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Invitation to voluntarily support building rehabilitation work extended to the Building Products Association – Real Estate and Construction

UK: Invitation to voluntarily support building repair work extended to the Construction Products Association

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Earlier in January 2022, we reported on a “staked” announcement by MP Michael Gove, Secretary of State for the Department for Leveling, Housing and Communities (DLUHC), whereby residential developers were asked to voluntarily contribute to a £4billion fund to cover the costs of rehabilitating buildings with fire safety issues.

While this announcement received cautious support from across the political spectrum, many commentators have questioned whether the burden of bearing repair costs should necessarily fall entirely on residential developers, or whether building material manufacturers cladding and insulation could or should bear some of the blame.

Window of opportunity for the residential real estate development sector

With wording strongly reminiscent of the offer made to residential property developers, Mr Gove on January 22, 2022 wrote to the Construction Products Association to offer “a window of opportunity by March” for the sector to work with the DLUHC to “agree on a settlement that will restore confidence and ensure an appropriate contribution from the sector”.

In particular, it appears that Mr. Gove envisions the settlement including a commitment to:

  1. Make financial contributions in this year and subsequent years in the same manner as required of residential developers; and
  2. Provide “full information” on all buildings over 11m with fire safety defects to which individual companies have supplied products or services.

While it could be said that Mr. Gove’s previous letter to residential developers sought to be quite collaborative in nature, there is a change in tone in the letter to the building products industry with regard to the ” stick” if the industry does not respond. Indeed, the letter threatens:

  1. Using a regulatory framework to prevent any ‘guilty’ companies from operating and selling products in the UK in the future; and
  2. Prosecute individuals and companies responsible for construction defects who “don’t want to do the right thing now”.

The letter concludes, ominously, that “there is no future for businesses and administrators who are not fully committed to keeping residents safe and righting past wrongs.”

Comment

While the sentiment of the message to sue the manufacturers will most likely be widely welcomed by affected tenants and the construction industry, there may well be practical difficulties in implementing the sanctions threatened by Mr Gove.

For example, a certain product may have been properly tested and approved for use in a certain construction. However, if this product was subsequently used in a different construction, not reflecting the tested and approved construction, the product may not be considered to meet the safety requirements. At this point, would it be fair to tarnish the product as “hazardous” and under that last letter, particularly if a manufacturer may have little or no influence over how and where its products are used? products?

Of course, these are all very specific problems and it is inherently difficult to find a single approach. However, while the intent to raise funds from as wide a network as possible will most likely be welcomed, as noted at the end of our previous alert, we expect that “the devil will continue to be in the detail“.

Read the original article on GowlingWLG.com

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