Know your contractual rights when buying a new-build home

With most home purchases, once you have exchanged contracts, you are committed to buying your chosen property and there are significant financial penalties of not doing so, including the loss of your deposit. However, there are exceptions when it comes to new build homes covered by our Code.

If a home builder makes a substantial or significant change to the home which you have not agreed to, you may have the option to cancel your contract. Substantial changes would include those that would affect the value or useability of the property such as major changes in rooms sizes or outward appearance.

Under the Code, home buyers are entitled to cancel their contract in these circumstances and the home builder is expected to return the full deposit and reservation fee as well as seek reimbursement for out of pocket expenses. Should this not happen, a claim can be brought via the Code’s Independent Dispute Resolution Scheme.

Although the maximum award through our scheme is £15,000, experience suggests that where an adjudicator has found fully in favour of the home buyer, the builder has normally returned the deposit in full of their own volition. Pursuing a claim through the Code’s IDRS does not prevent you from taking further legal action should you wish to do so.

Instances where substantial changes are made without prior agreement are thankfully very rare. Where changes are made to properties, they are normally minor and discussed and agreed with the buyers affected. However, thanks to this extra protection, you can have confidence that there are measures in place to make sure that your finished home is as you would expect it to be.

Deadlines matter

The Code also enables you to cancel your contract if there is an unreasonable delay in finishing the construction of your home and serving the notice to complete. Sometimes delays are unavoidable, and you should always be kept informed by your builder of any change to your completion date. However, where these delays become excessive, you have the right to withdraw and receive full reimbursement.

The Code is there to help protect your rights, but you should always discuss any plans to cancel your contract with your professional advisor in the first instance.