The Code’s pre-sale and handover Requirements apply to Home Buyers who are the first purchasers of a home. Second or subsequent Home Buyers benefit from the Code Requirements but only on after-sales matters they report within two years from the date of the Home Warranty Body’s insurance certificate.
Who is not covered by the Code?
The Code and the Independent Dispute Resolution Scheme do not apply to:
second-hand properties (for example, properties taken by Home Builders in part exchange and re-sold);
properties acquired by registered social landlords for rent;
properties acquired by corporate bodies, partnerships and individuals buying more than one property on the same development for investment purposes;
properties built by self-builders for their own occupation;
properties assigned or sub-sold by an investor to a third person before Legal Completion;
personal injury claims;
loss of property value or blight;
claims about the land conveyed and its registered title;
claims that exceed the Independent Dispute Resolution Scheme’s limits.
Download the Consumer Code Requirements and Good Practice Guidance for House Builders leaflet by clicking here.
The Consumer Code for Home Builders (“the Code”), which came into effect in April 2010, applies to all Home Builders registered with the UK’s main new Home Warranty Bodies: NHBC; Premier Guarantee; LABC Warranty and Checkmate and consists of 19 Requirements and principles that Home Builders must meet in their marketing and selling of Homes and their after-sales customer service.
The Code gives protection and rights to purchasers of new Homes. It requires all new Home Buyers are treated fairly and are fully informed about their purchase before and after they sign the contract.
The Code is an industry led code of conduct for Home Builders, which was developed to make the home buying process fairer and more transparent for purchasers.
The aim of the Code is for all new Home Buyers to:
be treated fairly,
know what levels of service to expect,
to be given reliable information about their purchase and their consumer rights before and after they move in, and
know how to access a speedy, free dispute resolution arrangements to deal with complaints about breaches of the Code
The Code reinforces best practice among Home Builders to encourage a consistently high level of information and customer service. It builds on successful efforts already made by the industry to improve consumer satisfaction in recent years.
The Code covers every stage of the home-buying process – pre-contract, exchange of contract and during occupation.
Stage 1 – Helping buyers pre-purchase
As a Home Buyer you should be given enough pre-purchase information to help you make a suitably informed purchasing decision.
In all cases this information must include:
a written Reservation agreement including the reservation fee; what is being sold; the purchase price; how and when the Reservation agreement will end and how long the price remains valid;
an explanation of the Home Warranty cover;
a description of any management services and organisations to which you as the Home Buyer will be committed and an estimate of their cost;
the nature and method of assessment of any event fees such as transfer fees or similar liabilities.
If your home is not yet completed (for example when buying off plan), the information must include:
a brochure or plan illustrating the general layout, appearance and plot position of the home;
a list of the home’s contents;
the standards to which the home is being built.
Stage 2 – Helping buyers during purchase
Exchanging contracts is an exciting time but can be daunting. The Code provides additional protection as you exchange contracts.
Exchange of Contract
The Home Builder must provide you with a contract which is clear and fair, complies with all relevant legislation and clearly explains your contract termination rights.
The Code also states that you must be given reliable and realistic information about when construction of your home may be finished, the date of Legal Completion, and the date for handover of your home.
If an unreasonable delay occurs in completing the home, you have the right not to go ahead with the purchase and have your Reservation fee returned without deductions.
Your Home Builder must clearly explain how contract deposits are protected and how any other pre-payments are dealt with.
Stage 3 – Helping buyers after occupation
You’ve completed and moved in – what next? In the last of our three videos looking at different aspects of the Code, we highlight the support you can expect after you’ve moved in, including after sales care and complaints handling.
Home Builders must provide an accessible after-sale service, and explain what the service includes, who to contact, and what guarantees and warranties apply to your home.
If you move into a home where building work is still in progress on surrounding properties, you must be told about the health-and-safety precautions you should take when living on a development where building work continues.
Your Home Builder must have procedures for receiving, handling, and resolving service calls and complaints from you and any other purchasers. You should be informed by your Home Builder about these procedures, and of the dispute resolution arrangements operated as part of the Code, in writing.
Who is covered by the Code?
The Consumer Code applies to Home Buyers who reserve to buy a new or newly converted home built by a Home Builder under the insurance protection of one of the supporting Home Warranty Bodies.