Dealing with new build nightmares

According to the House Builders Federation’s latest customer survey, 86% of people would recommend their new build to a friend.

However, put the words ‘new build nightmare’ into search engines and you get results with a lot of unhappy customers.

In my experience, most developers work hard to try to rectify faults and problems that occur, but things do go wrong and what can vary between developers and sites is how well they dealt with – if at all.

Key issues for/by the developer which may cause problems with a new build are:

1. Difficult attracting quality tradespeople
2. Poor site management
3. Cutting corners to reduce costs eg watering down paint
4. Pressure to reach sales targets, claiming properties are finished when they aren’t
5. Faulty materials

Other reasons why things go wrong between developers and new build buyers is a lack of understanding the new build process and terms and conditions as such:

1. Some new builds are delayed or worse, pulled forward, causing moving/completion issues
2. Unlike cars, new homes can’t be ‘road tested’ until people move in, so problems can occur which no-one knew about eg drainage issues
3. Even though it’s a new build, it doesn’t mean it’s perfect – properties move, materials expand and contract with the weather and new builds are built to what are now quite generous ‘tolerances’, which most people don’t realise, even though it is usually in the paperwork or explained prior to buying.
4. Developers can go bust and if not insured can leave buyers high and dry
5. Not all developers are good at dealing with snagging issues. Owners who haven’t understood their rights (and responsibilities) and who is responsible for what problem, can end up becoming frustrated with a sometimes drawn out process to fix errors

There are also scandals, for example the leasehold scandal where 100,000 are estimated to be trapped in homes with poor agreements which they should have never been presented with.

So how do you prevent ending up with a new build nightmare?
There are several ways to research the quality and customer service skills of a developer.

1. Checkout the House Builder Federation Survey – Barratt does well for example, Bovis, Taylor Wimpey and Persimmon have all had bad press over recent years and are not being rated highly.

See my interview with This Morning on the problems Mike has and is still having with Persimmon:

2. Check if they are members of the www.consumercodefornewhomes.com
3. Visit a previous site already built and lived in and chat to the current owners. Ask whether they had problems with snagging and how well the developer responded and if they are sorted
4. Be clear about what you are buying and ask lots of questions. If the property is not yet built, what can/might they change. I hear stories about boilers being re-sited, different sized rooms etc.
5. Find out more about the new build warranty and how it works. How many claims has the developer had? How many have been settled? How long does it typically take?
6. Instruct your legal company you wish to have an independent snagging survey from an expert (ideally RICS qualified) or someone that has worked in the industry, such as Steven Nancarrow from New Homes Advisors. Ask to ensure that this is in the contract and be very clear that completion won’t take place until problems are solved or money will be withheld.
7. Be very clear on what the developer/warranty provider classes as a ‘problem’ and what is and isn’t covered – do this before you buy.

If you already have a new build nightmare, what are your options?
If you have moved in, you have problems, then in the first two years, you need to go to your developer first, after that time:

1. Contact the legal company who dealt with your purchase and ask them to let you know what you need to do to complain and how long the developer has to get problems fixed – they should do this free of charge.
2. Contact the developer and follow up a list of problems and what needs doing in writing, sending recorded deliver by post or with a ‘read receipt’ of email. Keep this paper trail.
3. If the developer doesn’t respond or doesn’t sort the problem, fill in and send their complaints form. Keep all the paperwork and have evidence you have filled and sent it.
4. If nothing happens after you have made a formal complaint, or you aren’t happy, see if your purchasing legal company will contact them on your behalf – reminding them of their obligations.
5. If nothing happens from here, follow up in writing to advise you are going to make a claim through the building guarantee company
6. Contact your building guarantee/warranty provider eg LABC, NHBC, Premier. Give them a list of the problems and evidence that the developer has not
7. The warranty company should arbitrate free of charge or indeed may get the work done for you and bill the developer
8. If you are not happy or the jobs aren’t getting fixed at this stage, then you can turn to www.consumercodefornewhomes.com This will cost you £100 + VAT for them to arbitrate but it will also cost the developer £250 to £500 + VAT.
9. If none of these work, you can contact a snagging surveyor or RICs surveyor that will take on the developer/warranty provider, but they will charge a fee for this. I have worked with www.newhomeadvisor.co.uk before, so worth contacting (we don’t take commission for introductions) OR if the property has been sold to you by a housing association, contact: www.consumercodefornewhomes.com.

If none of these work, then you may be able to take the developer/warranty company to a the Small Claims Court IF there is a legal reason why they owe you money.  To help with this, you may have to instruct a legal company to take the developer/warranty company to task or contact your local and national media to see if you can secure their attention with the story, which may help the developer to rectify the problem(s).