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Are Warranties on new homes a complete protection for homebuyers?

If you have just bought a new house or flat, or one that has been built within the last few years, and you discover some defects, what can you do? Anyone buying a new-build house or flat should check with their Conveyancing Solicitor that the property will have the benefit of a warranty on completion, or that a surveyor’s certificate will be issued.

Most new-build houses now come with a warranty, such as those currently issued by the National House-Building Council (NHBC), Premier Guarantee and LABC. Your Conveyancing Solicitor will check that the developer will provide a warranty when the building is completed. If you are not the first buyer, your solicitor should obtain the warranty documents on completion, and arrange for the benefit to be transferred to you.

The issue of defects with new-build properties has been a problem for many years. Often defects do not become apparent until long after the house had been occupied. It would often be difficult to take legal action against the original builder, and impossible if the builder had ceased trading. So it would appear that the warranties should offer valuable protection to buyers.

But buyers should be aware that such warranties do not constitute a complete guarantee by the builder, rather they are insurance policies which will provide cover in certain circumstances. They do not cover every defect that might be discovered, or every consequential loss that a home owner might suffer because of a defect. Buyers should ask their Conveyancing Solicitors for further advice, and the websites of the companies which issue these guarantees also contain more information.

Builders are liable to carry out works to remedy damage and defects which arise within the first two years after completion, but thereafter the cover is limited to essentially the structural parts of the property. If the Builder will not carry out necessary works, or has ceased trading, the warranties provide cover so that work can be carried out by another contractor. They also provide arrangements for arbitration in the event of any dispute.

The NHBC operates a minimum claim value rather than a policy excess for its Buildmark warranties.   This means that if your claim will cost more than the minimum claim value stated in your policy, they will pay your claim in full. You will need to check this minimum claim value which can be done with the NHBC.

Some builders do not provide warranties for new homes which they build, especially when they build small non-estate developments. In that case the buyers’ Conveyancing Solicitors should insist that a certificate is issued by a qualified surveyor, in accordance with the requirements of the Council of Mortgage Lenders. The certificate will confirm that the surveyor has inspected the property during construction, and that it has been constructed to a satisfactory standard and in accordance with the plans and specifications. The surveyor must give details of his professional indemnity insurance. This Certificate will enable the buyer and subsequent owners to sue the surveyor if defects arise during the first six years after completion.

If you have a problem with a newly-built property, you should contact the Conveyancing Solicitors who acted when you bought the house for further advice. If they have not sent you the warranty documents, you will need to ask them for these. They can also give advice on pursuing a claim should that become necessary.

Call our team on 0800 038 6446 if you are experiencing a problem with your property and require advice from a Fridaysmove -approved Solicitor.

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