Consumer code for new builds
The consumer code for new home builders is now live, requiring all home builders to ensure that home buyers are treated fairly. What does this mean for home builders?
The Consumer Code sets out requirements that all home builders must meet, which inlcudes:
Ensure home buyers are treated fairly
Home buyers know what levels of service to expect
Are given more up to date and reliable information
Can access a low cost dispute resolution service if they are dissatisfied
Home builders must adopt the principles and good practice guidance of the Code, which could even be incorporated into your customer charter. A home builder can always adopt a different approach to reflect your own customer service standards and aspirations but you must provide a similar level of information and achieve a comparable outcome. For more information have a look at Consumer Code for House Builders
What does this mean for home builders? Very simply, home builders must provide more information to potential buyers and be clear as to what a potential buyer can expect in terms of information, the buying process, service levels and dispute remedies. Home builders are being asked as an industry to compile and put together more information for buyers, which in the end should benefit home builders as buyers expectations can be better managed and more realistic. The Code is also working towards ensuring there is greater clarity and transparency in the information and documentation provided to buyers. In many respects the code is formalising the current good practices carried out by the majority of home builders and by default is creating a standard for the industry to adhere to.
Whilst this will increase the time, effort and costs required by home builders to prepare information, it also arguably creates an opportunity for developers to streamline their sales processes. By preparing all the information up front, this reduces the need to constantly package off information between solicitors, so should reduce legal time and effort costs. The Code also discusses the return of deposits and reservation fees. Many developers may incurr costs or even loose a sale if a buyer pulls out of the process and must return the deposit/reservation fee. What is key is that the developer who decides to retain some of the fee must be able to justify these costs. But does this also create an opportunity for the developer to push a greater deal of responsiblity onto the buyer to commit?
The Code will primarily be administered by the main warranty providers - NHBC, Premier and LABC, and penalties for non-compliance may even lead to de-registeration.
