The New Home Quality Code: what it means to buyers

25th January 2022

From this month, developers will be required to register with the New Homes Quality Board (NHQB). Developers who are registered with the NHQB agree to follow the New Home Quality Code and will be subject to a New Homes Ombudsman scheme.

The New Home Quality Code introduces some key changes to the way in which new build transactions are structured. Some of the new obligations on developers are:

Cooling off period

Customers will now be allowed a 14-day period after reserving a new build property where they can cancel the agreement and receive a refund of the fee paid. The reservation agreement remains valid during this cooling off period and the developer cannot enter into a new agreement on the same new build property. Developers are obliged to advise customers of their right to terminate the reservation agreement.

Pre-completion checks

The developer must allow the customer access to the property before completion, at least five calendar days after the notice to complete has been served. The customer will complete the pre-completion inspection checklist at this meeting.

Planning commitments

Developers will be required to provide customers with a statement of incomplete works under the relevant planning consent. They will also need to give an indication as to when these will be completed. This includes details of any outstanding works to common parts of the estate, roads and landscaping.

Build liability period

The developer’s contract for sale must now include a two-year builder’s liability period for the customer. The developer must advise the client of this after-sale service, which is dedicated to remedying any issues arising from the property in the first two years, including any snags or defects.

New Home Ombudsman Scheme

The New Home Ombudsman scheme will provide dispute resolution for customers who have complaints against developers arising from a failure to meet the required standards of the New Home Quality Code. scheme is set to launch early this year.

The code aims to provide further protection to customers by regulating new build transactions. While many developers already provide sufficient post-sales services in relation to snagging issues and pre-completion property meetings, the scheme and code ensure all developers are accountable for post completion issues. Registration to the New Home Quality Board is expected towards the end of January and all developers are expected to register by the end of the year.

It is important to note that customers will only benefit from the new code once the developer has registered and has activated their membership.