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Most new homes are covered by a 10 year warranty, commonly provided
by the NHBC or Zurich. These warranties are insurance policies NOT
consumer protection so do not assume that this will give you the
security that you expect, however something is usually better than
nothing.
Your warranty provider will do a final inspection on your home
before your developer can ask you to complete - please bear in mind
that this inspection is a risk assessment for their insurance purposes,
NOT a quality check for you to make sure that your home has been
completed to standard. All of the defects we find have been ignored
or missed by the warranty providers because we don't check a home
until they have passed it.
The first 2 years of your warranty are the responsibility of your
developer and the following 8 years are the responsibility of your
warranty provider. Do bear in mind that no-one likes to give money
away and once you have paid for your home any remedial work you
have done must be paid for by the developer, so you may have to
fight long and hard to get the work done.
Moreover the warranty is provided to your builder, not to you as
a homeowner, and exempt from the Association of British Insurers
Code of Practice. This means you cannot sue your warranty holder
if you are unhappy with the service they provide, because the policy
is not in your name (even though you paid for it in the price of
your house with no idea of how much it costs).
NHBC
The NHBC do provide a dispute resolution service: it is generally
a very slow process and in our opinion favours the developer and
not the homeowner, however we think it is the best option available
at the moment.
In response to one of our inspection reports -which usually list
in excess of 100 defects- the claims department wrote to us saying:
"The NHBC Resolution Service… is not designed to deal
with disputes involving such a large number of items. For this reason
I am reluctant to offer our service to you and your client."
How can you have a resolution service that favours people with
fewer problems? Surely the more problems a new home has, the more
concerned the NHBC should be about rectifying them? Needless to
say, we did not take kindly to this reply and this home was rectified
quickly.
ZURICH
Beware when purchasing a home with a Zurich Warranty, as the sales
material is very different from the reality of the insurance policy.
The following quote about Zurich Insurance Building Guarantees
is from John Prescott's website:
"For the first 2 years, either the developer or manufacturer
are responsible for rectifying defects that do not meet Zurich's
published technical requirements, but if they do not deal with them
Zurich will act for the policy holder and arrange for remedial action
themselves."
In their own manual 'Your New Home and the Zurich Warranty', Zurich
themselves state that under the developers warranty, "the developer
warrants to put right damage or defects caused by a failure to meet
the necessary standards of construction."
However the reality is that Zurich only cover your home against
damage or defects causing damage. A letter from the
Claims Department states:
"During the Developers Guarantee Period the developer has
a responsibility to put right Major Damage and Damage within the
New Home… Unfortunately our policy does not cover cosmetic,
aesthetic or incomplete works unless they have been subject to Major
Damage or Damage.
Therefore you are covered if your ceiling caves in because it wasn't
built properly, but if your walls and doors have holes in them that
are not big enough to fall through, the chances are you cannot claim.
In a letter to one of our clients, the
Claims Manager wrote:
"I would take the opportunity to point out that it is the developer's
responsibility to build the house, not Zurich's. …we cannot
guarantee that the house is built free of defects."
What's the point of having a Zurich warranty then?
Conclusion
New Home warranties are insurance policies, no more and no less,
and we all know how much insurance companies hate to part with their
money.
Having said that, don't buy a new home without one!
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