Does the Consumer Code for Home Builders benefit registered providers?25/02/22
Since 1 April 2020, the Consumer Code for Home Builders has operated to provide additional protection to those purchasing newly built properties from developers and builders. With many registered providers of social housing (RPs) unsure whether the Code benefits them or only increases their obligations, we provide our answers to frequently asked questions we have received.
What does the Code set out to do?
The underlying purpose of the Code is to provide buyers with more protection when acquiring a new or newly converted house or flat. Protection is afforded from the point the property is marketed to the buyer through to the after-sales service provided to them after purchasing the property.
The Code aims to ensure that buyers are treated fairly throughout the home buying process, including knowing what service levels to expect. The Code also requires developers to provide reliable information and let buyers know how to access quick and low-cost dispute resolution arrangements if they are dissatisfied.
The Code can also help a buyer resolve complaints and issues, and even prevent them from having to take court action in certain circumstances. However, a significant drawback of the Code is that any award made under the Code is capped at £15,000.
Who must comply with the Code and can RPs acquire obligations through it?
Only builders and developers that are registered with a home warranty provider that has elected to participate in the Code must comply with its requirements. Currently, the only participating home warranty providers are NHBC, Premier Guarantee, LABC New Home Warranty and Checkmate.
Do RPs benefit from the Code?
The Code sets out a list of exempt buyers that are prevented from enjoying the protections afforded through it.
The list includes corporate bodies, partnerships, those buying for investment purposes and, notably, registered social landlords seeking to rent out the property. Therefore, units purchased for rent would not benefit from the Code.
Although the Code operates to provide additional protections to purchasers of new properties, RPs acquiring units for rent are expressly excluded from the list of persons able to take the Code’s benefit.
In their acquisition of properties from developers, RPs must therefore continue to rely on the existing legal rights afforded to them and any protections offered through the developers’ home warranty schemes.
How Capsticks can help
Capsticks aims to be the firm of choice to registered providers, offering a full service across development and planning law, corporate and securitisation, housing leasehold and asset management.
If you have any queries around what's discussed in this article, please speak to Spencer Vella Sultana or Rita Saadeh to find out more about how Capsticks can help.