Welsh Government's Developer Pact
Following constructive discussions with the Welsh Government and consistent with the approach we announced in February 2021, Persimmon has signed the Welsh Government’s Developer Pact, which is set out below.
We (the developer) agree with the principle that leaseholders should not have to pay for any costs associated with life-critical fire-safety remediation work arising from the design, construction or refurbishment of the building they live in; we want to work constructively and in good faith with you (the Welsh Government) and building owners/responsible parties, in order to achieve this.
On the basis of the Agreed Principles set out in the schedule to this Pact, we are therefore pleased to confirm that we will take responsibility for performing (or otherwise at our discretion funding and/or procuring) remediation and/or mitigation works to address life-critical fire-safety defects on all our residential buildings in Wales which are 11 metres and over in height that we have developed or refurbished (other than solely as a contractor) (“our Buildings”).
We will work closely with you to establish an approach for determining the nature and scope of remediation and/or mitigation works that is proportionate and consistent. This process will take into account learning over time and will inform what is required to remediate and/or mitigate life-critical fire-safety defects, on the basis of the Agreed Principles (as set out below).
Recognising the need to finalise these arrangements without delay , and carrying out the remediation work to our Buildings, we are committed to working at pace with you to get everything in place to make this happen. We want leaseholders and tenants to be assured that their building will be made safe from life-critical fire-safety defects as quickly as is reasonably possible, and that they will not need to pay the costs of these remediation works. We confirm that we will work rapidly and in good faith with officials in the Welsh Government over the coming months to agree the necessary formal legal documentation that reflects the Agreed Principles.
We will publish this Pact, together with the Agreed Principles, on our website as soon as this Pact is dated so that leaseholders are aware of our public commitments. We are happy for the same documents to be published on the Welsh Government website or any other publishing or media platform.
Additionally, for any of our Buildings which have already been identified by us as falling within the scope of the Agreed Principles, within one month of the date of this Pact, we will deliver to you a proposal (including a proposed schedule listing the buildings identified) for contacting the relevant building owners/responsible parties and leaseholders to confirm that their building is covered by this Pact (and the Agreed Principles) and detailing the next steps that we will take to meet your objectives. For any other buildings that are in scope of the Agreed Principles and are subsequently identified by or to us, we will agree a process with you to ensure prompt communication with relevant building owners/responsible parties and leaseholders as required.
Subject to contract and formal legal documentation
The following principles are agreed between the Welsh Government and each Participant Developer (as defined below) in relation to the performance of remediation and/or mitigation works (or the funding and/or procurement of such works) to address life-critical fire-safety defects on all relevant residential buildings of a height of 11 metres and over in Wales.
The Welsh Government and each Participant Developer intend to enter into formal legal documentation in the coming months to give effect to the Agreed Principles set out below.
Remediation and/or mitigation work
In these Agreed Principles, the following terms will have the meaning given to them below:
Means each developer that has played a role in the development or refurbishment of Buildings (as defined below).
All residential buildings in Wales of 11 metres and over in height that: (i) require remediation and/or mitigation work to address life-critical fire-safety defects; and (ii) have been built or refurbished in the 30 years prior to 5 April 2022 by a Participant Developer in Wales.
Building height is to be measured in accordance with The Building Regulations 2010, Approved Document B (for use in Wales), Appendix C.
Subject to the terms of the formal legal documentation to be effected, each Participant Developer will commit to fund and undertake or, procure at its own cost (which may include rights of recovery through the National House Building Council or its equivalent or any relevant insurance policy), and as quickly as reasonably possible, all necessary remediation and/or mitigation work to address life-critical fire-safety defects (subject to building owner and planning consent).
Such work will be proportionate and limited to addressing life-critical fire-safety defects arising from design, construction or refurbishment defects on Buildings which the relevant Participant Developer played a role in developing or refurbishing (as applicable). This includes situations where design and construction at the time were compliant with building regulations.
The Obligation excludes situations where life-critical fire-safety defects have arisen solely as a result of: (i) any post-completion failure to maintain the Building following completion of construction or refurbishment by the Participant Developer (as the case may be), and provided always that the Participant Developer has no ongoing obligations in relation to the repair or maintenance of such construction or refurbishment works, or (ii) alterations to the Building that were not undertaken or procured by the Participant Developer.
Where a Participant Developer:
the Participant Developer will have no further liability for those works pursuant to this Pact and Agreed Principles, provided that the conditions on which the Participant Developer will be released from its liability for the relevant works in accordance with the first bullet point above will be set out in the formal legal documentation.
The Obligation extends to all Buildings the Participant Developer has developed or refurbished, whether on its own behalf or on behalf of others (including in relation to development for registered providers under section 106 of the Town and Country Planning Act 1990). However, it excludes work carried out solely as a contractor (where the nature of the profit is contract rather than development profit).
The scope of works (or level of funding) will not require to cover any betterment or improvement work which goes beyond that required for life-critical fire-safety defects, other than:
Buildings will be assessed and remediated proportionately to the following standards:
The Welsh Government will work with each Participant Developer, and where appropriate, the relevant Fire and Rescue Service and local authority to agree the means of auditing and assuring this standard.
Each Participant Developer will commit to demonstrate that it has either provided funding for or carried out remediation and/or mitigation works in accordance with the Standard as quickly as is reasonably possible. The Welsh Government will work with each Participant Developer, to agree a mechanism for each Participant Developer to demonstrate on an ongoing basis that such funding or remediation and/or mitigation work is being progressed as quickly as reasonably possible. Such mechanism will be set out in the formal legal documentation to be put in place between each Participant Developer and the Welsh Government, or as otherwise agreed between them from time to time.
Duty to inform:
The formal legal documentation will contain provisions requiring Participant Developers to report periodically to the Welsh Government on:
The accuracy and completeness of such information will be subject to periodic, formal attestation by the directors of the relevant Participant Developer (on the basis of their best information, knowledge and belief having made reasonable enquiries).
Each Participant Developer commits to:
Audit and verification:
The formal legal documentation will contain appropriate and reasonable audit and verification provisions to ensure that:
Nothing in the Pact or the Agreed Principles shall be construed as an admission of liability on the part of the Participant Developer.
Additionally, the formal legal documentation will make it clear that:
The Welsh Government will work with each Participant Developer, to agree an independent and fair mechanism in the formal legal documentation for resolving disputes arising between Participant Developers and, for example, managing agents, building owners/responsible parties, leaseholders, lenders and/or insurers in relation to any remediation and/or mitigation works, and the Participant Developers will endeavour to ensure that such processes are reflected in their arrangements with the relevant managing agents, building owners/responsible parties, leaseholders, lenders and/or insurers (as the case may be).
The formal legal documentation will contain provisions relating to, amongst other things:
We Persimmon Homes have read and agree to this Pact