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Home buyers urged to use new powers

Anyone looking to buy a new-build property should make sure they are aware of the protection they are entitled to by the Consumer Code for Home Builders urges Helen Murphy, a legal executive specialising in residential conveyancing at Barr Ellison Solicitors.

According to Helen, this code has made positive changes to the way in which developers sell new build properties but buyers are not always aware of its existence. “As the economy battles its way out of recession, new-build development sites are once again starting to sprout up around the county”, says Helen. “In times past, purchasers have often been faced with a waiting game for their property to be finished by a developer, with no control over when the property is completed. The Code is a voluntary code for house builders to sign up to but for those builders and developers who are members of the National House Building Council (NHBC) and similar home warranty schemes, adoption of the Code is a condition of their membership to the warranty scheme.”

The main thrust of the Code is to ensure that buyers are treated fairly and to improve the information provided to buyers both at the time of reservation of a new property and throughout the purchase process, as Helen explains: “Where the Code is most useful is in terms of completion. Previously, when a buyer had exchanged contracts with a developer for the purchase of a property that had yet to be fully constructed the developer had been in control when it came to completion of that transaction and there was little a buyer could do about this without risking loss of their deposit. I have known buyers wait for several months to complete their purchase, but with the Code if when contracts are exchanged the property is watertight, legal completion must take place within two months if the property is a house, or within four months if it is a flat. If the property is not watertight at the time of exchange the deadlines are six months and 12 months respectively. If the property is not complete by the deadline a buyer has the right to withdraw from their contract. This at least gives buyers a more certain indication as to timescales for completion.”

The Code also includes the right for a buyer to reclaim their reservation fee if they choose not to proceed with the purchase (although the developer is entitled to deduct reasonable administration costs from the reservation fee) and the provision for any proposed changes following exchange that would significantly affect the value of the property to be agreed in writing.

Helen can be contacted on 01223 417200

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