- 1 What are New Build Homes?
- 2 Plans, Layouts, Finishes and Specifications
- 2.1 Once the Property is Complete
- 3 New Build Home Warranties
- 4 What is Snagging?
- 5 Floating Completion Dates
- 6 Mortgages for New Build Homes
- 7 Estate Road Adoption & Drainage
- 8 Planning Permission & Service Connections
- 9 Consumer Code for Home Builders
- 10 Suggestions and Advice
- 11 Get an Instant Quotation
What are New Build Homes?
We know from experience that new property conveyancing can be complex, so allow us to walk you through everything you need to know before committing to a new build home.
In today’s housing market, a new-build home refers to a property situated on a new build development. New Build property buyers can buy these houses before they’ve been built, and agree to a sale based on plans. You can also buy a completed new build.
Listed below are some of the key things our expert property lawyers advise you to consider when thinking about buying a new build home.
Plans, Layouts, Finishes, and Specifications
While most new build homes are designed and built exactly as planned, it’s important to check everything is in order before exchanging contracts. If this is your first home, you may also need advice surrounding Help to Buy conveyancing, which we recommend seeking straight away.
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.
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 specification 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 bear 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 with 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
The warranty has three sections:
- Any deposit paid on exchange of contracts is protected if the builder becomes insolvent.
- The builder gives a limited 2 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.*
- From years 3 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).**
Please Note: Neither warranties provide a guarantee that items such as finishings 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.
*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.
**This does NOT cover boundary problems, title conflicts, shrinking, cracking, electrical defects, problems with kitchen or bathroom fittings, or minor snagging issues.
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.
Floating Completion Dates
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.
Therefore, if you have a linked sale, that needs to be completed simultaneously with your purchase, you should discuss the possibility of a floating completion date 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 will 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 which the builder has incurred. Unfortunately, this is a risk that cannot be avoided if you are buying a property that has not been built yet.
The deadline for the exchange of contracts is usually 4 weeks from receipt of draft documents by us, or from the date your offer is accepted.
However, it’s important to bear 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 this quickly.
Estate Road Adoption as ‘public highway’ and 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 in due course the roads are in poor condition it may be more difficult to sell the property.
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 that, 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 complied with before exchanging contracts.
The builder will have made arrangements for electricity, telecoms (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. You can find it at: www.consumercode.co.uk.
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-sales issues and marketing rather than defects in the property.
Suggestions & Advice
In terms of advice, we really 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.
Enjoy personal new build conveyancing at PDR Property Lawyers starting from just £399 plus VAT and disbursements. Get an instant quote and discuss your new build property goals and enjoy regular updates by phone and/or in writing today!