Richard Goodman, Director General – Safer and Greener Buildings at NDLUHC sent a letter to developers on Monday, 30th January 2023, notifying that the Secretary of State for Levelling Up, Housing and Communities, Michael Gove, “expects developers to sign the contract as soon as possible”, with a final deadline of Monday 13th March 2023, just six weeks from the time of receipt.

The PD is expected to take into account all “reasonable interests and concerns of the leaseholders, residents, occupiers and other users of the Building Requiring Works” and:

• Undertake at its own costs;
• Procure at its own cost through a suitably experienced and qualified sub-consultant, sub-contractor or supplier or any other person (other than the Responsible Entity), or;
• Fund the costs of the Responsible Entity (via a funding agreement or otherwise) to undertake or procure,

All necessary work in relation to each Building Requiring Works to ensure that any and all Defects are remediated and/or fully mitigated as soon as reasonably practicable.

Costs of the remediation ‘Works’ will include such costs and will include all reasonable and properly incurred costs directly arising from;

• Carrying out and completing the Works and subsequently remedying all snagging items and other defects arising from the Works, in respect of the remediation and/or mitigation of any Defects;
• Arranging access to the Building Requiring Works, including (where necessary) the grant of rights from the owners of neighbouring land or property, provided that nothing in these Self-Remediation Terms or the Contract will be taken to require the Participant Developer to pay unreasonable and unusual fees to any Third Party in order to gain access to the Building Requiring Works;
• Any cost overruns that relate to the carrying out and completion of the Works and which may arise over the course of the Works until practical completion of the Works (that are not due to the fault, negligence, act or omission of the Responsible Entity (where it is not a PD Group Company of the Participant Developer) or persons employed by it in relation to the Works);
• Moving residents out of the Building Requiring Works where reasonably considered necessary by the Participant Developer (after consulting with, and having regard to the views of, the Responsible Entity and/or any regulatory authority), including:
  • to avoid an immediate or imminent threat to life or other personal injuries; and
  • Where the Works create or are reasonably expected to create circumstances with which residents of the Building Requiring Works cannot reasonably be expected to live, including but not limited to situations where the Works create noise or other disturbances which would constitute a legally actionable nuisance and including any associated accommodation costs so the Works can be carried out;
• Costs of any professional advisers that may be appointed in relation to the Works by any Responsible Entity or by or on behalf of not less than 50% in the number of all of the leaseholders in the relevant Building;
• Costs of any professional advisers that the Responsible Entity may appoint in relation to the Works Contract and;
• Costs of obtaining any planning, building control or other statutory or regulatory permissions, consents and approvals required in respect of the Works, provided that:
  • Any costs must be agreed in writing between the Responsible Entity and the Participant Developer prior to such costs being incurred in relation to the Works (such agreement not to be unreasonably withheld or delayed by the Participant Developer); and
  • The obligations do not require the Participant Developer to reimburse any Responsible Entity or leaseholder for any adviser-related costs that have already been paid or incurred by the Responsible Entity at the date of the Contract.

Costs of the remediation ‘Works’ will not include the following;

• The cost of interim safety measures (including waking watch costs and alarm upgrades);
• Increases in buildings insurance premiums;
• Any leaseholder compensation (although there are exceptions); and
• Other works (as defined and subject to various clauses) that the PD is responsible for, including, but not limited to;
  • any works required solely as a result of any Alterations)
  • Any works identified in any survey, assessment, inspection or investigation into the design and/or construction and/or maintenance of a Building, including in any FRAEW and/or Fire Safety Assessment, or otherwise as the Works progress, the undertaking of (and the costs associated with) such ‘other’ works are not within the scope of the PD’s liability.

Once in place and submitted to DLUHC, they hold the rights to audit the FSA and/or FRAEW for a period of 2-years from the date of receipt (providing 20-Business Days’ notice) to check, amongst other things:

• The FSA assessor and/or FRAEW assessor is suitably experienced, qualified, independent and competent.
• The criteria outlined in the definition of “Up-to-Date” have been satisfied.
• The conclusions of the Up-to-Date FSA and/or Up-to-Date FRAEW (as applicable) are justified, taking into account all relevant factors as set out in the Standard as applicable at the date of the relevant assessment.

DLUHC do state that they may (‘acting reasonably’) amend the ‘Self-Remediation Terms’ from time to time, on providing not less than 10 Business Days prior written notice to the Participant Developer and always provided that any such variation will only be effective if it:

• Is of an administrative, formal, minor or technical nature or which is made to correct a manifest error; or
• Does not materially prejudice the Participant Developer.

Given the number of amendments we are experiencing with recently released legislation, not least the Buuidling Safety Act 2022, one imagines that edits to the contract should be expected as it is reviewed by developers and their legal representations, either in the short or long term.

In what was an orchestrated ‘mic-drop moment’ for Michael Gove, designed to have an immediate impact on getting his message across, it probably had the desired effect. After all, developers have just 6-weeks to respond, leaving little time for a subtle message to get through to the masses.

To his credit, Gove’s message was abundantly clear in the Sunday Times interview: sign up to the terms to repair unsafe buildings, or you’ll effectively lose the ability to keep on building.

But perhaps as, if not more striking, was his admission that the UK government shares responsibility for Grenfell. This has been clear for quite some time, but this was probably the most public admission yet.

We understand the letter may not be sent to social landlords, even the original developers, but that the government will expect them to cover the cost of defects without passing the bill on to leaseholders.

Therefore, further clarity would be welcomed; we’ll release more guidance as it is made available.

More to follow…