After several years of work and public consultation in the summer, the New Homes Quality Code was published on 17 December 2021. The aim of the Code is to ensure that new homes are of a high quality and to ‘strengthen protections’ for customers. In short, to improve the new home buying process and to give buyers clear access to remedies should the quality fall short of what is expected.
The New Home Quality Board (NHQB) was established in January 2021 and in November 2021 the Dispute Service Limited was announced as NHQB’s preferred partner to develop the New Homes Ombudsman Service, which will start operating in 2022. It will be the Ombudsman’s responsibility to ensure that builders and developers comply with the Code, with sanctions available to deal with non-compliance.
Developers will need to sign up to the NHQB from January 2022 and, once a developer’s membership has been ‘activated’, buyers will have the benefit of the Code. All developers are expected to have signed up by the end of 2022. There will be a transition period for developers between registration and activation to allow developers to take any necessary steps to ensure they are compliant with the Code.
The Code sets out 10 fundamental principles, including requirements to act fairly, to ensure safety and quality and to be transparent. Obligations for developers and protections for customers include:
- Ensuring that all pre-sales information provided is full and complete.
- ‘Cooling off’ periods allowing the customer a 14-day period after reservation where they may cancel and receive a refund.
- Time frames for exchange of contracts must be reasonable and not less than six weeks after reservation unless the customer requests an earlier date – to remove high pressure tactics and reduce stress for customers.
- Allowing customers, or a professional of their choice, to inspect the home before completion to ensure it is satisfactory.
- A requirement that a home must be ‘complete’ – preventing builders paying customers to move into an incomplete new home early.
- A requirement to have an effective after care service in place to deal with snagging and other issues promptly.
The introduction of the new Code is sure to be a significant step for the house building industry, streamlining obligations within one code and offering additional protections for customers. Announcements are awaited from the NHQB as to how when the registration process will go live (expected late January) and when the Ombudsman will go live, but for now developers will need to familiarise themselves with the Code and ensure they are prepared for it.
We will be keeping an eye on how the code is rolled out and its impact so please look out for updates.
By Lucy Harrison, Commercial Property Associate