Just as many new products have a guarantee, so you should expect one from the builder of a newly built home. It's not compulsory, but most builders give this guarantee.
The most common one is issued by the National House-Building Council (NHBC) under its Buildmark Scheme.
The scheme provides an insurance policy for any structural defects in a new house of flat which occur in the first 10 years. The builder agrees that the new home will be designed and built to NHBC standards, and promises to put right any defects resulting from a breach of NHBC requirements in the first two years-the 'initial guarantee period.' The NHBC gives warranties to compensate the buyer against loss if the builder becomes insolvent before completion of the home or fails in the initial guarantee period to correct defects, or if there are any defects or major structural damage in the ' structural guarantee period'-the eight years after the initial guarantee period.
Once contracts are exchanged, the builder's solicitors sends the buyer's solicitor an offer of cover and acceptance form, which is completed and returned to the NHBC. Cover then starts for the warranties for loss from a builder becoming insolvent. When a home passes final inspection, the NHBC issues the Ten Year Notice and Final Certificate, in duplicate. One copy should be kept with the title deeds, the other by the buyer (along with the offer of cover form). If the owner sells the property during the 10- year period, the buyer takes over the remaining benefit and the paperwork is passed on. Note that subsidence is not usually covered by the Buildmark Scheme, so include it in your buildings insurance policy.
Philip Popeck is a Partner at Curry Popeck, solicitors, Call him on 020 8907 2000 or email him at philipp@currypopeck.com.
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