What can you do about new build defects?
If your new build defects claim has a value of £10,000 or less and you would like us to write to the house builder on a fixed fee basis, or if you have a high value claim that might be suitable for funding on a No Win, No Fee basis then please complete the short questionnaire at the bottom of this page. We will then review your case free of charge and let you know how we can help and what it will cost.
Moving into a brand new home is for most families a happy and exciting time. However as with other areas of life, things do sometimes go wrong and the dream of owning a new build home can quickly degenerate into a nightmare.
It often surprises people who have moved into a new build and encountered problems when they discover just how little consumer protection they have. In particular, property (including new builds) is exempt from the protection offered under the Sale and Supply of Goods Act.
Common new build defects
Common building defects that arise with new builds include;
- Foundation defects which can cause subsidence if left untreated;
- Structural defects involving walls, floors and ceilings; and
- Poor quality workmanship and finish.
However, homeowners buying a property with a 10 year NHBC warranty do receive some additional cover. NHBC is the country’s main provider of insurance for new homes, providing protection for homebuyers in the form of Buildmark warranty and insurance.
During the first 2 years under the NHBC scheme the builder is responsible for putting right any damage caused by their failure to build the home in accordance with NHBC Standards.
In years 3-10, the policy will only cover major defects. Minor defects (anything which would cost less than £1,500 to fix) are excluded.
Legal liability for snags
Defective workmanship in new build homes ranges from minor issues that do not affect the normal use of the property (often referred to as snags) through to more serious problems (such as issues with the design of the foundations for example) which may compromise the structural integrity of your home.
A snag, despite being minor, is still a defect and is still a breach of contract by the builder. Your sale contract with your builder imposes obligations on your builder to construct your new home using acceptable levels of workmanship and suitable materials, in accordance with Building Regulations, plans and specifications. If the work is defective, your builder is in breach of contract and you are entitled to seek a legal ‘remedy’.
In most cases, homeowners are generally able to resolve the dispute through negotiation with the builder, sometimes with the involvement of the NHBC.
The CCHBAS scheme and new build defects
Another option is to use the Consumer Code for Home Builders Adjudication Scheme, known as CCHBAS.
You will need to read the rules of the adjudication scheme carefully, but it requires claims to be made within 3 months of the builder’s final response to your complaint, which in turn must have been made within two years from the start of the warranty.
The maximum you can claim under the scheme is currently (September 2020) £15,000. There is no longer any fee payable when submitting a claim.
Taking legal action
If all these avenues fail, the last resort of the homeowner faced with new build defects is generally to involve solicitors and, potentially, the Courts.
a) Small claims
If the dispute relates to matters that have a financial value of less than £10,000 (the small claims court limit) then homeowners can pursue a claim themselves using the small claims court procedure. The small claims court is designed for consumers to use without the help of a lawyer. That is why legal costs cannot usually be recovered in the small claims court, which means it is not usually cost effective to retain solicitors to conduct a claim from start to finish. However, many homeowners still opt to use solicitors to write to the house builder to see whether an out of court settlement can be reached without the need for a formal court action to be commenced. If this is your preferred option we can write a letter on your behalf on a fixed fee basis.
b) Larger claims
Where the financial impact of new build defects exceeds £10,000 then recovering legal fees becomes a realistic possibility, making legal action more affordable. However, the impact of legal costs on new build defect claims always needs to be carefully considered, especially where your financial loss is close to the small claims limit.
Where your financial losses comfortably exceed the small claims court limit we can look at funding your claim on a No Win – No Fee basis. Losses in these cases would normally be at least £25,000.
Calculating your loss
In order to assess a potential new build defects claim and identify the best options available, you will need to establish a clear idea of what the financial consequences of the defects are. You could get some quotes for any required remedial work, but in many cases the only sure way of ascertaining your loss is to appoint a building expert (such as a surveyor) to review the defects and estimate what it is likely to cost to put them right. In addition to the cost of remedial action you should also include your consequential expenses, including the cost of any alternative accommodation should you need to move out temporarily.
If you are interested in using our services to deal with a ‘small claim’ on a fixed fee basis or a higher value claim on a fee paying or No Win, No Fee basis then please complete the following questionnaire and email it back to us. We will review your case free of charge and let you know how we can help and what it will cost.