The new measures were unveiled yesterday (14 February) by secretary of state for levelling up, Michael Gove.
The government said that those in the industry “not doing the right thing” by paying towards a building safety levy to fix historical problems with buildings could be blocked from receiving planning permission or building control sign-off on developments.
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The powers will be brought into law via amendments to the Building Safety Bill, subject to approval by Parliament.
The government said it “hopes to not have to use these powers” but that developers and manufacturers which do not act responsibly “must face commercial and financial consequences”.
Cost Contribution Orders will be able to be placed on manufacturers that have been successfully prosecuted under construction products regulations. These orders will require them to pay for buildings needing remediation.
Amendments to the Building Safety Bill would also allow building owners and landlords to take legal action against manufacturers which used defective products on a home that has since been found unfit for habitation. The power will stretch back 30 years and allow recovery where costs have already been paid out.
New clauses will also enshrine in law the commitment Gove made in the House of Commons last month that no leaseholder living in their own home, or sub-letting in a building over 11m, will pay for the removal of dangerous cladding.
Under the plans, developers that still own a building over 11m that they built or refurbished – or landlords linked to an original developer – will be required to pay in full to fix historic building safety issues in their property.
Building owners not linked to the developer but who can afford to pay in full will also be required to put up the money to do so.
“These measures will stop building owners passing all costs on to leaseholders and make sure any repairs are proportionate and necessary for their safety.”
Michael Gove
Where building owners do not have the resources to pay, leaseholders will be protected by a cap. The cap will be set at similar levels to ‘Florrie’s Law’ which applies to some repairs to social housing: £10,000 for homes outside London and £15,000 for homes in the capital. This will limit how much leaseholders in this scenario can be asked to pay for non-cladding costs, including waking watch charges, the government said.
Any costs paid out by leaseholders over the past five years will count towards the cap, meaning some leaseholders will pay nothing more. The government will carry out further consultations before finalising the cap.
Meanwhile, courts will also be given new powers to stop developers using shell companies, which make them difficult to trace or identify who they are run by.
Gove said: “It is time to bring this scandal to an end, protect leaseholders and see the industry work together to deliver a solution.
“These measures will stop building owners passing all costs on to leaseholders and make sure any repairs are proportionate and necessary for their safety.
“All industry must play a part, instead of continuing to profit whilst hardworking families struggle.
“We cannot allow those who do not take building safety seriously to build homes in the future, and for those not willing to play their part they must face consequences.
“We will take action to keep homes safe and to protect existing leaseholders from paying the price for bad development.”
