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What are the latest updates to the Consumer Code for Home Builders ?

The Consumer Code for Home Builders was established in 2010 to ensure that all new homebuyers are fairly treated and provided with reliable and accurate information about their purchase. During a recent review, a number of amendments were made. They are explained below. 

Clarification of ‘the Code’, and ‘The Code Scheme’ 

It is now understood that ‘the Code’ only consists of 19 enumerated ‘requirements’ while the ‘Code Scheme’ contains more in-depth explanations and introduces the dispute service. The latter must provided to the homebuyer with the reservation agreement and their legal representative with the draft sale contract. 

‘Home Buyer’ and ‘Customer’ Definitions 

These two statuses are now separate and different, with a customer becoming a home buyer when they formally enter into a reservation agreement. 

Vulnerable Customers 

Any needs of vulnerable customers should always be considered. For example, if a older customer needs assistance in understanding documents, they are entitled to assistance from a family member. 

Code Availability 

The Code Scheme logo must be displayed prominently in sales brochures and in both homebuilders’ and sales agents’ offices. 

Staff Training 

The Code is working with leading industry organisations to improve online training for staff in homebuilder and estate agent offices. 

 

Sales and Marketing 

High-pressure sales techniques are now excluded from the Code’s good practices standards. 

Pre-Contract Disclosures 

‘Event fees’ such as fees on resale or lease transfer must now be declared at the reservation stage. 

Pre-Contract  

It is now clearly stated that builders may offer incentives and / or refer homebuyers (for example) to certain solicitors but may not dictate which legal representative they use. 

Reservation 

Reservation agreement requirements have been amended to include: 

  • The date that the price remains valid until 
  • An explanation of any event fees 
  • Confirmation that a copy of the Code Scheme has been provided to the buyer 

Reservation Fees 

Homebuilders are now required to state in the reservation agreement the probable range of financial deductions that may be made on cancellation. They may deduct an amount that represents reasonable costs incurred in processing and holding the reservation. 

Completion and Handover 

The good practice guidance within the Consumer Code for Home Builders has been expanded to include the suggestion that homebuyers be advised that minor items may be outstanding within the home and its curtilage, and clarify how they will be completed. 

Independent Dispute Resolution 

Changes have been made to the Independent Dispute Resolution Scheme. They include: 

  • Time frame for homebuyers to bring complaints. Claims may not be made for 56 days after bringing the issue to the builder’s attention, and no later than a year after builder gives a final response. 
  • The award for ‘Inconvenience’ has increased from £250 to £500. These awards may only be made where a breach of the code has been identified and the inconvenience is more than minor. 
  • With code breach allegations, the buyer must identify the code requirement that was allegedly breached. This is to prevent general complaints that have no real code relevance.    

 

Structural Defects Insurance

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