Unexpected ongoing costs: home alarm system

The buyer’s claim

The buyer claimed that at the point of sale they agreed to purchase an alarm system for a total cost of £745 and were not advised of any additional costs involved. The buyer claimed the system was not functioning efficiently and was not fit for purpose and that they had been mis-sold as they were not informed of the ongoing monthly charge required for the system to operate properly.

The problem had been ongoing for more than two years, causing the buyer distress and inconvenience.

The buyer requested the builder refund the purchase cost of £745.

The builder’s defence

The builder denied being in breach of the Code and stated it had advised the buyer through its Home Maintenance Guide that servicing is the homeowner’s responsibility. The builder noted it had arranged for the system manufacturer to attend the buyer’s property and no faults were recorded with the system.

The builder stated it remained willing to arrange for the manufacturer to re-attend the property, but the buyer declined.

The builder did not agree to refund the installation fee.

The adjudicator’s findings

The adjudicator noted that the description of the alarm system provided to the buyer made no mention of ongoing monthly charges necessary for the system to function fully. The builder had also not raised the possibility that problems with the alarm system could be because the monthly fees had not been paid.  The buyer only became aware of the need to pay ongoing fees following a visit from the alarm manufacturer’s engineer.

The adjudicator found the builder to be in breach of Section 1.5 of the Code as it did not advise the buyer of the ongoing monthly charges required for the system to function as intended and therefore the sales and advertising material in this case were not clear.

The adjudicator did however find that the builder responded to all the buyer’s communications within a reasonable time period, took steps to rectify the issues brought to its attention by the buyer and did not attempt to deny responsibility.

Learning points

For buyers:

• Your builder must provide you with sufficient information to make informed decisions throughout your purchase. This includes information about any ongoing charges associated with the home. Our Code Requirements with Builder Guidance outlines what your builder is required to provide.
• Read all the information provided by your builder or their sales agent and ask questions if anything is unclear. Consider the points covered in our blog Understanding your new property purchase and take a look at our 9 essential steps for new home buyers for some useful points to note as you begin your purchase.
• Keep a record of all your correspondence and take notes of verbal conversations to refer to, especially in the event you need to make a complaint.
• Download our complaints pack for guidance on raising a claim via the Code’s Independent Dispute Resolution Scheme.

For builders:

• It is your responsibility to ensure that buyers are aware of factors that could affect their decision to purchase, including any additional costs and maintenance contracts. You cannot assume your buyers will be aware of these by simply providing a brochure or guide. Read our blog Pre-purchase information – how much is enough? for guidance.
• Download the Code’s Right First Time factsheet on ‘Clear and Truthful Sales and Advertising material’ for some top tips to help you get it right first time.
• Refer to the Code Requirements with Builder Guidance which provides additional guidance on what to include in your sales materials and download the Code Compliance Checklist to help you track and record the information you provide to your buyers.
• Providing a responsive, accessible after sales service and complaints process is essential and can reduce the inconvenience to buyers (and costs to builders), even where the two parties may not reach agreement.
• Ensure sales staff are aware of their responsibilities and requirements under the Code and that training on the Code is refreshed annually.