What are the Practical Issues flowing from the Developer Remediation Contract?

By Charlotte Barker

Head of Construction

Understandably, both building owners and developers will have concerns entering into a remediation contact. Building owners or leaseholders will push for their buildings to be remediated as soon as possible, however financial and resource constraints (discussed below) will dictate that all buildings cannot be remediated immediately.

Funding – Developers are required to remediate buildings notwithstanding whether they can recover the costs from the supply chain. They will need to find the money to remediate to ensure the longevity of their business. Developers may need to consider whether they require additional financing which would need to be factored into the timeframe for the remediation.

Resources – Additional resources, with appropriate skills and experience, will be required to deliver the obligations in the contract, particularly for larger developers with a number of buildings in scope.

Developers must ascertain whether they will fund the remediation works or deliver themselves. This may result with increased resources for project delivery teams but more scope for cost mitigation. There is likely to be an issue with the availability of fire engineers or fire safety assessors with appropriate experience to undertake the necessary fire safety assessments to a consistent standard.

Infrastructure and Management Systems – The government has imposed onerous reporting and audit obligations so developers will need to ensure they have the resources and systems in place to discharge those obligations. 

Building Safety Act and Contractual Claims – Developers may already be facing claims from building owners for buildings covered by the pledge, whether under the Defective Premises Act (the “DPA”) or contractual arrangements.

Recovery? Developers must consider recovery action against the supply chain in order to, potentially, recoup costs of undertaking remediation works under the contract. The involvement of the original contracting parties in remediation works may help mitigate costs. There may however be a shortfall between costs and recovery in light of the issues in relation to limitation, liability caps, insurance and parties no longer trading.

If you would like to discuss anything mentioned in this article, please call our specialist team of Construction Lawyers on 0345 646 0406 or fill in our online enquiry form and a member of our Team will be very happy to assist.