Bedford Solicitor explains the benefit of an NHBC warranty

When Conveyancing for a property built within the last 10 years, the buyer’s Conveyancing Solicitor had to check that the property enjoyed the benefit of a 10-year warranty issued by the NHBC. Mary Spiteri was acting for Mr and Mrs S, who were buying a freehold house on Brabazon Close, Shortstown, Bedford, MK42 for approximately £210, 000. The property was on a modern development by Wimpey Homes, and had been built about six years previously.

The agents for this sale were the Yourmove Bedford branch, 38 Allhallows, Bedford MK40 1LN. A draft contract and copy of the land registry title was then received from the  Conveyancing Solicitors acting for the sellers, Messrs Tustain Jones and Co. The title documents confirmed that the house had been sold to the sellers in 2004, and so should have had the benefit of an NHBC warranty.

The National House-Building Council (NHBC) is a leading provider of warranties on new-build houses. It provides a system of inspections, and now often also carries out Building Control inspections on behalf of local councils to ensure that properties are constructed in accordance with building regulations. The NHBC Buildmark Cover is a ten year insurance policy divided into four main parts:

  1. Cover before completion
  2. The first 2 years
  3. Cover in years 3 to 10
  4. Additional cover in years 3 to 10 where NHBC's subsidiary carried out the building control

For the first 2 years, Buildmark covers against any physical damage to the home caused by a defect which results from the builder failing to meet NHBC Standards.

From years 3 to 10 Buildmark covers against the cost of putting right any physical damage to the home caused by a defect in any one of the specified parts of the building, including foundations, load-bearing walls, partition walls, roofs, and ceilings, but not items such as gutters, central heating, internal plaster finishes, fixtures and fittings etc. . Nor does it cover against any claim that is insured elsewhere, or by a household insurance policy ( e.g. storm damage to roof tiles).

The Council of Mortgage Lenders, to which the majority of mortgage lenders belong, now requires all new-build houses to have a warranty issued either by the NHBC or one of the insurance companies who provide warranties. Therefore it is essential for all new buyers to receive such a warranty as otherwise they will be unlikely to obtain a mortgage.

These warranties are transferable to subsequent buyers, so when acting for buyers, Conveyancing Solicitors must ensure that the NHBC warranty is transferred to their client at completion, to ensure that their client will have the benefit of the warranty. Unfortunately, many original buyers lose the warranty, or their Solicitors do not hand it over after it has been issued. This means that, when the house is sold, time has to be spent finding the certificate, or obtaining a duplicate from the NHBC.

On checking the title and the sellers’ replies to the property information form, Mary found that she had to raise a number of questions, including asking for confirmation that the original warranty certificate would be handed over on completion. The usual local search was carried out with Bedford Borough Council, which confirmed that the estate roads had now been taken over by the Council. It also contained details of the planning consents for the construction of the estate, and an agreement which the developers had entered into with the Council. In view of the age of the property Mary also had to ask the sellers’ Conveyancing Solicitors for copies of the planning permission.

One other point which Mary noted was that although the title was registered in the joint names of the sellers, the wife’s maiden name was still on the register and it had not been amended after they had got married. She therefore had to ask the sellers’ Solicitors to provide a copy of their clients’ marriage certificate as evidence of the change of name, since this would be required by the land registry.

The Solicitors were eventually able to provide Mary with copies of all these documents, and confirm that the original NHBC warranty would be handed over on completion. She was then able to provide the buyers with a full report on title, and contracts were signed. Once a completion date had been agreed between all the parties in the chain of transactions, contracts were exchanged and completion took place on the agreed date.

After completion Mary arranged for a notice of the transfer of the warranty to be sent to the NHBC, so that her client would continue to benefit from it. The clients thanked Mary for all her help on their purchase, and were grateful for all the care and attention she had given during this example of thorough Conveyancing. Get an instant Conveyancing Quote here, or call us on 0330 660 0286.