NHBC legal obligations?

PJLoyd

New Member
I purchased a new house some years ago and used the dispute resolution service to try and conclude the matter. The Developer simply ignored the reports issued and I ended up going to court.
I won in the end after putting up over £20,000 in legal and Engineers costs.

Unfortunately I am now in the position of after having purchased a house 7 years old that I have established has not been built in accordance with the design. The NHBC have stated that it is not covered as no damage has occurred. The fact that you can rock the floors apparently does not matter.

The NHBC were the building control on the development.

As I understand it if the NHBC were the building control then they have a legal obligation to ensure that the property is constructed in accordance with the design and subsequently the building regulations.

Does anyone have any views on this?
 

SteveF

New Member
Warranty cover where Building Control by NHBC

Hi PJLoyd

If you check Section 4 of the Buildmark Warranty you will see what cover is provided.

Additional Cover in years 3 to 10 if NHBC's subsidiary did the building control;
NHBC Will Pay For
"Repairs needed where there is a present or imminent danger to the physical health and safety of the occupants of the home, because the home does not comply with the requirements of the Building Regulations that applied to the work at the time of construction or conversion in relation to the following;"

I think the relevant point for your consideration is "where there is a present or imminent danger to the physical health and safety"

The point that i think you are trying to make in regards to the NHBC responsibilities or "legal obligation" is a mute one. In my opinion a court will come down on the side of what the insurance or warranty provides for rather than looking to consider if the NHBC have done their job correctly.

If anyone has any legal view on this i would be pleased to hear it.

SteveF
 
A warranty or not?

I have several legal extracts of various relevance to this.
mmmm? How can they be posted?

But to the case in hand:
NHBC are blinkered.
The designer should have overseen his design holistically.

NHBC see & report what suits them.

I have a case where roof tie down straps are provided. But not secured.
Roof has moved.
Significant Structural problems.

NHBC currently have ommitted even the basic work of this defect.
 

Shaun Heath

New Member
Legal Obligations

Hi

Submitting a claim to NHBC can be very time consuming and you not only need to prove fault but you also need to make sure you have followed the correct procedures.

The first point of your letter states that you used the 'Dispute Resolution Service'. For a claim to be valid under this you needed to have contacted the builder about this problem within the first 2 years. It requires a defect to be present but no damage needs to have occurred. The builder is obliged to fix this.

You then state that the NHBC will not cover the claim as no damage occurred. This would indicate that NHBC are considering it under the Section 3 of the policy. This requires there to be a defect and damage. The damage also needs to be to the extent stated in the policy. For instance you can have cracks in the building that are due to movement in the ground but it will not be covered if it is not considered 'Major Damage.' NHBC are obliged to fix or cover the costs of fixing the defect and resultant damage.

In respect of Building Control, NHBC would not normally accept a claim under Section 4 of the policy which covers the Building Control aspect, but cover it under Section 3 or offer ex-gratis assistance, otherwise it can affect their building control licence. NHBC do not have any legal obligations to ensure that the property is constructed in accordance with the design but there is cover under the policy for certain aspects of the Building Regulations.

What you need to do is first show under what part of the NHBC policy you are claiming as the evidence of proof is different and NHBC's obligations are different and the process of complaint are different. You then need to provide the evidence to show that the criteria is met to make the claim.

Therefore make sure you follow the correct procedure and understand what you are claiming for is covered under that procedure. Otherwise you will spend a lot of time, money and cause yourself anguish in chasing something you have no chance of winning even if there is a problem and others tell you are right.

Shaun
 

Snaggedout

New Member
For a claim to be successful under the NHBC policy (and similar policies such as Premier Guarantee) you do not have to prove there is a defect or negligent construction. If the home is outside the first two years of the warranty it is NHBC's job to investigate and determine whether the home was built in accordance with their standards and building regulations and if their is any damage. If you disagree with their decision you can appeal to the Financial Ombudsman Service.

Building control bodies, both local authorities and private Approved Inspectors, check the work built satisfies the building regulations. It may not be built in accordance with the design but it will still have to meet the regulations.
 

