Following the July 13, 2022 announcement by then-Housing Secretary Greg Clark that formal contracts to crystallize commitments made by 48 property developers under the Developer Pledge (the “Pledge”) were sent and would be signed within a month, the industry waited for a status update.
Following concerns raised by various developers about the terms of the Pledge Contracts and the subsequent rewording of the text, the Department for Leveling Up Housing and Communities (the “DLUHC“) said that this re-drafting process is nearing completion and he expects the developers to sign contracts”very soon”.
As part of the Pledge, the 48 developers (referred to as “Participating Developers”) is committed to remedying vital fire safety deficiencies in buildings over 11 meters that they have had a role in developing or refurbishing over the past three decades in England. Tenants and building owners have been eagerly awaiting an update on exactly when the “fully legally binding documentationreferred to in the Undertaking would be entered into to give effect to the principles and undertakings set forth therein. Our article here discusses the Undertaking in more detail.
The government announced in July 2022 that formal contracts to make legally binding commitments under the Pledge would be signed”in the month”. However, many participating developers pushed back against the proposed terms of these contracts, citing concerns that they could be held liable for costs beyond fixing vital fire safety defects and that the drafting provided the opportunity for DLUHC to reopen settlement terms later. line.
Schedule for signing pledge agreements
After a period of renegotiation between DLUHC advisers and the Federation of Home Builders to change the contents of the pledge agreements, the DLUHC has now announced that it expects participating developers to sign the pledge agreements “Very soon”. The DLUHC also stated that it “will not accept any backtracking” by Participating Developers in connection with their commitments under the Engagement.
With the DLUHC adopting a firm position on the timing of the completion of the ongoing negotiations, it is expected that the revised pledge agreements will be signed in the near future. The DLUHC’s position appears to be supported by a statement from the Federation of Home Builders which confirmed that it “continue to engage constructively to agree a contract that aligns with the commitments made in the engagement”.
While only time will tell what the timescale of “very soonwill rise in practice, tenants and owners of buildings under the Pledge hope that negotiations will be concluded quickly so that the appropriate financing arrangements can then be put in place to facilitate the completion of the necessary repair work. to vital fire safety defects in these buildings.