New Build Conveyancing

In a Nutshell, What’s the New Build Conveyancing Process?

The new build conveyancing process can have many twists and turns. But, in a nutshell, this is the standard process that is followed:

• Find a new build development and choose a property
• Reserve your home with a reservation fee
• Time to talk to a trusted conveyancer
• Get your paperwork organised and agree to a mortgage
• Wait for the property to be completed
• Once it’s ready, a completion date can be agreed
• Complete the purchase and move in!
• Check for snags (defects or inconsistencies with the original plan)

What Does the Conveyancer Do?

The role of a conveyancing lawyer is to oversee the legal aspects of your property purchase. Whether you’re buying a new build (in this case) or selling a residential or agricultural property, conveyancers take over once you’ve had an offer accepted, preparing all of the necessary documents to ensure your purchase completes smoothly.

How Long Does the New Build Conveyancing Process Take?

New build purchases come with more complex conveyancing as there are more risk factors involved. However, a good conveyancer should be able to organise a ‘long-stop’ completion date where the developer must agree to have the build finished and ready to hand over.

For new builds, completion usually takes place 10 working days after the developer has finished the building work and the property has been approved as structurally safe.

Plans, Layouts, Finishes & Specifications

While most new build homes are designed and built exactly as planned, it’s important to check that everything is in order prior to completion. If this is your first home, you may also want advice on Help to Buy conveyancing, which we recommend seeking right away. These are Government-backed schemes that are designed to help first-time buyers get onto the property ladder.

Other schemes that are available when buying new builds include deposit unlock, shared ownership and first-time buyer schemes.

If you’re buying ‘off plan’, you will need to check that the property you intend to move into is the same as the one shown on the contract and transfer. This includes things like the position of the property’s boundaries, parking spaces, driveways, paths, and fences.

It’s important to check any contract or transfer plan we send you very carefully.

Any problems with the plan can be raised with your builder directly. If you tell us what was agreed, we can then confirm this with the builder’s solicitors.

If you think anything might be wrong with your contract or you are unsure about anything, you should speak to us about your new build conveyancing needs.

Once the Property Is Complete

Once your home has been built, and you are able to move in, you should check the property carefully against the specifications you originally reserved to make sure it includes everything you expected.

Builders sometimes make changes without telling anyone or even make mistakes.

It’s important to keep in mind that the standard sale contract usually gives builders the right to make minor variations to the boundaries, fences, internal layouts, structure, external appearance, decorative finishes, boilers, bathroom and kitchen equipment, etc.

Depending on your contract, you may also have to accept and complete the purchase of your new home despite the existence of minor defects.

There is no obligation on the builder’s part to complete the estate as initially planned. They may, for example, get planning permission to substitute smaller or larger houses. So, while your house should be as planned, the estate itself might turn out a little differently.

You may end up living on what is effectively a building site for a long time, which is something you should consider.

New Build Home Warranties Explained

Virtually all new homes are sold with a 10 year warranty, either from NHBC, Premier Guarantee, or another provider.

What’s included in the warranties?

• Any deposit paid on an exchange of contracts is protected if the builder becomes insolvent.
• The builder gives a limited two year guarantee that the property meets ‘NHBC requirements’. If there are defects, you have to claim against the builder, and enforce the terms of any guarantee through the courts (or a mediation scheme) yourself.
  NHBC or other warranty providers will not generally get involved until you have exhausted this stage, or the builder becomes insolvent. This is not part of our conveyancing service either.
• From years three to 10 your warranty provider should guarantee protection for a limited range of structural defects (e.g. foundations, walls, staircases, retaining walls, double glazing, below ground drainage).
  This does NOT cover boundary problems, title conflicts, shrinking, cracking, electrical defects, problems with kitchen or bathroom fittings, or minor snagging issues.

What’s Not Included in the Warranties?

Warranties do not provide a guarantee that items such as furnishings and fittings will be defect-free. There is also no cover for what is called ‘consequential losses’, such as hotel bills if you have to move out for a time.

What Is Snagging?

When you move into your property, it’s advised that you create a ‘snagging list’, which is a list of any defects that you spot. You can also have the property surveyed or employ an expert to check for any snags.

