What do new build warranties cover?

There are 13 warranty companies all producing slightly different warranty products ( some with exclusions such as damp issues )

You should check with your solicitor what cover you will be receiving prior to legal exchange …if you have a lower level policy : check your contract that you have some form of protection in the contract terms to offer you protection in the event that the builder will not make good any snags

There are two stages to any new build warranty

The defects liability period, which covers the first two years and the builder is responsible for  ( 1 year if you are buying through shared ownership )

The structural insurance period which starts in year 3 and lasts for the final 8 years of the 10 year warranty period from when you complete on your purchase.

Builders Defects liability period.

During your first two (1 year if social housing ) years in the home, should there be issues with the work the builder has done, such as the leaky showers , because they’re not sealed properly or the heating not working because the pipes are faulty, the builder is obliged to come and fix them within a reasonable period

This covers only only items that are breaches of the warranty standards and tolerances or industry standards or building regulations

Structural insurance period.

During the structural insurance period years 3-10, the warranty provider ( NHBC for example ) is only responsible for major problems with the structure of the house. This includes foundations, the external render, roofs, ceilings, chimneys and load-bearing parts of the floors.

Smaller ‘defects’ are year 2 become your own responsibility. This includes non-structural defects such as problems with your gutters or fixtures and fittings.

It’s important you are clear on when your warranty starts and more importantly when the initial two year period expires and keep an up to date snagging list completed again before your defects liability period runs out.

What new home warranties don’t cover?

Understandably, natural wear and tear isn’t covered by a new home warranty. Neither is weather damage or any problems resulting from you not maintaining your home adequately.

Damp and condensation may be covered but only if they have occurred as a result of the builder’s failure to comply with the warranty provider’s standards (in other words, if it’s the builder’s fault!).

Be careful of the small print – ‘A’ Rated vs Unrated
As all warranty providers are acting on behalf of insurers, they may not always be as willing to carry out (and pay for) remedial work. As is always the case with insurance, the small print is key. Make sure you read all of the warranty documentation and question anything that doesn’t seem quite right.

Insurance providers are rated according to their financial stability and ability to honour their claims. As a structural warranty is for 10 years, it is even more important to know the rating of your insurer. You should only use ‘A’ rated or higher.

If unsure ask your solicitor ….

So you have taken possession,  What do you do if you spot a defect?

Make sure you contact the builder as soon as possible. Keep a record of all communication including dates and times of telephone calls. This will be needed if there are problems with getting your builder to address the issue.

In years 3-10 , LABC, Build-Zone and Premier Guarantee warranty policies have a £1,000 excess. This means you’ll pay the first £1,000 of each claim made under the warranty.

It is also important to not wait and let a defect get worse. You could be in breach of the warranty or result in an unsuccessful claim if you spot a defect and let it get worse and cause more damage. This is because the problem could have been resolved earlier at less cost and damage to the property.

A snagging survey could help apply pressure on your builder to sort defects. Get in touch with our professional snagging inspectors today

What if the builder won’t honour the warranty ?

The various consumer codes (Consumer Code for Home Builders, the Consumer Code for New Homes, the Consumer Code for Builders of Homes for Sale) are there to ensure consumers are protected from undesirable trading practices when buying a newly built home. 

All of the codes offer a dispute resolution scheme which you can use during the first two years if the builder won’t carry out the necessary remedial work.

If that’s not confusing enough, there is now a New Homes Quality Code which is overseen by a voluntary  New Homes Ombudsman. Since it’s launch in Jan 2023 developers now operate under the New Homes Quality Code, and this trend is set to grow. 

The builder will only be liable for problems detailed in the contract. We’d always advise buyers to make sure there is a “snagging” provision to allow you to get little issues sorted – such as doors catching on carpets – directly with the developer.

See what’s involved with a Snagging Survey and whether it can help you call 01788 494400 or go to www.newbuildinspections.com we can help you find a local snagging professional.

What to do if you are unhappy with the response of your warranty provider?
If you are unhappy with how your warranty provider has handled your case, you can complain to the Financial Ombudsman Service. But first you must make a formal complaint to your warranty provider.

Based on an article written by HOA 2023

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