safety Levy, industry is directly paying around £5 billion to make safe their buildings. The contract will also require the developers to reimburse taxpayers for any previous repairs, where public money has been used.

Michael Gove, Secretary of State for Levelling Up Housing and Communities, 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.”

Action to ban managing agents and freeholders are also to be banned from taking commissions when they take out building insurance, in response to a report from the Financial Conduct Authority suggesting that commissions make up almost a third of premiums.

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