24 May 2019 by Amie Mackay

Defective New Home? What can you do?

Some of the leading home builders have recently been under scrutiny and investigation due to concerns regarding safety and poor quality.

Whilst home buyers are given the comfort of certification that their home will meet the legal standards laid down by Building Regulations, together with a new home (structural) guarantee, reports show that there has been an increase in complaints being made by home buyers for issues ranging from substandard ceilings to badly fitted fire doors, missing insulation, condensation and dampness.

The Homeowners Alliance has also reported an increase in the number of home buyers needing assistance over the last two years to remedy serious defects arising once they have taken ownership of their property. Research suggests that only two-thirds of new homeowners are happy with the way their builder resolved any defects.  The Home Builders Federation’s own satisfaction surveys show a rise in the number of customers reporting snags from 93% in 2015 to 99% in 2018.

As a result, The Home Owners Alliance is campaigning to boost the rights or protection for buyers and calling for a snagging retention.  This is an agreed sum that is held back by the buyer for an agreed period of time to either:-

  1. Cover the cost for the buyer to remedy any defective works (if these are not attended to by the developer within a reasonable period of time); or
  2. To incentivise the developer to attend to these remedial works in a timely manner to recover these funds that would have formed part of the sale price.

Home buyers should not be deterred from buying a new build property.  However, it is prudent to seek the best and most appropriate advice on the legal documentation and warranties available.  You should be seeking advice on the following:-

  • What do your purchase documents say about snagging or a retention? Is there a clause included within the contract to deal with this and are you aware of your rights and of any time limit on reporting such defect/snags?
  • Does the contract limit the developer’s liability for the quality of the build upon the production of the new home guarantee?
  • What new home guarantee is being provided to you? Are you aware of the terms of this and what is excluded, e.g. shrinkage and condensation? Is there a two year defect period or is this limited to only structural defects?
  • Are you aware of any after care service being made available to you, either by the developer or under your new home policy, and what (if any) dispute resolution service is available?
  • Are there any provisions within the contract that imply that the buyers have satisfied themselves with the state and condition of the property even before the property has been constructed?

Even for newly built properties, the legal position remains that the ‘buyer beware’ rule applies.  Home buyers should therefore still be encouraged (particularly for newly completed properties) to satisfy themselves of the condition of the property by way of a survey.  Should the property be purchased ‘off plan’, it is still advisable to obtain a survey before any defect period may expire to ensure any unknown defects are reported to the developer before then.

For more information about new home purchases or sales please contact Amie Mackay on 020 7288 4758 or at AmieMackay@boltburdon.co.uk.

You can also contact one of our other solicitors in the Residential Property team here.

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