NewHomeExpert

Well-Known Member
It would be unusual if a breach of NHBC standards did not result in a defect or if a defect was not a result of NHBC standards not being followed.

The important thing is to make sure you report everything in writing to the house builder in the first instance. Keep copies as you may need them if you make a claim to the NHBC.

Like all insurers, the NHBC would want to avoid having to pay a claim if they can. After all it will be the house builder that caused the problem -not the warranty provider.
 

Snaggedout

New Member
No problem with the advice to put things on writing. It's just common sense and avoids arguments at a later date.

You just have to have particular view on life if you think that all insurers set out to dodge claims. It's not my experience. Yes I've had claims turned down but I've learnt that cheap cover is usually cheap for a reason - it doesn't cover much.

As for the new home warranty providers, if there are swathes of unhappy claimants why aren't they hammering at the the door of the Financial Ombudsman Service? It causes insurers much hassle to have to justify why they turned a claim and costs them a case fee as well. He gets sheds loads of complaints about general insurers and banks. How many complaints went to the FOS last year about new home warranties? And how many were valid? Answers will fit on a postage stamp.
 

NewHomeExpert

Well-Known Member
Insurers like to minimise the claim they payout. It is in their interest. If this was not the case then Claims Adjusters would be out of business!

Regarding unhappy customers, they want their homes put right, not a long drawn out financial compensation battle. I agree I have never heard of anyone complaining to the Financial ombudsman yet, but hey let's just suggest it now:

TO EVERYONE WHO HAS A PROBLEM WITH THE NHBC NOT SETTLING A CLAIM FOR NEW HOME DEFECTS - FILE A COMPLAINT TO THE FINANCIAL OMBUDSMAN.
 

Snaggedout

New Member
Anyone who has had a claim turned down by an insurer is already told they can appeal to the FOS, it's in their decision letter.
 

NewHomeExpert

Well-Known Member
I realise this, but I doubt many home owners would recognise the NHBC warranty as an financial or insurance product for that matter.

The common misconception (wrongly) is that it is a "Guarantee" .
 

m fuerst

New Member
Disgruntled Developer

I work for a company which developed a block of flats with NHBC cover and a NHBC builder. The builder went bust after completion and we could not sell the flats due to the state of the market. We accepted the Buildmark cover as owner and have tried to make a claim because the roof of the building is leaking in several places. They don't want to talk to us because we were the Registered Developer. But it was the builder who messed up ! Why shouldn't we be able to resort to the insurance we paid for ??
 

NewHomeExpert

Well-Known Member
The NHBC are quite right.

Put it like this, would the NHBC pay a builder for work a sub contractor who worked for them did if he went bust?

You should have registered the development in using the builder's NHBC registration, not your own.

I think the reason you used your registration may have been that the Buildmark cover would have been much higher using the builder's registration.
You tried to save a few ££££s and it has back-fired.
 

m fuerst

New Member
"Put it like this, would the NHBC pay a builder for work a sub contractor who worked for them did if he went bust?"

The builder is out of the picture after 2 years anyway and it is more than 3 years since the building was completed. This is insurance and we paid NHBC handsomely for it and relied on their inspector to help make sure the building was built right ! There is a big difference between the relationship between and Contractor and sub contractor and a builder and developer. The sub contractor who botched up the roof has not contractual obligation to us, only to the builder who employed him who is no longer there.

"You should have registered the development in using the builder's NHBC registration, not your own."

I was advised that this was not an option at the time. This is a quote off of NHBC website "Only Builders and Developers who are on the NHBC Register can sell homes with the NHBC Buildmark range of cover." We owned the land and employed the builder and other proffessionals. Due to the downturn in the market we could not sell the flats so we let them and registered the buildmark warranties for each flat in our own name as instructed by NHBC.

If you work for an automobile company, even on the assembly line or head office, does that mean you are not entitled to a warranty on a car from that company ?? We are just property investors, we did not have anything to do with the technical side of things. We employed a "competent" builder who had NHBC status and were actually considered to be outstanding by NHBC themselves having won several awardds for other projects they had built.

