What do agents need to know about the Code?

What do agents need to know about the Code?

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The Consumer Code for Home Builders (“the Code”) is an industry led scheme which gives protection and rights to purchasers of new homes, ensuring that new Home Buyers are treated fairly and are fully informed about their purchase before and after they sign the contract.

If you are an Agent selling Homes on behalf of a Home Builder who is registered with one of the supporting Home Warranty Bodies NHBCPremier Guarantee, LABC Warranty and Checkmate, then you and your client will need to comply with the relevant Code Requirements.

If you are acting for a Home Buyer, then you need to be aware of the Code Requirements and the benefits it brings them.

The Code applies to all Home Buyers who, on or after 1st April 2010, reserves to buy a new or newly converted Home built by a Home Builder under the insurance protection of one of the supporting Home Warranty Bodies.

The Code Requirements are:

1  Adopting the Code

1.1 Adopting the Code

Home Builders must comply with the Requirements of the Consumer Code and have regard to good practice guidance.

1.2 Making the Code available

The Consumer Code for Home Builders’ Scheme logo must be prominently displayed in Home Builders’ sales offices, those of appointed selling agents, and in sales brochures.

All Home Buyers who reserve a Home should be provided with a copy of the Code Scheme with the Reservation agreement.

1.3 Customer service: before legal completion

The Home Builder must have suitable systems and procedures to ensure it can reliably and accurately meet the commitments on service, procedures and information in the Code.

1.4 Appropriately trained customer service staff

The Home Builder must provide suitable training to all staff who deal with Home Buyers about their responsibilities to them and what the Code means for the company and its directors.

1.5 Sales and advertising

Sales and advertising material and activity must be clear and truthful.

2  Information – pre-contract

2.1 Pre-purchase information

Home Buyers must be given enough pre-purchase information to help them make suitably informed purchasing decisions.

In all cases this information must include:

  • a written Reservation agreement;
  • an explanation of the Home Warranty cover;
  • a description of any management services and organisations to which the Home Buyer will be committed and an estimate of their cost;
  • the nature and method of assessment of any event fees such as transfer fees or similar liabilities.

Also, if a Home is not yet completed, the information must include:

  • a brochure or plan illustrating the general layout, appearance and plot position of the Home;
  • a list of the Home’s contents;
  • the standards to which the Home is being built.

2.2 Contact information

Home Buyers must be told how their questions will be dealt with and who to contact during the sale, purchase and completion of the Home.

2.3 Warranty cover

Home Buyers must be given accurate and reliable information about the insurance-backed warranty provided on the Home.

2.4 Health and safety for visitors to developments under construction

Home Buyers must be informed about the health-and-safety precautions they should take when visiting a development under construction.

2.5 Pre-contract information

Home Builders must advise Home Buyers to appoint a professional legal adviser to carry out the legal formalities of buying the Home and to represent their interests.

2.6 Reservation

Home Buyers must be given a Reservation agreement that sets out clearly the Reservation’s terms, including, but not limited to:

  • the amount of the Reservation fee;
  • what is being sold;
  • the purchase price;
  • how and when the Reservation agreement will end;
  • how long the price remains valid;
  • the nature and estimated cost and of any management services the Home Buyer must pay for;
  • the nature and method of assessment of any event fees such as transfer fees or similar liabilities.

The Reservation fee must be reimbursed if the Reservation agreement is cancelled.  The Home Buyer must be told of any deductions that may be made

While the Reservation agreement is in force, the Home Builder must not enter into a new Reservation agreement or sale agreement with another customer on the same Home.

3  Information – exchange of contracts

3.1    The contract

Contract-of-sale terms and conditions must:

  • be clear and fair;
  • comply with all relevant legislation;
  • clearly state the contract termination rights.

3.2    Timing of construction, completion and handover

The Home Buyer must be given reliable and realistic information about when construction of the Home may be finished, the date of Legal Completion, and the date for handover of the Home.

3.3    Contract termination rights

The Home Buyer must be told about their right to terminate the contract.

3.4    Contract deposits and pre-payments

The Home Builder must clearly explain how Home Buyers’ contract deposits are protected and how any other pre-payments are dealt with.

4  Information – during occupation

4.1    After-sales service

The Home Builder must provide the Home Buyer with an accessible after-sale service, and explain what the service includes, who to contact, and what guarantees and warranties apply to the Home.

4.2    Health and safety for Home Buyers on developments under construction

Home Buyers must be told about the health-and-safety precautions they should take when living on a development where building work continues.

5  Complaints and disputes

5.1    Complaints handling

The Home Builder must have a system and procedures for receiving, handling, and resolving Home Buyers’ service calls and complaints.

The Home Builder must let the Home Buyer know of this, and of the dispute resolution arrangements operated as part of this Code, in writing.

5.2    Co-operation with professional advisers

The Home Builder must co-operate with appropriately qualified professional advisers appointed by the Home Buyer to resolve disputes.

The Code applies to complaints made up to two years from the date on the Home Warranty Body’s insurance certificate, which defines the start of the period of cover, about defects or damage caused by a breach of its technical requirements. An Independent Dispute Resolution Scheme is available for Home Buyers who believe their builder has failed to meet the Requirements of the Code.

Who's supporting The Code