Buying a home has a lot riding on it. Financially, it is perhaps your most substantial investment that will shape your whole life. Emotionally, it promises much, from raising a family to a quiet retired life. So, it is paramount that you are treated fairly and justly by sellers to prevent any misinformation or malpractice from blighting your great home expectations. The consumer code requirements for homebuilders ensure total transparency. If you are buying a new build from a developer, it is time to know the ethical and responsible obligations you should be able to expect.
What is the consumer code?
The Consumer Code for Home Builders, developed by the home-building industry, makes the home-buying process fairer and more transparent for consumers. It helps you understand what levels of services to expect from your builder. You get to be fully informed about your purchase and know your consumer rights before and after you move in. In the unlikely event a problem arises regarding the home you bought, it guarantees a speedy dispute resolution free of charge.
The Consumer Code for Home Builders applies to builders registered with the UK’s most prominent new home warranty bodies. These are NHBC, Premier Guarantee, LABC Warranty, and Checkmate. Other codes may also apply, so check with your builder or warranty provider. You should have a copy of the relevant Code Scheme with your Reservation Agreement.
The Code includes;
- An Independent Dispute Resolution Scheme
- An independently Audited Compliance regime
- Authority to enable sanctions on builders, including excluding builders from home warranty schemes if they do not comply with the Code.
Why is it important for homebuilders to follow the consumer code?
It helps to protect the buyer from unscrupulous or deceitful practices by home builders. The Code contains mandatory good practice ethics that cover the marketing and selling of new homes as well as after-sales customer service.
It enables buyers to expect the following standards;
- Clear and truthful advertising and marketing
- Sufficient pre-purchase information that helps make informed decisions about their property purchases
- Home warranty and contract information
- Accurate timing of construction, completion, and handover
- After-sales services and complaints processing.
What are consumer code requirements?
1. Adopting the Code
1.1 Adopting the Code
Home Builders must comply with the requirements of the Consumer Code and have regard to good practice guidance.
1.2 Making the Code available
The logo of the Consumer Code for Home Builders should prominently display in the builder’s sales offices, those of appointed selling agents, and in sales brochures.
A copy of the Code should be made available with the Reservation Agreement to all buyers who reserve a home.
1.3 Customer service: before legal completion
The home builder needs to have suitable systems and procedures in place to ensure they can reliably and accurately meet the commitments on service, processes, and information in the Code.
1.4 Appropriately trained customer service staff
The home builder should train all staff dealing with buyers to carry out their responsibilities with due diligence to fulfill the Code.
1.5 Sales and advertising
All material and activities on sales and advertising by the company must be clear and truthful. They should not mislead the buyers at any given point.
2. Information – Pre-contract
2.1 Pre-purchase information
Builders should provide home buyers with sufficient information to help them make well-informed purchasing decisions.
This information must include;
- A written Reservation agreement
- An explanation of the Home Warranty cover;
- A description of any management services and organisations to which the buyer is committed and their estimated costs.
- The nature and method of assessment of any event fees, such as transfer fees or similar liabilities.
- Information on uncompleted homes and developments should carry,
- A brochure or plan illustrating the general layout, appearance, and plot position of the property
- A list of contents included in the home
- Building standards the home gets completed to
2.2 Contact information
The builder should give the buyer a clear idea about who they can enquire about the purchasing process or the property itself.
2.3 Warranty cover
The builder should furnish the buyer with accurate and reliable information regarding the insurance-backed warranty offered on the home.
2.4 Health and safety for visitors to developments under construction
Buyers must have prior information about health-and-safety precautions they need to undertake when visiting a development under construction.
2.5 Pre-contract information
Builders must advise home buyers to appoint a professional legal adviser to represent their interests when carrying out the legal formalities of buying the home.
2.6 Reservation
Builders should provide home buyers who reserve a home/plot with a Reservation agreement that sets out the terms of the reservation. These include but are not limited to:
- The Reservation fee
- What they are purchasing
- The full purchase price
- How and when the Reservation agreement will end
- The validity period of the price
- The nature and estimated cost of any management services the buyer must pay for
- The nature and method of assessment of any event fees, such as transfer fees or similar liabilities.
In the unlikely event the Reservation agreement gets canceled, the home buyer should have prior knowledge of any deductions from that fee if any.
While the Reservation agreement is in force, the Home Builder must not enter into a new Reservation agreement or sale agreement with another customer on the same Home.
3. Information – Exchange of contracts
3.1 The contract
The terms and conditions of the contract of sales and contract information must;
- Be stated clearly in writing and be fair to the buyer
- Comply with all relevant legislation
- Clearly state the contract termination rights of each party
3.2 Timing of construction, completion, and handover
The builder must provide the buyer with a realistic and reliable timeframe for building completion. It should include when construction of the home may finish, the date of Legal Completion, and the date for handover.
3.3 Contract termination rights
The builder should inform the home buyer of their right to terminate the contract.
3.4 Contract deposits and pre-payments
The home builder should explain in detail how the contract deposits are protected and how they deal with any other pre-payments.
4. Information – during occupation
4.1 After-sales service
There should be an accessible after-sale service by the builder for the home buyer. The builder should give details on the services provided, who to contact, and what warranties and insurance cover the home.
4.2 Health and safety for Home Buyers on developments under construction
If the buyer has to live in a development with continuing building work, the home builder must offer them health-and-safety precautions.
5. Complaints and disputes
5.1 Complaints handling
The home builder must have a system and procedures in place for receiving, handling, and resolving complaints by buyers.
The builder should inform the buyer that all dispute resolution arrangements are in writing.
5.2 Co-operation with professional advisers
The Home Builder must cooperate with appropriately qualified professional advisers appointed by the Home Buyer to resolve disputes.
Complaints about defects or damage caused by a breach of technical requirements made up to 2 years from the date of the Home Warranty Body’s insurance certificate are valid by the Code. An Independent Dispute Resolution Scheme is available for home buyers who believe their builder has failed to meet the requirements of the Code.
The trust placed in the builder of their beloved home by the buyer is sacred. Buyers should be able to rely on builders and developers to ensure their transition to their new home is smooth as possible. Builders, too, should take pride in their finished product. And whenever there’s a structural, technical, or legal issue that hampers the satisfaction of the buyer, there should be swift solutions to rectify it.
GS Brown Construction follows the consumer code for home builders to deliver high standards. Have you set your sights on any of our homes yet? Be assured of assistance throughout the buying process and reliable after-sales customer support when you choose us. Reserve your home before it’s too late.
