This article focuses on new build properties in England and Wales.
Purchasing a new build property is often seen as an attractive option for buyers as the buyer is offered modern designs, energy efficiency and reassurance that everything in the building is “brand new”. However, new build homes are not immune to defects, issues in construction or delays. Many homeowners are alarmed to discover problems shortly after moving in, where problems can range from minor faults to serious structural issues. This raises an important question for buyers: “Can you claim compensation on a new build when the required standards haven’t been met?”
What is a new build property?
Within law, a new build property refers to a home which has never been lived in before and has been recently constructed or is still under construction. The term ‘new build’ includes properties which have not been lived in since their initial construction and the term additionally includes those that have been redeveloped. The legal framework which encompasses new builds often includes warranties, contracts, and planning regulations.
Warranties and legal protections
New build properties are typically sold with a structural warranty which aims to protect buyers against defects which arise after the property is completed. Common warranty providers include the NHBC, LABC and Premier Guarantee. The warranties listed typically last for a period of ten years; however, the extent of protection is dependent on when the defect is discovered.
Usually, during the first two years after completion, the developer is responsible for remedying any defects or issues reported by the homeowner. This is often noted as the developer’s liability period. From the years three to ten, the warranty provider may cover major structural defects, which could include foundation issues, load bearing walls or roof. Additionally, buyers are protected under contract law, in which developers are legally required to build the property in accordance with the plans, specifications and standard which have been previously agreed within the contract.
Can you claim?
Yes, you can claim compensation for new build defects. Compensation can cover a range of issues which includes (but is not limited to), structural defects, poor workmanship, missing features, defective materials, and draining.
Furthermore, you can claim if the building was not built as promised. For example, if the layout, size, or specific features do not match the plan nor the contract. Moreover, delays (where the property wasn’t completed by the agreed date which resulted in extra costs) and a breach of contract (where the developer failed to meet what was agreed) can amount to a claim.
Who is liable?
Typically, developers are liable for building defects, especially in the initial years following the completion of the building. Liability will also depend on the nature of the defect, terms of the contract and if a warranty is in place. If the defect has arisen within the developer’s liability period, they will usually be required to carry out the necessary repairs.
However, there are various legal protections available to buyers, which includes contractual remedies and warranty covers. These protections can only be exercised if the buyer has acted within strict time limits. Failure to report defects promptly or delaying legal action may result in limitation or even prevent a claim altogether.
How does compensation work?
Compensation for new build defects will depend on the circumstance which has arisen. For instance, in some situations, the most suitable remedy may involve the developer to repair the problem/damage at their own expense. This ensures that defects can be rectified without a significant amount of disruption.
Alternatively, damages may be awarded in the form of a monetary award to cover the cost of repairs that the homeowner has paid for. In the instances where the defect has reduced the value of the property, a price reduction may be awarded to reflect the loss. The buyer may also be entitled to a reimbursement for any further costs which were incurred as a result of the delay, such as a temporary accommodation.
It is important to highlight that not all issues will give rise to compensation. Minor cosmetic defects, general wear and tear and damages caused by the homeowner may not be covered. As a result, each claim must be assessed on its own specific facts.
How to make a claim?
If a defect is able to be identified, homeowners should promptly report each defect to the developer as soon as possible in writing. Many homeowners hire professional inspectors shortly after the completion to identify defects which are difficult to initially see. By keeping a clear record of defects including photographs, inspection reports and invoices are imperative.
If the developer fails to comply with remedial work within a reasonable time, then the homeowner may escalate the issue to the warranty provider or alternatively seek legal aid. In some instances, mediation may be available before pushing for a case against the developer.
Conclusion
To conclude, it is possible to claim compensation on a new build where defects delays or breaches of contract have occurred. Buyers additionally benefit from a range of legal protections which includes warranties/ contractual rights; however, these are subject to strict time limits and conditions. Methods such as acting promptly, keeping a clear record, and seeking legal advice where necessary, can ensure homeowners, are able to enforce their rights and help obtain appropriate compensation.
