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My dreamhouse is not what it seems, it is a living nightmare – what can I do?

For most people, purchasing a home will be the biggest purchase that they make in their lifetime; and in the case of a new build home, the buyer will feel that they are purchasing their dream home.

Unfortunately for some, the reality of their newly built home is a far cry from the glitz and the glamour of the marketing material and show home they may have viewed. Should this become the case, many people will not know where to start and may even feel like the odds are stacked against them; this article has been put together to provide anyone in this unfortunate position with some starting points, which could go a long way to help resolving any disputes they may have with a developer or warranty provider.

All new build homes should be sold with a 10-year warranty in which the developer undertakes to remedy any issues which occur during the first 2 years and the warranty provider will provide cover for the remaining 8 years.

Due to the contractual relationship between the new homeowner and the housebuilder, the Consumer Rights Act 2015 does not apply in these cases. When buying a home from a developer the buyer is not contracting with it to build the house but it to provide them with a house. The specifications for the quality of the house will be subject to the information provided within the contractual documentation – this is usually contained within the contract of sale and states that the house is constructed in accordance with the relevant plans, building regulations and standards of the warranty provider.

Should the new homeowner notice defects with the property within the first 2 years, the buyer may have recourse against the developer. They will need to prove that the developer has committed a breach of contract or warranty; by failing to build the house in line with the contractual terms that address the quality of the build.  To prove a breach, it will be essential for the purchaser to obtain different quotes/estimates to show the defects complained of as well as the cost of any rectification works which are required; it is also likely that expert evidence from a surveyor may be necessary to prove such a claim.

As a part of the sale and the provision of a warranty it is more than likely that the parties to the contract will have access to a dispute resolution procedure. Whilst each person should check their specific contractual documentation it is usually a route provided by the warranty provider and/or the Consumer Code for National House builders. These alternative routes should always be considered before rushing into litigation.

In the event that the warranty provider is not willing to undertake any rectification works under the warranty, the purchaser could make a complaint via the warranty provider’s internal complaints procedure. Should the complaint remain unresolved, with the warranty being an insurance product, the buyer could refer the matter to the Financial Ombudsman Services for review. As an independent ombudsman it has broad powers and discretion to not only order that the warranty provider deals with the remedial works but to also award compensation. This can therefore be a quicker route to resolution and should be exhausted before considering litigation.

Please note that to bring a breach of contract or warranty claim the buyer must file a claim form with the court within 6 years of the alleged breach. If a purchaser does not do this, the developer is likely to have the full defence to the claim of time barring.

Should you require any further information then please do not hesitate to contact our contract resolution department here at Lyons Davidson.

This article intends to state the law at the date indicated above. Although every effort is made to ensure accuracy, this article is not a substitute for legal advice.


Written by Steven Vettorel, Solicitor