"I think the reason you used your registration may have been that the Buildmark cover would have been much higher using the builder's registration.
You tried to save a few ££££s and it has back-fired.[/QUOTE]"

Sounds a bit like you have an axe to grind. We only registered for this project and the work is under both of our registrations as a registered developer must use a registered builder. I am not sure how a developer could use NHBC to build a block of flats without becoming registered. We also had to stay registered for the first two years with annual dues of £1,500 just so we could have the benefit of passing the buildmark cover on to potential purchasers.
 

NewHomeExpert

Well-Known Member
No one forced you to use the NHBC as a new home warranty provider.
This was your choice.

You made an error in not using your builder to register the new homes for Buildmark cover.
If you had done so the NHBC would pick up the tab for any defects after your builder ceased trading.

You clearly do not know much about building development.
You should not rely on just the NHBC stage inspections to "make sure the building was built right"
Professional developers who actually do know what they are doing, do get involved with the "technical side" as you put it. They also employ professionals such as Clerk of Works or Project Managers to oversee every aspect of the project.

Finally after two years, the NHBC warranty only covers structural defects. A leaking roof would be classed as a maintenance issue, if as you say it is three years since the building was completed.

You are an investor, your investment has gone south and you are looking for someone to blame.
The NHBC is right.
 
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m fuerst

New Member
What axe are you grinding ?

"No one forced you to use the NHBC as a new home warranty provider.
This was your choice." It's suicide to build today without NHBC as homeowners can't get mortgages without it.

"You made an error in not using your builder to register the new homes for Buildmark cover." This is what I was advised to do by the NHBC reps who I talked to at the time. I was told this was our only option and it was not a cost savings as you suggest.
"If you had done so the NHBC would pick up the tab for any defects after your builder ceased trading." From what I have seen elsewhere on this blog I am not convinced of that

"You clearly do not know much about building development." Everyone has to start somewhere
"You should not rely on just the NHBC stage inspections to "make sure the building was built right"
Professional developers who actually do know what they are doing, do get involved with the "technical side" as you put it. They also employ professionals such as Clerk of Works or Project Managers to oversee every aspect of the project." You assume a lot ! We did have a professional PM, EA as well as a QS and the project was monitored by Architects ( AEW who design all of the McDonalds in the country as well as other projects ) as well as structural and m&e engineers. Since then we have gone on to build 3 small shopping strips for blue chip tenants as well as a 115 Bed Travelodge.

"Finally after two years, the NHBC warranty only covers structural defects. A leaking roof would be classed as a maintenance issue, if as you say it is three years since the building was completed." The roof is a "shed" type commercial roof with a sanofil membrane and one would like to think should have more than a 2 year warranty

"You are an investor, your investment has gone south and you are looking for someone to blame." My investment is fully let and tenants are paying good rent for it. However, We paid the premiums for a buildmark warranty to benefit the occupants of the flats. Now that we happen to be the legal occupants why should we not benefit from the cover ? Simples

"The NHBC is right.
" You clearly don't like developers do you.
 

NewHomeExpert

Well-Known Member
" You clearly don't like developers do you.

It is not a question of who I like or don't like.
You are wrong to blame the NHBC for mistakes you have made through your own naivety and inexperience.
Sarah Beeney, lovely as she is, has a lot to answer for!
 

Silver

New Member
There are many other warranty providers to the housebuilding fraternity, smaller more customer focused with more inspections provided during the build with more technical advice given to the builder(s) to put things right in each of the build stages. Unfortunately, the NHBC have become too complacent and too big to care!!!!
 

NewHomeExpert

Well-Known Member
Silver, with respect you don't know what you are talking about!

The NHBC are a big warranty provider and have been around for 75 years.

Many other smaller warranty companies like Zurich for example, have come and gone, unable to provide either the service to builders and house buyers or even break even as a business.

I would want to know that my new home warranty provider had a long history and would not cease to be before the warranty expired.

If a house builder is not giving an NHBC warranty, it should serve as a warning to anyone buying a home from them.
 
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