What are your rights if your new-build goes wrong? DEAN DUNHAM on what to do if there is a problem with YOUR property

It must be very alarming for the 360 homeowners on the new-build Barratt development in Cambridgeshire where 88 nearly completed houses are being demolished.

Why is it happening? The foundations have been found to be at fault and not built to the developer’s ‘usual high standards’.

This in itself will result in months of upheaval and misery, but the developer is at least trying to correct the issue ahead of the property being occupied.

The homeowners who have already moved in to the development say they are ‘deeply concerned’ about the safety and security of their properties, the disruption it will cause, and the impact it will have on their finances now and in the future.

Anyone in this position should immediately contact Barratt and ask three initial questions – and you must ask for and get responses in writing.

The developer applied for planning permission to begin demolition works last autumn and  four houses were knocked down

First, is it safe for you to be in the property; second, what action will Barratt be taking to put the issues right, and when; and third, what compensation will you receive?

Barratt has a legal responsibility to deal with this issue because when you buy a new-build home you are covered by a ten-year warranty.

For the first two years, the warranty is provided by the developer – in this case, Barratt – and covers structural issues and minor defects (this is often referred to as the ‘developer’s warranty’).

For the remaining eight years, the developer’s warranty is replaced by an insurance-backed warranty, usually provided by the National House Building Council (NHBC).

This covers only structural issues with the property so will not cover cosmetic issues or minor defects such as a missing window handle or misaligned door.

Bulldozers have started demolishing 88 new properties on a huge new housing development after developers discovered issues with their foundations

If Barratt fails to resolve the issue under the developer’s warranty, your next step will be to report the matter to the NHBC and hopefully it will step in and resolve the issue.

If it does not, your next port of call is to look up which code of standards your developer is subscribed to. This is now an obligation for developers (consumercode.co.uk).

Barratt has changed its code, so if you reserved your new home before November 1, 2022, the applicable code is the Consumer Code for Homeowners. 

If you reserved your property after this date, it will be the New Homes Quality Code. In either case, you will be entitled to use the Code’s complaint resolution scheme and its decision will be binding on Barratt.

However, compensation awards are typically capped at £15,000, so if you think your claim is worth more, you may have to take it through the courts.

Here’s the advice I would give to anyone else concerned about their legal rights when a new-build property goes wrong.

I’ve put a deposit down on a new-build property but I’ve changed my mind. Can I get my money back?

Most developers state that deposits are non-refundable, meaning if you change your mind you lose the deposit.

However, if the goalposts are moved by the builder – for example, if the builder changes something such as the build specification or the date of completion and the change is likely to affect the value of the property – then this is likely to render the non-refundable deposit term void. 

This means you would legally be entitled to your deposit back.

That said, you must check the builder’s contract terms carefully, as often build completion times are cited as being estimates only. 

If this is the case, the builder will have no legal obligation to stick to the estimate. 

This does not mean that it can continue to move the build dates and the Codes of Standards (typically the Consumer Code for Homeowners and the New Homes Quality Code) deal with such delays and usually relay to buyers that they are entitled to cancel their contract and obtain a refund where there is unreasonable delay on the part of the developer.

I’m buying off-plan and put a deposit down – now the development is almost complete and my house looks nothing like the plans. Can I pull out or get money off?

There is a general principle in consumer law that consumers should always get ‘what it says on the tin’ – underpinned by the Consumer Rights Act 2015 which says ‘Goods must be as described’. 

A new-build house falls within this principle so if the builder fails to deliver the house promised, in law, it will be a breach of contract. 

This means you will be entitled to a full refund, and potentially compensation if you suffered any loss as a result. 

Be aware that this is another example where you must check the contract terms carefully. 

Builders are notorious for adding in numerous exclusions, effectively ‘get-out-of-jail clauses’ to cover eventualities such as the need to change a design element of a home. Such clauses should be closely checked by your solicitor.

My new-build has a host of problems that the developer is taking its time in fixing. Can I get them fixed myself and send the developer the bill?

Developers should remedy issues with new-build properties ‘without unreasonable delay’. 

If it fails to do this, you will be entitled to complain, following the steps set out above, and to claim compensation for the inconvenience. 

The Consumer Rights Act also gives you the right to get a third party to fix the issues, and to then claim the cost from the original company, in this case, your developer.

The new houses before they were hit with a bulldozer after developers discovered defects in them

I’ve got cracks in the walls on my new-build – I moved in six months ago – who do I claim with: the developer or my home insurance?

Direct your complaint to the developer under the developer’s warranty I referred to above. If the builder fails to undertake the repairs, report the issue to the NHBC.

My new home has got a damp problem and it’s going to cost me a lot to fix. Is this the responsibility of the developer?

This comes under the ten-year warranty. In the first instance you should complain to the developer, but if it refuses to help and you have discovered the issue after the first two years, you will be covered only if the damp is being caused by a structural issue with the property. 

If this is not the case, you will need to go through the complaint resolution scheme provided under the Code of Standards the developer is subscribed to, or take your complaint to the courts under the Consumer Rights Act.