Developers say they will sign cladding contract – but has Gove “retreated” on the terms?

As we have commented before, the Government wants to force housebuilders, not homeowners, to pay for fixing building safety defects for which they were responsible.

Michael Gove has now given housebuilders 6 weeks to sign up to a contract, or face tough sanctions.

But has he backed down on some key requirements?

We have reproduced below the “React News”, 31st January 2023 view:

Two of the UK’s largest housebuilders have agreed to sign the government’s cladding contract, saying housing secretary Michael Gove has rowed back on key conditions.

Barratt and Persimmon said they would sign the contract, which commits housebuilders to repair fire safety defects on all buildings built by them in the last 30 years, once they have reviewed it fully.

Negotiations had previously reached an impasse as housebuilders feared the terms of the contract in its original form left them facing potentially open-ended financial liabilities.

The new version of the contract, published at the end of January, tightens the scope to strictly life-critical building safety improvements; places limitations on third-party liabilities and developers who built a block as part of a joint venture; and limits the government’s right to amend the contract in future.

Neil Jefferson, managing director at the Home Builders Federation, said: “After months of negotiations, the contract better reflects the principles of the pledge”, but added it still put “huge pressure on UK businesses”, as it sat alongside other government cladding levies targeting the housebuilding industry.

“Sign the contract or find another line of work”
Debating the contract in Parliament yesterday, Gove said that any housebuilders asked to sign the contract who refused to do so within six weeks would be excluded from a new “responsible actors scheme”, essentially driving them out of business.

“Anyone who fails to sign the contract will be prohibited from carrying out future development and from receiving building control sign-offs for buildings under construction,” he told MPs. “A developer who fails to sign this contract will have to find another line of work.”

However Lisa Nandy, shadow housing secretary, questioned whether the terms of the contract had been diluted.

Nandy said: “A quick read of the contract on Gov.uk appears to confirm that he has retreated from his previous position and returned to the provisions agreed with his predecessors last summer, which, he said on retaking office, simply were not good enough.”

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