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Newly-built residential properties often have the benefit of new home warranties. The aim of these warranties is to protect buyers against construction defects. Although, the provision of new home warranties is not a legal requirement they are often provided on new build developments as most mortgage providers will insist on warranty cover being in place before financing a purchase.
Bringing legal action against a builder for construction defects is uncertain and can prove incredibly costly and time-consuming. These issues are exacerbated further if the builder has been wound up or is in financial difficulty. A new home warranty provides reassurance as there is an accessible avenue available to homeowners to rectify problems with the building.
To secure a new home warranty, the builder must satisfy certain technical standards of construction which are imposed by the warranty provider. Further, warranty providers often inspect properties to ensure compliance with the construction standards. This provides additional comfort to homebuyers that the end product is of a suitable quality.
New home warranties are available from several providers including:
- NHBC Buildmark;
- LABC Warranty;
- Premier Guarantee;
- Building Life Plans; and
- Checkmate Castle 10.
The terms of the warranties can vary between providers. It is important, therefore, that your solicitors review the policy carefully. The policy documents will also detail the exclusions and financial limits that apply to any claims. New home warranties can also include additional cover to protect against non-compliance with building regulations and contaminated land.
New home warranties, typically, provide that:
- from exchange of contracts to practical completion, it insures against the builder failing to build the property due to death, fraud or insolvency;
- during the first two years post-completion, the builder is responsible for rectifying any damage caused for failing to build the property properly; and
- during the subsequent years post-completion until expiry, the warranty provider is responsible for rectifying the structural defects or physical damage to the property.
The mechanism for bringing a claim under a new home warranty will depend heavily on the terms of the policy document and the period within which the defect manifests itself. Failure properly to commence a claim in strict adherence to the policy, particularly with regards to the giving of proper notice of the defect to the warranty provider, in accordance with the policy can bar the homeowner from rectification.
It is, therefore, extremely important to seek professional legal advice without delay if you know or suspect that your residential property has a construction defect.
To discuss these issues further or for more information on the range of legal services Myerson LLP can provide please call Myerson’s Construction Team on +44 (0)161 941 4000 or email lawyers@myerson.co.uk.