New Homes Quality Code consultation – Law Society response

The New Homes Quality Board (NHQB) is the independent body created to oversee a framework that aims to drive up quality and service standards in the housebuilding industry.

The NHQB held a public consultation on the New Homes Quality Code it plans to introduce.

The proposals

The code will require builders to have comprehensive aftercare and complaints processes in place to address any issues a customer has with their new home after they have moved in.

The NHQB is appointing a New Homes Ombudsman Service (NHOS) to provide independent redress for customers not satisfied with their builder or new home.

If a customer is not satisfied with the service provided by their builder, they will have recourse to the NHOS.

Our view

We’ve limited our response to the questions for which our expertise is most relevant.

Retention mechanisms

There is no standard retention mechanism for use when necessary or desirable.

Retentions provide a strong and effective focus for builders to ‘finish’ to a good standard.

Presumably, there are good reasons for not providing this as a matter of right for buyers where a certain standard has not been attained at the date set for legal completion. We would be pleased to learn what these are.

Off-plan purchases

There is no provision for plans, brochure, layout plans, gradients, boundary details and specifications to be attached to the contract where the purchase is ‘off plan’ or incomplete.

Identifying vulnerable buyers

Whilst we appreciate that there may be some sensitivities, it’s likely to be helpful to solicitors if the developer indicates to the solicitor acting for the buyer whether they have identified the buyer to be ‘vulnerable’ as they are required to do under the code. This should be done when supplying initial documentation.

Freedom to contract

We would like to see ‘freedom to contract’ operate more freely in this market.

New home warranty

We’re unsure how a new home warranty cover note effectively replaces the building completion certificate.

Verbal statements

The code sets out that verbal statements can be added to the contract if these are to be relied upon (as is the case now).

We want to know whether the consumer will be told this at the beginning of the buying process and informed how important these matters could be.

Would they also be encouraged to write these statements down to give to their solicitor, so that they can be put in the contract?

Next steps

This consultation closed on 7 July 2021.

The NHQB will consider the responses and refine the draft code.

Read the consultation on the NHQB website

Maximise your Law Society membership with My LS