New Build FAQs

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The procedure for purchasing a New Build Property is slightly different to a “second hand” property.

Here are some of our most frequently asked questions. However if you have a query that is not covered, please contact our experienced New Build Conveyancing Team who will be happy to assist.

The developer will need the details of the Conveyancer that will be acting on your behalf to provide them with a copy of the reservation agreement. The Conveyancer will then be able to open a file with the relevant information contained in the agreement and commence work.

The reservation agreement will reserve the property for a specified period of time, this is dependent on the builder but will usually be between 4-6 weeks. The builder will require contracts to be exchanged before the reservation agreement expires, however this is not always possible due to circumstances out of our control e.g. receipt of mortgage offer.

If we are unable to exchange contracts before the expiry date it is standard practice to request an extension to the reservation agreement from the builder.

Once the reservation agreement has expired the builder is able to remarket the plot and cancel your reservation or they may remove incentives they were providing e.g payment of legal fees.

If the plot is not structurally complete then the builder will not be able to offer a fixed completion date. Contracts will be exchanged on notice and the contract will specify the number of days’ notice the builder must give when the plot is ready (usually 10 working days). Once the plot is ready the builder’s solicitor will serve the notice to complete confirming the completion date.

You should always take into consideration that dates given by the builders are only estimates and can be subject to change due to many factors e.g. bad weather.

If you have exchanged contracts with completion “on notice” you are contractually bound to purchase the property and cannot withdraw from the transaction. Some contracts will incorporate a “long stop date” which is the date the builder would allow you to be released from the contract with no financial penalty if the plot was not complete.

The level of cover will depend on the warranty provider. The three main warranty providers are NHBC, LABC and Premier Guarantee, however there are other guarantees available.

Within the first two years of ownership it is the responsibility of the builder to rectify any issues with the property, however if a solution cannot be found then the warranty provider would step in and offer a Dispute Resolution Service to assist in resolving the issue.

Between years 3-10 of the warranty the policy would cover the cost of rectifying damage to the property caused by building defects.

The builder may offer to purchase your property from you rather than you having to find an independent buyer. The advantages are that you can remain in your current home until the new build property is complete and there will be no estate agent fees involved. The part exchange option also reduces the worry of a chain being involved and finding a buyer who is happy to wait until your new property is complete.

The Council of Mortgage Lenders Disclosure form is a document provided by the builder that contains information of any incentives you are to receive from the builder along with any other relevant information about the property. Most lenders require us to provide them with a copy of the form prior to exchange of contracts to ensure they are fully aware of all aspects of the transaction.

Prior to completion the builder should arrange for you to have a New Home Demonstration to inspect the completed property. At this stage if there are any problems you should compile a snagging list and let the builder have a copy of the same in the first instance.

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Expert Advice

Lisa Wilson

PARTNER


T. 0113 297 3150
E. lwilson@levisolicitors.co.uk

Lisa qualified as a Solicitor in July 2012 and heads up our new build conveyancing department and represents buyers from many of the UK’s largest housebuilders.

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