Changes in the Consumer Code 


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The Consumer Code for Home Builders applies to any builders who are registered for new home warranties under National House Building Council (NHBC), Premier Guarantee or Local Authority Building Control (LABC) and are also the seller of the homes.

The Code's pre-sale and handover requirements apply to home buyers who are the first purchasers of a home and to subsequent purchasers in the two year period after the first legal completion.

Although housing associations are not usually directly caught by the Code (as it is unusual for them to be registered with NHBC or Premier) you may wish to consider applying the Code to your sales process as a matter of best practice and in order to ensure you are meeting the market's expectations.

A new version of the Code has just been published which applies to all reservations signed on or after 1 April 2017 and which implements various changes:

  • Marketing the Code – the Code should be made freely available to all customers and some of the changes are to ensure the Code is advertised properly.
  • Pre-contract information – the guidance has been amended on management services and fees. Details of all costs that the buyer will incur, and how they are to be calculated must be included in the pre-purchase information given to the home buyer.
  • Reservations – home builders are required to give home buyers a reservation agreement that sets out clearly the terms of the reservation of the dwelling. An audit of reservation agreements has shown that there is inconsistency in how the current guidance has been interpreted and the consultation proposes that agreements should clearly set out an itemised breakdown of costs that will be included in the management services and fees that the buyer will be obliged to pay. It should also be clear what proportion of the reservation fee may be retained by the home builder in the event of cancellation.
  • Independent Dispute Resolution Scheme – the home buyer is only able to bring a complaint after 56 days have elapsed since first raising it with the home builder (rather than the previous timescale of 3 months) and no later than 12 months after the home builder's final response. Further, the limit for the discretionary award has increased from £250 to £500.
  • Vulnerable customer – the new draft includes a new definition of "vulnerable customer" in order that home builders can identify customers especially susceptible to detriment more easily and, therefore, act with an appropriate level of care.
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