NHBC cover starts from exchange of contracts and lasts up to a maximum period of 10 years after the legal completion date.
Pre-completion cover provides cover if you lose your deposit because your builder is unable to complete your home. During the first two years after legal completion your Buildmark NHBC cover provides builder warranty, meaning your builder will repair defects that are not considered ‘wear and tear’ or maintenance. It also provides dispute resolution services and a guarantee should the builder not comply. During the final 8 years of the cover, the builder warranty applies, but only if there is damage because the builder has failed to build the following parts of your home to meet the NHBC requirements:
- Foundations, walls, external cladding, curtain walling, external render, external vertical tile hanging, roofs, ceilings, balconies, load-bearing floors, flues, chimneys and access steps to the main structure.
- Staircases, floor decking (for example, floorboards) and screeds (for example, a cement-based top layer applied to the structural floor) to the inside of the main structure if they fail to support normal loads.
- Retaining walls, if they are necessary for the main structure to be stable.
- Double- or triple-glazing panes to outside windows and outside doors in the main structure, if these are newly installed at the completion date.
- Drainage below the ground, if you are responsible for it.
There is also cover for contaminated land and additional cover for failing to comply with building regulations, although this additional cover is not included in all NHBC policies.
The NHBC standards can be found at the following link:
So, what will the NHBC do if a claim is made?
If you claim on the pre-completion cover because your builder is unable to complete the build and as a result you have lost your deposit, the NHBC will either pay 10% of the property’s value (limited to £100,000) or cover the reasonable additional cost for the work necessary to complete.
Should you claim under the 0-2-year builder warranty the builder must repair the damage caused by their failure, treat and remove contaminated land and/or cover the cost of removal fees, storage and alternative accommodation costs.
If the builder declines to complete these works the NHBC have a resolution service where they will conduct an investigation and if their report concludes the builder is responsible for the rectification then the NHBC guarantee will cover the cost, either by paying another builder to complete the works or by paying you the monies direct. NHBC will also accept a Court Judgment on the responsibility of the builder for the purposes of the guarantee.
It is also worth noting that if the value of your claim under the warranty is below £1,700 they will not carry out the works and they will not provide funds to assist you. NHBC have no legal power to award damages or resolve disputes in a legally binding way. They exclude liability for loss of enjoyment, reduction in value and financial loss.
Taking legal action
It is hoped that the NHBC will deal with your claim without the need to consider legal action. However, issues do occasionally arise when it is necessary for the home owner to consider doing so.
Claims that have a value of less than £10,000 are usually referred to the Small Claims Court. Because legal costs cannot be recovered in the Small Claims Court most people deal with the claim themselves.
If the claim has a value in excess of £10,000 and is not dealt with through the Small Claims Court then you need to be aware that if you lose your case you could be required to pay your opponent’s legal costs.