What is The Consumer Code for Home Builders, and why is it important for private individuals?

7 September, 2017

Are you thinking of purchasing a newly-built home? Then you must familiarise yourself with The Consumer Code for Home Builders (the Code).

The Code is an industry-pioneered scheme that ensures the purchasers of new homes are treated fairly and transparently, and ultimately make their purchase decisions fully informed at every stage of the transaction.

These requirements must be complied with by all home builders who wish to register their homes with the main New Home Warranty Bodies; NHBC, Premier Guarantee and LABC Warranty.

As private individuals it is extremely important that you are aware of the benefits this scheme provides. It is perhaps easiest to demonstrate this through the key stages of the conveyancing process.

Pre-contract

At this stage, you must be provided with sufficient information to ensure you can make a well reasoned and informed purchase decision. This will include things such as a clear written reservation agreement (which basically reserves the property at a set price, on set terms and for a defined period), an explanation of the Home Warranty cover (as above, this will be one of NHBC, Premier Guarantee and LABC), a description of any management services or organisations to which you will be committed and a clear and concise breakdown of any ‘event fees’, a fee that is paid on the happening of an ‘event’, such as a transfer fee.

Exchange of contracts

The Code ensures that the terms and conditions must be clear and fair and in compliance with all relevant existing legislation, as well as clearly setting out your contract termination rights. The Code also ensures that you are provided with reliable and realistic information as to practical completion of your new home, the date for legal completion and the handover date for your new home.

Completion and during occupation

The Code compulsorily obligates the home builder to provide you with an accessible after-sale service, and to explain what this service will cover, who to contact and the guarantees and warranties that apply to your new home.  You will also be provided with comprehensive health and safety information where developments are on-going around your property.

The Code also ensures that the home builder provides you with details of the systems, procedures and arrangements in place for receiving and handling any complaints you may have, and the home builder is obligated to cooperate fully with all appointed and appropriately qualified dispute resolution specialists.

It is clear then that if you are thinking of purchasing a new home it is vital your property is being constructed in conformity with the Code. The Code provides transparency, fairness and structure, and is constantly being revised to ensure a fair and transparent balance is found between home builder and future home owner.