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Home | News & events | Legal updates | Code aims to ensure buyers are treated fairly

Code aims to ensure buyers are treated fairly

15 March 2010

A new Consumer Code for Home Builders comes into force and applies to new reservations from 1st April 2010.

Home builders registered with a new homes warranty provider such as NHBC, Premier Guarantee and LABC New Home Warranty will be required to comply with the code's requirements.

The code is intended to ensure buyers are treated fairly; establish certain levels of service; information they receive is reliable; and in the event of a dispute, tell them how to implement low cost resolution procedures.

For the home builder there are a number of procedures to adopt:

• must make the code available to their buyers and display it in sales centres
• staff must be trained and know their responsibilities
• Buyers will be given enough information to make an informed decision to purchase
• there must be a written reservation agreement subject to contract setting out key terms holding the property for a specific period - the reservation will expire if contracts have not been exchanged within that period
• process for refunding a reservation deposit less reasonable administration costs
• home builder cannot restrict buyers’ choice of legal representatives
• provide after sales service, such as contact names
• provide buyer with health and safety guidance while living on a development still under construction
• guidance on complaint handling

There are also a number of contract requirements, such as:

• recording representations oral or written which has induced the buyer to proceed
• reporting changes to be made to the property design, construction or materials
• recording estimated construction completion dates and longstop dates in the event of delay
• termination rights

This is just a very brief summary of the code’s requirements. For seasoned home builders the new procedures will come as quite a departure from traditional customs for new home building and selling.

Like everything else, with informed sales and construction teams and the right documentation, there is no reason why the new arrangements should not be seamlessly integrated into existing procedures.

© Shoosmiths. This page is for general information: it is not legal advice. Please read our full terms and conditions for details of the disclaimers and exclusions which apply.

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Get in touch

Derek Archer

Head of Plot Sales
T: 03700 86 3581
I: +44 (0)1604 54 3581
E: derek.archer@shoosmiths.co.uk