The contracts have been delivered to developers. Under the new conditions, developers must commit £2bn or more for repairs to buildings over 11 metres they developed or refurbished over the past 30 years.
Along with the Building Safety Levy, the industry is paying around £5bn to improve buildings.
The contract also mandates developers to reimburse taxpayers where public money has been used to fix unsafe buildings.
Around 49 of the country’s leading developers, accounting for half new homes at the time, made public pledges to take responsibility to fix their own buildings, agreeing to commit £2bn to fix their own building and further £3bn through an expansion of the Building Safety Levy last year.
The Department for Levelling Up, Housing and Communities (DLUHC) said these will now be turned into “legally-binding commitments”.
Secretary of State Michael Gove said at the time that there was little time for remaining developers to sign up to the agreement and those who refused to pay for the remedial costs would face consequences.
Legislation to be brought forward
The DLUHC said that legislation would be brought forward in the spring which would allow the government to “prevent developers from operating freely in the housing market if they fail to sign and comply with the remediation contract”.
The legislation will also aim to create a Responsible Actors Scheme, which would give Secretary of State Gove the power to block developers who have not signed or complied with the contract terms, such as going forward with development and receiving building control approval.
“This will prevent developers from operating as normal in the housing market for as long as they do not resolve the problems of the past,” the DLUHC said.
Action will also be taken to ban managing agents and freeholders from taking commission when they take out building insurance. This is in response to a report from the Financial Conduct Authority that suggested commissions make up almost a third of premiums.
‘Nowhere to hide’
The government has also said it would bring in more measures to “make service charges more transparent and empower leaseholders who want to challenge their bills”.
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.”
He continued: “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.”
This is that latest update in the ongoing saga of cladding remediation, with reports suggesting that Greg Clark, who was briefly housing minister, had sent out contracts to developers last year. This came after Gove had secured an agreement with some UK’s major housebuilders.
The six largest mortgage lenders confirmed this year they would start lending on properties needing cladding remediation as long as there is evidence of self-remediation, coverage from government schemes or protections from the Building Safety Act.
The act came into force last year, with key players at the time suggesting that secondary legislation would need to be introduced to clarify certain issues.
