Your consumer rights when buying a new build

Do you know your consumer rights when buying a new build home?

We didn’t know much about this until after our first purchase fell through and the developer initially refused to return our £3k reservation deposit back and we were researching what we could do to get the money back. I wish I knew about my consumer rights earlier!

It turns out some developers abide by a consumer code. There are more than one so it is worth checking if they are registered with one and if so, which one.

For the flat we bought, our warranty provider is the National House Building Council (NHBC).  Home builders registered under NHBC must comply with the Consumer Code for Home Builders. According to HomeOwners Alliance, the NHBC new home warranty covers 80% of the new build market. 

Please note, for the rest of the article, when I refer to the code, it will be referring to the Consumer Code for Home Builders.

Why is the code important?

The code is designed to give protection and rights for people who buy new build properties.

According to the website for the Consumer Code for Home Builders:

‘The Code is designed to help you understand what levels of service to expect from your Home Builder, feel fully informed about your purchase and know your consumer rights before and after you move in. In the unlikely event that problems arise, a speedy, free dispute resolution scheme is available to deal with complaints about breaches of the Code.

The Code contains Requirements that all Home Builders who register homes with the UK’s main new Home Warranty Bodies: NHBC; Premier Guarantee; LABC Warranty and Checkmate must comply with. These warranty bodies represent over 95% of the new homes built in the UK.’

You can find a copy of the Code here. 

When should the home builder provide you with a copy of the code?

They should provide a copy of the code to you along with the Reservation agreement. It is worth reading it before you fill in the reservation agreement.

What’s in the code?

The code has different sections which relate to different parts of the home buying process:

·      Pre-contract

·      Exchanging contracts

·      During occupation

·      Complaints and disputes

I have highlighted some points from the code that I thought might be of interest:

Pre-contract:

• It states a list of information that must be included to the home buyer to help them make an informed decision, which includes a written reservation agreement, description of any management services and organisations (including an estimate of their costs) that the purchaser will be committed to and a list of the home’s contents.

•  It also includes a list of terms that the reservation form must include.

• The Reservation fee must be reimbursed if the Reservation agreement is cancelled. The Home Buyer must be told of any deductions that may be made.

Exchanging Contracts:

• Terms and conditions of the contract must be clear and fair, comply with legislation and clearly state contract termination rights.

• The developer must provide reliable and realistic information on the timing of completion and handover.

During occupation:

• The developer must explain what the after sales service includes, the contact details and what guarantees and warranties apply.

Complaints and disputes:

• The developer must have a system and procedures in place for dealing with complaints and service calls from the purchaser.

There is also a section on the Consumer Code’s independent dispute resolution scheme.

Other sources of information about consumer rights when buying a new build home

I found this useful article from Which? on what your rights are if your new build home has issues.

I recently came across this helpful guide by HomeOwners Alliance and King’s College London on Buying a new home: Your rights explained.

It’s definitely worth a read as it has some great tips, talks about your rights under legislation, options for resolving a dispute with the developer and even what to check in the warranty information.

I mentioned new home warranties earlier in the post and if you are unfamiliar about warranties like I was, here is a useful article from HomeOwners Alliance about new home warranties and what they do and don’t cover. 

Jess