New measures to force industry to pay for building safety

The Government has said for those in 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.

The Department for Levelling Up, Housing and Communities remains in ongoing discussions with industry leaders – who agree that leaseholders should not pay cladding removal costs.

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".

Alongside further leaseholder legal protections, courts will also be given new powers to allow developers to be sued where they have used shell companies to manage specific developments, which make them difficult to trace or identify who they are run by.

Cost Contribution Orders will be able to be placed on manufacturers who have been successfully prosecuted under construction products regulations. These orders will require them to pay their fair share on buildings requiring remediation. 

Amendments to the Building Safety Bill will also allow building owners and landlords to take legal action against manufacturers who 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 the Levelling Up Secretary of State 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 who are not linked to the developer but can afford to pay in full will also be required to put up the money to do so.

In cases 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 walking watch charges, the Government said.

Any costs paid out by leaseholders over the past 5 years will count towards the cap, meaning some leaseholders will pay nothing more. The Government has said it will carry out further consultation before finalising this.

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."