Although your lender will check that the house is complete to some extent, this will not be a detailed inspection, and you cannot rely on the lender’s inspection to pick up all the problems.

Completion on Notice

There is often no fixed completion date in your contract, and you will get a minimum of 10 days’ notice from the builder that the house is complete. The builder is also generally not responsible for any delays.

With an off-plan property purchase, you can negotiate a ‘long-stop’ completion date with the builder. This entitles you to compensation if the build isn’t completed by the agreed date.

If you have a linked sale that needs to be completed simultaneously with your purchase, you should discuss the possibility of a completion on notice with your buyer. If they do not agree to this, then you may have to move into temporary accommodation after you have sold your current property until the new one is ready.

You must consider and accept this risk before deciding to proceed with the purchase of any new-build house.

Mortgages for New Build Homes

If you are buying a home that is in the process of being built, your mortgage offer may be issued ‘subject to final inspection’.

You will need to exchange contracts first, and when the property is finished, the lender will send in their surveyor to confirm that the property has been completed before they will release the mortgage money to us.

If the surveyor is not satisfied for any reason, you may not be able to complete the purchase, but you would be in breach of contract with the builder. This means you could possibly lose your deposit or even be sued for any other losses the builder has incurred. Unfortunately, this is a risk that cannot be avoided if you are buying a property that has not yet been built.

The deadline for the exchange of contracts is usually four weeks from the receipt of draft documents by us, or from the date your offer is accepted.

However, it’s important to keep in mind that lenders often take longer than this to issue mortgage offers. Also, if you have a chain below you, it can be quite difficult to achieve an exchange on your related sale that quickly.

Estate Road Adoption as ‘Public Highway’ & Drainage

Occasionally, estate roads are not taken over by the highway authority, meaning they are unadopted. This means any potholes or cracks will not be repaired.

If drainage systems are also unadopted, the costs may fall on you to fix any problems with them, and you might have to try and recover these costs from the builder.

Rarely will your new-home warranty cover these problems, and if the roads fall into poor condition, it may be more difficult to sell the property.

Top Tip: To protect you from these scenarios, your conveyancer can ensure there is a clause in your purchase contract requiring the builder to do what is necessary to ensure the roads and drains become adopted.

However, if the builder fails to do this, you (and all the other house owners) might ultimately have to take the builder to court to enforce this obligation in the contract. If this becomes necessary, you will need to contact a litigation solicitor for advice.

If your house is situated near a flood prevention landscape, we recommend checking who is responsible for maintaining it. Otherwise, the maintenance work may not be done and the plots may flood.

Planning Permission & Service Connections

The planning permission for your new house will usually have conditions that the local authority can enforce against you as the new owner. We will send you a copy of the conditions before the exchange of contracts. However, it may be difficult for us to check this because we do not see a copy of the original planning application or visit the property.

If the property has been completed, you must check that all the conditions have been met before exchanging contracts.

The builder will have made arrangements for electricity, telecommunications, and sometimes gas, to be installed but not necessarily connected. You may have to pay for the connection, and you must check this before exchanging contracts.

The Consumer Code for Home Builders

The Consumer Code for Home Builders was developed by the homebuilding industry to make the home buying process fairer and more transparent for buyers.

The code is designed to help you understand what levels of service to expect from your 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, low cost dispute resolution scheme is available to deal with complaints about breaches of the code.

However, most of the code deals with pre-sale issues and marketing rather than defects in the property.

Suggestions & Advice

Feel free to contact our team for new build conveyancing advice over the phone.

In terms of advice we can provide now, we suggest two things:

• Put a clause in your purchase contract that requires your builder to do what is necessary to guarantee the local water company and highway authority adopt the roads and drains on your new build property estate. This ensures that you don’t fall victim to flooding damage or potholes. Don’t settle for title insurance because it prevents you from making a claim against road or water damage!
• Avoid agreeing to a conditional exchange with your builder. A conditional exchange tends to be up to interpretation and can lead to more disagreements than it’s worth.

New Build Conveyancing Fees

Get your new build conveyancing sorted at PDR Property Lawyers. Get an instant quote today. We are here to help with all of your new build conveyancing enquiries.