Developers looking at ‘legality’ of government demand to commit to funding cladding remediations

Builders have accused the government of taking a disproportionate approach with its plans to relieve leaseholders of remediation costs for unsafe flats. 

Developers were sent a letter by the government last week calling on them to sign a legally binding agreement that committed them to covering the costs of fixing tower blocks with dangerous cladding.

Industry body the Home Builders Federation (HB) said it was considering its position “on the legality of proposals” from the government, it was first reported by Inside Housing.

Developers have already spent or committed some £1bn to remediate buildings, while a new rules will raise billions more from them, the trade body said. 

Firms who do not pledge their agreement may be prevented from market participation, the government threatened last week

Ministers are attempting to force developers to cover the costs of a remediation fund worth billions for unsafe buildings between 11-18 metres in height. 

However, the HBF has accused the government of ignoring a “plethora of foreign companies and investment vehicles responsible for a large proportion of the remaining buildings that require remediation.” 

A spokesman for the Home Builders Federation said the sector had “engaged constructively” with the government to remove the burden of remediation costs from leaseholders.

He added: “The latest proposal, an open-ended and variable annual tax on UK home builders at a rate decided by a government department each year, under the threat of being unable to operate in the UK, is clearly not proportionate.”

The HBF reiterated its previous calls for the government to crack down on material providers, including “overseas companies that manufactured and sold the materials that have created the problems.”

He added: “As the Grenfell inquiry is shortly to consider, the government also needs to recognise the failings of its Building Regulations regime on which the industry has relied. We will continue to discuss the matter with the government in a reasonable and rational way and hope that it will be reciprocated.”

The Grenfell Tower inquiry is currently probing building regulations, following the tower block fire in June 2017 which killed 72 people.

In response to the HBF’s comments, a department for levelling up, housing and communities spokesperson said: “We expect industry to pay to fix unsafe buildings – nothing is off the table.”

“At a recent meeting, bosses of the country’s biggest developers agreed leaseholders should not pay. Now we need a fully funded plan from them by early March. If not, we will impose a solution in law,” they added.

Further details on what will happen if developers fail to take responsibility for fixing fire safety defects will be provided in due course, CityA.M. understands.