Warranties
Most new homes are covered by a 10 year warranty usually provided by either Zurich or NHBC. A building warranty is essentially a form of insurance policy paid for by the builder. The aim is that it protects the purchaser and their successors in title for a period of ten years against latent defects with their homes.
The first two years of your warranty are the responsibility of your developer and the following 8 years are the responsibility of your warranty provider. Remember, in years 3-10 the insurance company covers only structural defects. Therefore the purchasers have only 2 years to identify, report and have corrected any defects in their property. Once you have paid for your home any remedial work you have done must be paid for by the developer, so you may fight long and hard to remedial satisfaction!
NHBC
NHBC is the leading UK warranty provider, set up by the government in 1965, with a non-profit making mandate with a view to being the standard setting body and leading provider for new and newly converted homes in the UK. The NHBC policy applicable to private buyers of new build homes is known as ‘Buildmark’. This policy provides for the following:-
The NHBC will pay for the house to be completed if the house builder goes out of business. This is limited to £100,000 or 10% of the purchase price, whichever is the least.
In the first two years of the warranty period, snagging defects are covered, which currently exclude defects caused by normal drying out. If an NHBC registered builder does not deal with these defects within a reasonable time period then you can use the NHBC resolution service - this is generally a very slow process and in our opinion favours the developer and not the homeowner, however it is probably the best option available at the moment.
A 10 year warranty against structural defects, although this is primarily an insurance policy for the house builder.
The NHBC claims to have around 85% of new homes in the UK registered with them. Builders who register with them have to abide by a strict set of rules and build to the standards that the NHBC lay down.
Please note that an NHBC warranty does not mean that a new property will be free from defects or snags;
For further information contact NHBC at the address below or visit their website at www.nhbc.co.uk.
NHBC (National House-Building Council), Ash House, Dencore Business Park, Linford Wood, Milton Keynes MK14 6ET.
Tel: 0870 241430
Zurich
The policy for private buyers of new build properties is known as the ‘Standard 10’. Zurich is one of the worlds leading insurance brokers and a significant number of new properties are covered by one of their policies.
This stipulates that during the build period Zurich Insurance will repay the deposit of up to 10% of the value of the property if the house builder goes out of business.
In the first two years, the Developers Warranty Period (DWP), snagging defects are covered If the house builder does not deal with reported defects within a reasonable time period, the home owners can use the Zurich Building Guarantee resolution services. There is an £100 excess per item of £500 in total.
A 10 year Structural Insurance Policy (SIP) for the house builder covering structural damage caused by latent defects, although this is primarily an insurance policy for the house builder.
A word of warning, From our experience beware when buying a house with this type of warranty as the sales information appears to be very different from the information stipulated in the insurance policy.
Please note that a Zurich warranty does not mean that a new property will be free from defects or snags.
For further information contact Zurich at the address below or visit their website at www.zurich.co.uk/buildingguarantee/homeowners/introduction.htm or contact them at the address below:-
Zurich Building Guarantee, South wood Crescent, Farnborough, Hampshire GU14 ONL,
Tel: 0870 418050
Fax: 01252 372989.
The Premier Guarantee
Premier Guarantee is a relatively new warranty provider in the UK. This policy provides the following:-
The Premier Guarantee will pay up to 10% of the value of the property to repay any deposit or to complete the property if the housebuilder goes out of business whilst the property is being built.
In the first two years snagging defects are covered. If the house builder does not deal with reported defects within a reasonable time period, the owner can contact Premier, who will either arrange for the work to be carried out themselves or pay for the remedial work to be completed. There is an £100 excess for each and every cause of loss to a maximum of £500.
As with the NHBC and Zurich warranties there is a 10 year Structural Insurance Period, although this is primarily an insurance policy for the house builder.
Please note that a Premier Guarantee does not ensure that a new property will be free from defects or snags,
For further information contact Premier Guarantee at the address below or visit their website at www.premierguarantee.co.uk or contact them at the address below:-
The Premier Guarantee, Haymarket Court, Hinson Street, Birkenhead, Merseyside, CH41 5BX
Tel: 0151 650 4343, Fax¨0151 650 4344.
Architects Certificate
An Architects Certificate is not a warranty and should not be mistaken for one. You have less rights and protection than those with NHBC or Zurich warranties. The certificate is only there to assure the bank or building society that the building was checked at certain points during its construction. You may be able to claim against the architects liability insurance for any structural problems, however any issues over quality leaves the purchaser with no where to seek compensation.
Also, note that there is no protection in case the builder goes out of business during the build period.
It is not advisable to buy a property without a warranty provided by the NHBC, Premier or Zurich.
One last word of advice …………….all New Home warranties are just insurance policies and everyone knows how insurance companies hate to part with their money – however you are much better to have one than to not!
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