How to fix problems in a new build home
New homes hold the promise of worry-free home-ownership. Unfortunately, that's not always how it turns out. We take a look at how to fix problems in a new build home.
Problems in a new build home
Since 2005, on the instigation of the government, the House Builders Federation (HBF) and NHBC – the new homes warranty scheme – have commissioned an annual survey on satisfaction with new homes. In 2017/ 2018, it was reported that 86% of buyers were satisfied overall with the quality of their new home and 87% would recommend their builder. Less flattering is that one third (34%) of buyers said their new home had more problems than they had been expecting. The survey also revealed that 42% said they had reported more than 10 problems to their builder and more than a quarter (26%) said they had reported in excess of 16 problems. This reflects a worsening trend since 2015.
Many buyers realise only too late that while a property is likely to be the most expensive thing they ever buy it is one of the least-protected by consumer law. With most goods, be it a cabbage or a toaster, you have the right to reject them and demand your money back if they fail to live up to expectations. Property, however, is exempt from the Sale and Supply of Goods Act, with the result homebuyers are stuck with faulty properties.
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What can you do about problems in a new build home?
If your home is less than 10 years old – even if you are not the first owner – it is almost certainly covered by a warranty. Home-builders would struggle to sell a property without a warranty, as mortgage-lenders usually insist on this. In 80% of cases this will be the Buildmark policy provided by NHBC. Other policies include BLP, LABC, Premier Guarantee and Checkmate. Most of these policies work on the same principle:
- During the first two years, the policy covers most defects, except for matters of wear and tear and minor defects such as plaster drying cracks. During this period you should contact your builder directly in the first instance. If your builder is no longer in business, however, you should contact NHBC.
- In years 3-10, the policy will only cover major defects, such as structural or weatherproofing problems. During this period the minor defects are excluded – anything which would cost less than £1500 to fix, in the case of the NHBC
- From year 11 onwards you will have to rely on your own insurance policy
You should also be aware that policies, such as the NHBC’s, may not cover all design and construction problems – for these, your only option may be to sue under the builder’s contract.
Before the initial two year period expires, you should give your home a thorough going-over and write a final report of any outstanding problems to your builder.
One option is to employ a surveyor to undertake a ‘snagging survey’ to list defects which need attention and send copies to you and your builder. The advantage of using a professional firm is that it is likely to spot more defects than homeowners would typically report themselves. Given the number of complaints and calls for help we get from visitors to our website, we have teamed up with one of the best known snagging inspectors in the UK, New Build Inspections. Unlike many other snagging companies, they never work for developers or builders so can retain their independence. Their prices start from £299. At its best, a snagging survey will help apply pressure on a builder to sort out defects
Even armed with a professional snagging report, there is no guarantee that your builder will take any notice of problems during the first two years. If your builder does not respond satisfactorily your next move should be to escalate your complaint to the NHBC – or other warranty provider – directly and as soon as possible.
You will fare better if:
- You make sure you keep records of all communication including copies of all letters, emails etc. Even if your builder is available on site and is generally amenable to face-to-face requests, it is a good idea to correspond by letter or email from time to time to make sure there is a record
- You can demonstrate you have pursued the matter with your builder exhaustively before approaching your warranty-provider (though keep in mind the two and ten year warranty periods)
- You haven’t tried to fix the problem yourself, which your warranty-provider may consider to have invalidated your warranty
- You have an independent expert confirming the problems, such as a snagging survey inspection report
- At all times, you have taken an approach of polite persistence, not anger or abuse (no matter how difficult this may be)
If you don’t receive any satisfaction from your warranty provider you could:
- Complain internally to NHBC or other warranty provider – make sure you follow their complaints procedure
- Make a claim about the warranty provider to the Financial Ombudsman Service (this has the advantage of being free, but it could exclude you from being able to make a court claim. The FOS is also not specialised in the area of new homes as it mostly deals with financial services rather than new homes insurance)
- The warranty provider may suggest that you try alternative dispute resolution (mediation) as a cheaper alternative to court action
- Issue a claim in court – but you will need to be aware of the strict time limits of bringing a court case and will need a lawyer who is specialised in new homes claims
- You could also contact an organisation called the Consumer Code for Homebuilders. All homes with a warranty issued by NHBC and Premier are covered by the code. (BLP and other providers have their own similar Codes). The body has a dispute resolution service which can make awards to homebuyers of up to £15,000. It doesn’t, however, seem to handle many complaints. In 2013, it considered just 22 of them, nine of which were rejected and three of which were withdrawn before adjudication. Just nine succeeded in part and not a single claim succeeded in full. Homebuyers using the service claimed a total of £133,845, but only £26,512 was awarded to homebuyers
If you are still unsatisfied with your builder’s response after contacting your warranty provider you can either take a legal route – which is certain to be expensive – or you could also consider some form of direct action in an attempt to shame your builder into taking your complaints seriously. Homebuyers have, for example:
- Contacted the press – though some local newspapers are reliant on advertising from developers and may not want to upset them
- Hung banners from their home, visible from the sales centre, with such slogans as: “Don’t buy a home here until you have spoken to me”
- Set up websites and Twitter accounts to advertise the problems to potential buyers. You should take great care, however, not to make statements which are libellous and could result in legal action against you. You must stick to the facts. A simple tweet with a photograph of the problem, with a tag saying “still waiting for this to be fixed in my new home”, and naming the developer, could be as effective as anything.
Before pushing the nuclear button, however, you should be aware:
- You could be upsetting your new neighbours and lowering the value of your new home. Content can hang around on the internet for years – even if the problems are resolved
- When you come to sell you will be asked by the buyer’s solicitor to fill in a form disclosing any disputes you have had connected with your property
Never fail to apply a common sense test. For small problems, such as badly-painted walls or minor cracks, it might be better to give up pursuing your builder, get out a paint brush or some filler and sort out the problem yourself, rather than spend time and energy fighting your builder – even if it leaves you dissatisfied with the service you had expected.
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