Going after developers for the cladding crisis - is this enough?

Michael Gove has written a letter to the residential property developer industry requiring developers to agree a plan of action by early March including remediating unsafe cladding on 11-18 metre buildings, currently estimated to be £4 billion. Developers are warned that they must pay to fix the cladding crisis.

Gove warns that he will take all steps necessary to make this happen, including restricting access to government funding and future procurements, the use of planning powers and the pursuit of companies through the courts. He adds that if industry fails to take responsibility, the government will, if necessary, impose a solution in law.

Until now residents in blocks less than 18 metres high have not been eligible for any government support to remove unsafe cladding. Last year a scheme was introduced that offered loans to residents of buildings between 11 and 18 metres in height that had unsafe cladding. This loan scheme is now being scrapped and developers have been told to foot the bill to fix all buildings over 11 metres, not just 18 metres.

The plan to be agreed by early March is for developers to:

• make financial contributions to a dedicated fund to cover the full outstanding cost of remediating unsafe cladding;

• fund and undertake all necessary remediation of buildings over 11 metres that they have played a role in developing; and

• provide comprehensive information on all buildings over 11 metres that have historic safety defects and that they have played a part in constructing in the last 30 years.

This will no doubt concern a number of leaseholders which in some cases own multiple properties and could be on the hook for significant sums.

Developers and contractors alike should refer back to their contracts to assess what impacts this may have on their contractual position and in particular what rights or remedies they may have in place to force or refute remedial works and what parties' respective liabilities will be.