Who does the Code benefit?
The Code protects “Customers” who are individuals purchasing or intending to purchase a new home. The Code provides protection to Customers by constructing a framework of protections which last from the initial interest in the new home until 2 years following the purchase.
Who must comply by the Code?
The Code requires that all housebuilders and developers who build new homes must register with the New Homes Quality Board (the “NHQB”) and must comply with the contents of the Code.
The requirement to register begins from January 2022. The final registration date is 31 December 2022. The period between January 2022 and 31 December 2022 is a Transition Period. During this period the housebuilder or developer must make it clear to Customers whether their new home is protected by the Code.
Once a housebuilder or developer has complied with the required registration processes and training, alongside meeting the requirements in the Code, they will become a Registered Developer.
What protections has the Code introduced? 10 Guiding Principles
The Code introduces a number of practices which Registered Developers should incorporate into their new home transactions.
Throughout the transaction, the Registered Developer should uphold the 10 Guiding Principles which include acting fairly, providing high quality homes and acting in a transparent and independent manner. The Code itself is made up of 4 parts:
- Selling a New Home;
- Legal Documents, Information, Inspection and Completion;
- After-Sales, Complaints Management and the New Homes Ombudsman; and
- Solvency, Legal and Jurisdiction.
When advertising and negotiating the sale of a new home Developers must ensure that they do not provide Customers with misleading information and should not use high-pressure sale tactics.
The Code provides detailed protections at each stage of the sale of a new home. Detailed guidance is provided for using Early Bird Arrangements, Reservation Agreements and the Contract of Sale, to name a few.
The Code specifically extends protection for Customers following the purchase of a new home by requiring Registered Developers to provide After-Sales Service and a Complaints Resolution Process to deal with snags and any other complaints.
Throughout the transaction, the Registered Developer must ensure that they are financially established to ensure that they are adequately protected against insolvency.
What is the Complaints Resolution Process?
The Code creates a Complaints Resolution Process which can be used by any Customer for 2 years from the date of Reservation or Completion, whichever is later. The Code sets out the process that must be followed.
New Homes Ombudsman Service
Unresolved disputes will be referred to the Ombudsman appointed for that role under the New Home Ombudsman Service. This service will be run by The Dispute Service Ltd. The Ombudsman designate has been named as Alison MacDougall.
What are the next steps?
From January 2022, housebuilders and housing developers are able to register with the Board to become a Registered Developer.
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