Written by Ian Taylor, Solicitor at Spire Solicitors LLP Wymondham office.
Great! You’ve bought your new home and it has National House Building Council (NHBC) cover. But what does that really mean? What are the benefits and are there any disadvantages?
NHBC certificates are now provided with roughly 80% of new homes. There are other providers available, such as Zurich and Premier, offering very similar (but not identical) terms.
Before purchase your solicitor should check that the builder or developer is registered with NHBC (or equivalent provider). No warranty is available if it is not registered.
In general your builder is obliged to:-
- a) build the property in a good and workmanlike manner and of proper materials to ensure the home is fit for habitation;
- b) build in accordance with NHBC requirements; and
- c) remedy any defect during the two year initial guarantee period.
The NHBC will:-
- a) cover any loss due to the builder becoming bankrupt prior to completion;
- b) if the builder fails to repair a defect during the initial two year guarantee period the NHBC will make good any loss; and
- c) during the third to tenth years cover any loss in respect of physical damage caused by the builder’s failure to build specific parts of your house to NHBC requirements.
The most important thing to note is that the 10-Year warranty is not a comprehensive consumer guarantee: it is an insurance policy and subject to various limitations. It does not cover normal wear and tear, shrinkage, damage caused by normal drying out or condensation, or damage due to lack of maintenance. There must be damage to the home.
Like any insurance policy you are liable to pay something in the event of a claim. Under NHBC there is a minimum claim value instead of an excess, specified in section 3 of the policy document.
There is also a maximum claims limit, generally the purchase price of the home. Once the repairs have been completed your home will continue to be covered until the warranty expires but you and/or subsequent owners cannot claim again for the same defect.
Your builder may offer as a matter of contract to attend to snagging items following purchase. In law it is the builder who remains liable for any major building defects. However, most developer’s contracts of sale will limit their liability to defects within the scope of the NHBC cover only.