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How to 'return' a faulty new home

How to 'return' a faulty new home
How to 'return' a faulty new home

Buying a home is a challenging business at the best of times. You’ll need cash for a deposit, solicitors’ fees, money to cover moving costs, and probably a mortgage fee too.

As a result of a number of Governmnent schemes and developer incentives, many people opt to buy a new build - buyoed by the belief that the homes won't require any additional money in improvements or repairs.  

These purchases might initially seem better value for money, but they aren't without problems. In 2011, Which? surveyed 200 homeowners who’d bought a new build and found that more than half had experienced problems.

Many of those surveyed suggested that the builder had rushed the end stages because they wanted to complete the sale more quickly.

Of course, some issues with new builds are small and easily resolved. However, there are people who have had almost unbelievable problems with their new homes and online discussion groups are filled with horror storries.

For example, one new home buyer bought their property having viewed a show home but had a shock when they finally walked through their own front door. “When I finally got to go into the house, all of the interior walls were in the wrong place. Hard to believe, but true. They tried to deny it but had to concede in the end as they were nearly a metre out.”

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So what can be done when a new built property fails to come up to the standard expected?

We asked Norman Beckman, a property partner at law firm, DWFM Beckman what rights a buyer has to demand action from the builder. His mantra is simple: “It all depends on the contract.” And that, he urges, makes it essential that buyers have watertight contracts that will protect them if delays or defects cause friction.

“It depends on the contract as to how long you have to demand defects are repaired: some give you six months, others 12 months. Of course, you may still be able to claim for defects under the NHBC or similar warranty schemes,” he explains.

Many buyers may feel unable to pull out of a sale after they’ve exchanged, but Beckman says that a good solicitor (one who doesn’t treat contracts like “identical sacks of potatoes”) will have included protections to cater for things going wrong before completion.

“If the property is damaged, say by some insured risk, and there is a long-stop date in the contract you don’t have to complete if the damage has not been rectified by that long-stop date”

But after completion, can you hand a flawed property back? Beckman believes this would be a very rare event, commenting: “If the builder is in breach of the contract then you would be entitled to compensation. If it is a fundamental breach and the property is uninhabitable then you should be able to hand it back but I have never heard of that happening. But, again, it depends on the terms of the contract.”

Smaller snags

Most home builders will encourage buyers to draw up a ‘gripe sheet’ or ‘snag list’ once the property is complete. This can be a great way to quickly resolve small issues with a property, such as poorly painted walls or broken fittings.

The sooner you raise your complaints, the faster they can be resolved. You can hire professionals to come and fill out your snag list, however, there’s plenty of advice online to help you do a thorough job yourself.

Many websites charge the price of a book for their snagging guide; however, you can access this one by for a small donation.

What can you do?

What if you have a complaint about your newly built property but the homebuilder is refusing to budge? Going to court can seem an off-putting option, but there is an alternative.

It is very likely that your new home will be registered with a home warranty body, such as NHBC, Premier Guarantee or LABC. If you are confident that your builder has breached the Consumer Code for Home Builders, you can raise a complaint with the dedicated adjudication scheme via your warranty provider.

You should do this within three months of the builder’s final response and within the first two years of the warranty.

Read more about the code and find the right contact information for your home warranty provider via the dedicated website.

Your complaint will then be considered by the panel, which will come to a decision. That decision isn’t binding so if you don’t accept it, you can still go to court.

How much compensation could you claim?

There can be so much emotional investment involved in buying a house, that if something goes wrong it can feel devastating. So you might expect that a homebuilder would be required to pay compensation for the heartache you’ve gone through.

However, the pay-outs that are made are rarely headline-grabbing. There’s a maximum of £15,000 compensation and homeowners are encouraged to claim simply for the cost of repairing an issue and for the any reasonable expenses.

Recent case summaries included a homeowner who requested £15,000 compensation as she had been misled about the costs of the service charge. The adjudicator awarded her £2,703.60 as this was the additional cost over five years, rather than the 25 years she was demanding.

Have you bought a new build home? What was your experience? Is it inevitable there will be some issues? Have your say using the comments below.

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