Developers’ Building Safety “Pledge” becomes binding

Some six months after the terms were to have been agreed, developers have finally received the agreement which will turn their ‘pledge’ into a legally binding contract.

Yesterday the Government wrote to pledge developers with the final form of the Self Remediation Terms and Deed of Bilateral Contract (the “Contract”) by which developers will commit to:

• being responsible – either by undertaking the works directly or through providing monies – for all necessary work to address life-critical fire-safety defects which are a result of the design and construction of buildings 11 metres and over which the developer built or refurbished over the past 30 years;
• keeping residents informed of the progress towards meeting this commitment; and
• reimbursing taxpayers any funding which the Government has spent on remediating the developers’ buildings.

Developers are required to sign the Contract within six weeks – by 13 March 2023.

To ‘encourage’ developers to sign the Contract, the Responsible Actors Scheme (“RAS”) will be brought into law, being a building industry scheme provided for under the Building Safety Act 2022. The Act empowers the Government to block developers who are not members of the RAS from carrying out further development irrespective of whether planning permission for the development has been previously obtained. Within its letter, the Government made clear that those who do not sign the Contract will not be permitted to join the RAS. Further, the Government will publicise who has not signed the Contract, and will “review its own commercial relationships” intimating that non-signers will not be eligible for any future Government contracts.

It will be a relief for leaseholders that a legal commitment from developers is finally required. While there will be some provisions within the Contract which are appropriate to ‘back-to-back’ to those undertaking the remediation works, developers cannot simply pass all the obligations from the Contract to the resident management companies (“RMCs”), right to manage companies (“RTMs”) or other entity responsible for a building’s maintenance. Rather, RMCs/RTMs need a legally binding agreement as between themselves and the developer dealing with the payment of monies for, or the undertaking of, any remediation works, along with proper building contracts, appointments and/or collateral warranties with/from any contractors and consultants involved in the remediation of their buildings.

Edwin Coe is currently assisting numerous clients with their cladding and fire safety claims. Should you have questions about the Self Remediation Terms and Deed of Bilateral Contract, the agreement or contracts required when remediating a building, the Building Safety Fund or any cladding issues, please contact Brenna Baye or any other member of our Cladding Team.

If you are interested in learning more about the implications of the Building Safety Act 2022, join us on 8 February 2023 for a seminar at Edwin Coe’s offices. Further details of our seminar can be found here.

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