Lendlease signs remediation contract but expects ‘pursuit’ of other parties

Lendlease has signed the government’s remediation contract following “detailed consideration” by its board.

The contractor was one of 11 firms that failed to sign up to the government’s contract by last Monday’s deadline (13 March). Housing secretary Michael Gove warned last week that any firms that did not sign the remediation contract would be barred from beginning new housebuilding projects or getting building-control for work which was already underway.

However, Lendlease said it had now signed the contract, weeks after it announced a £114m provision for buildings safety provisions, most of which was “inherited through our purchase of Crosby Homes [in 2005]”. Lendlease added at the time that it intended to “maximise third-party recoveries” from its subcontractors.

Construction News understands that while Lendlease has accepted liability for buildings it develops – or that were developed by companies it has acquired – it is also expecting the government to “pursue” other parties within the construction supply chain for contributions towards remediation work.

Gove announced last week that he would do more to pursue freeholders and developers based in foreign countries and construction-product manufacturers to make them pay.

CN also understands that Lendlease has yet to receive any specific claims for remediation, despite its provision. The provision mostly covers work on 56 buildings, though Lendlease has said it no longer owns these properties.

Gove said last week that the initial commitments to the contract, which was signed by 39 developers in total, would mean at least 1,100 buildings will be fixed via £2bn-worth of funding.

Lendlease is one of four developers to have signed the contract since then. Ballymore, Telford Homes and London Square also signed after the deadline.

A spokesperson for Lendlease said: “As a responsible global developer and investor we’ve always maintained that leaseholders shouldn’t be held liable for remediation costs and advocated for an industry-wide solution encompassing all of the supply chain.

“We recently announced a £114m provision to pay for remediation on affected buildings, most of which were inherited through our purchase of Crosby Homes in 2005, and have set up a dedicated team which is working with building owners to assess and resolve these issues.

“Our board met this week and confirmed the company has signed up to the UK Government’s developer remediation contract. This decision follows a thorough and diligent corporate governance process to ensure it has been given the detailed consideration it deserves in the context of our global business.”