New Build Inspector
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What do new build warranties cover?
Once the property is built, the warranty is split into two periods:- the defects insurance period, which covers the first two years and,
- the structural insurance period which is for 10 years from when you complete on your purchase.
Defects insurance period
During your first two years in the home, if there are issues with the work the builder has done, such as the windows letting in rain because they’re not sealed properly or the heating not working because the pipes are faulty, the builder is obliged to come and fix them.For more advice, see fixing problems with your new build home.
Structural insurance period
During the structural insurance period years 3-10, the builder is only responsible for major problems with the structure of the house. This includes foundations, the external render, roofs, ceilings, chimneys and load-bearing parts of the floors.Smaller ‘defects’ are now your own responsibility. This includes non-structural defects such as problems with your gutters or fixtures and fittings.
It’s important you are clear on when your warranty kicks in. Make a note of when the initial two year period expires and keep an up to date snagging list.
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What new home warranties don’t cover?
Understandably, natural wear and tear isn’t covered by a new home warranty. Neither is weather damage or any problems resulting from you not maintaining your home adequately.Damp and condensation may be covered but only if they have occurred as a result of the builder’s failure to comply with the warranty provider’s standards (in other words, if it’s the builder’s fault!).
Be careful of the small print – ‘A’ Rated vs Unrated
As all warranty providers are acting on behalf of insurers, they may not always be as willing to carry out (and pay for) remedial work. As is always the case with insurance, the small print is key. Make sure you read all of the warranty documentation and question anything that doesn’t seem quite right.Insurance providers are rated according to their financial stability and ability to honour their claims. As a structural warranty is for 10 years, it is even more important to know the rating of your insurer. You should only use ‘A’ rated or higher.
In 2018, the popular but unrated insurer Alpha, went into liquidation, leaving thousands of customers without valid warranties. This meant they were in breach of their mortgage terms as well as finding it difficult and expensive to get a replacement warranty. Several unrated insurers are now offering new build warranties so it’s essential to check the rating of the insurer that is backing your warranty.
You can find the rating of an insurer on the websites of the main rating agencies, A.M Best, Fitch, Moody’s and S&P.
What do I do if I spot a defect?
Make sure you contact the builder as soon as possible. Keep a record of all communication including dates and times of telephone calls. This will be needed if there are problems with getting your builder to address the issue.It is also important to not wait and let a defect get worse. You could be in breach of the warranty or result in an unsuccessful claim if you spot a defect and let it get worse and cause more damage. This is because the problem could have been resolved earlier at less cost and damage to the property.
What if the builder won’t honour the warranty?
The various consumer codes (Consumer Code for Home Builders, the Consumer Code for New Homes, the Consumer Code for Builders of Homes for Sale) are there to ensure consumers are protected from undesirable trading practices when buying a newly built home. All of the codes offer a dispute resolution scheme which you can use during the first two years if the builder won’t carry out the necessary remedial work.If that’s not confusing enough, there is now a New Homes Quality Code which is overseen by a voluntary New Homes Ombudsman. Since it’s launch in 2022, some developers now operate under the New Homes Quality Code, and this trend is set to grow. Until government decides to use its powers to appoint a statutory ombudsman and code, the reality will mean that these various Codes are here to stay.
Remember, the builder will only be liable for problems detailed in the contract. We’d always advise buyers to make sure there is a “snagging” provision to allow you to get little issues sorted – such as doors catching on carpets – directly with the developer.
What to do if you are unhappy with the response of your warranty provider?
If you are unhappy with how your warranty provider has handled your case, you can complain to the Financial Ombudsman Service. But first you must make a formal complaint to your warranty provider.What happens to a new build warranty when you move?
If you sell your home, the warranty transfers to the buyer of your home. Any work you do on the home yourself – such as loft conversions or conservatories – will not be covered by the warranty. If you are buying a new home from a previous owner, it’s also worth noting that company warranties supplied for such works are not always transferable. If the seller installed a conservatory with a ten year guarantee from the installation firm, when they sell the house to you, the guarantee often becomes invalid.My warranty provider went bust. What do I do?
This is a tricky situation. You could try to see if you have any protection under the Financial Services Compensation Scheme and/or contact another home warranty company to see if they would be prepared to take on the liability. Although you will need to pay for this and the longer you wait the less likely the new provider will take the property on because of the riskFind a Snagging Inspector
with our partners at www.newbuildinspections.com
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