The go ahead has been given for another 1600 new homes on a site lying between Huntingdon Road and Histon Road, the 2nd NIAB site. What with Trumpington Meadows, Great Kneighton, CB1 and the long-planned Northstow village, Cambridge is seeing a boom in new-build properties.
In times past, developers have held all the cards in terms of completion dates and pre-contract negotiations with buyers, but in recent times there has been a distinct change. The Consumer Code for Home Builders has made positive changes to the way in which developers sell new build properties.
The Code undoubtedly gives more assurances and protection to a buyer of a new build property and those looking to reserve a newly built property should be aware of the existence of the Code and the protection it can provide.
The Code was introduced on 1 April 2010 and is a voluntary code for house builders. However, for those builders and developers who are members of the National House Building Council (NHBC) and similar home warranty schemes, adoption of the Code is a condition of their membership.
The main thrust of the Code is to ensure that buyers are treated fairly and to improve the information provided to buyers both at the time of reservation of a new property and throughout the purchase process.
Where the Code is most useful is in terms of the completion date. Previously, when a buyer has exchanged contracts with a developer for the purchase of a property that has yet to be fully constructed, the developer has been in control when it comes to completion of that transaction and there was little a buyer could do about this without risking loss of their deposit. Some buyers have had to wait several months to complete their purchase. Now, when contracts are exchanged, the contract must give an “anticipated legal completion date” which is a realistic estimate of completion. The Code provides that if, when contracts are exchanged, the property is watertight, legal completion must take place within 2 months of that anticipated date if the property is a house, or within 4 months if the property is a flat. If the property is not watertight at the time of exchange the deadlines are 6 months and 12 months respectively. If the property is not completed by the deadline, a buyer has the right to rescind their contract. This at least gives buyers a more certain indication as to timescales for completion.
Other advantages of the Code are:
a) the right for a buyer to reclaim their reservation fee if they choose not to proceed with the purchase, although the developer is entitled to deduct reasonable administration costs from the reservation fee, and
b) the provision for any proposed changes following exchange which would significantly affect the value of the property to be agreed in writing.
Disclaimer: While we do all that is possible in terms of ensuring its accuracy, this blog contains general information only. Nothing in these pages constitutes legal advice. You need to consult a suitably qualified lawyer from the firm on any specific legal problem or matter.