Consumer Code for Home Builders

The Consumer Code for Home Builders (known as ‘the Code’), was introduced in April 2010 to serve as an industry-led code of conduct making the process of home buying fairer and more transparent for purchasers.

The Code reinforces best practice and ensures home buyers feel they are fully informed about their consumer rights and have been treated fairly, before and after signing the contract. Home buyers should also be fully informed about low-cost dispute resolution arrangements that are available in the event of problems.

The Code applies to all home builders registered with the UK’s main Home Warranty Bodies:

• National House Building Council (NHBC).
• Premier Guarantee.
• LABC Warranty.

It does not apply to:

• Second-hand properties.
• Properties bought for rent by social landlords.
• Properties bought alongside others on the same development for investment purposes.
• Self-build properties for owner occupation.
• Where an investor assigns or sub-sells the property to a third person before legal completion.
• Claims about the land conveyed and its registered title.

The Home Warranty Bodies enforce the Code by making compliance a condition for their registered builders. The Bodies can use sanctions such as removal from their register or full exclusion from all registers, if a home builder breaches the Code.

The Code consists of 19 requirements which must be complied with in the marketing and selling of homes, as well as after-sales services.

During the pre-contract stage, the following information should be provided to prospective home buyers:

• Reservation agreement including the fee, purchase price, what is being sold, length of agreement and the period that the price remains valid.
• Home Warranty cover explanation.
• Description of management services/organisations the home buyer will be committed to (if any), as well as cost estimates.
• Assessment of any event fees, such as transfer fees or similar liabilities.

When buying ‘off plan’ (i.e. when the home isn’t yet completed), the following information must be provided:

• Brochure or plan giving general layout, appearance, plot position, etc.
• The home’s contents listed.
• The standards to which the home will comply.

At the contract exchange stage, the home builder must make sure they provide the buyer with a clear and fair contract which complies with the relevant legislation and explains contract termination rights. The deposit protection process and any pre-payments should be clearly explained.

If the home is yet to be completed, the buyer must be provided with information about the estimated completion date, date of handover, and so on. If there are unreasonable delays, the buyer may cancel the purchase and have the reservation fee returned.

During occupation, the Code ensures that the home buyer is provided with an accessible and good quality after-sale service. The home builder should have systems and procedures in place to handle and resolve any calls or complaints from buyers, as well as dispute resolution arrangements.

[edit] Related articles on Designing Buildings Wiki

• Builders Merchants Federation.
• Consumer Code for New Homes (CCNH).
• Cooling off period.
• Developer.
• Help to buy.
• Homebuyer Report.
• Home Builders Federation.
• Home information pack HIP.
• Housebuilder.
• Reservation agreement.
• Starter homes.
• Vendor survey.

[edit] External resources

• Consumer Code - Official site