New Build Conveyancing
Buying any new build is quite different than buying any other type of property, and it can prove more complicated.
How does buying a new build differ from other types of conveyancing?
The sale of a new build might be the sale of part of a larger plot. This is often the case when a house builder buys a large bit of land, builds individual houses and then sells off individual plots. In addition, there are plenty of things applying to new bills that simply don’t apply to older properties e.g. the NHBC Build Mark scheme, and the need to make sure that all planning permissions and building regulations have been complied with
As soon as you make the decision to reserve a new build property, make sure you find a conveyancing solicitor with plenty of experience of new builds to minimise any risk of losing your property.
New builds and getting your mortgage
Start the process of getting a mortgage offer so that it is in place before the date set for the exchange of contracts. Tell your mortgage lender about the date predicted for completion (which with a new build is always an estimate), and make them aware that this date could shift. Your mortgage lender might also ask for a valuation of the property.
Completing your new build purchase
The house builder will tell you when the property is due to be finished and allow you to set a date for completion. Developers usually give a 10 day gap before the sale completes to give you the chance to go through the property and put together a “snagging list” which gives the builder a chance to put right any aesthetic or practical issues you find with the property.
Be aware though that even once a purchase gets to this stage, the developer can rarely be pinned down to a concrete completion date.
One advantage of buying any new build is that it often means a shorter conveyancing chain - simply because the seller [ usually the developer] shouldn’t have a property to buy themselves
From time to time some house builders and the Government itself offer incentives to those buying new builds – e.g. the Government’s own “Help to Buy” scheme.
Alternatively, you could buy “off plan” - which means you can reserve a property before the house is even built. This often allows you to personalise the property to your particular tastes.
What information or documents are needed when buying a new build?
As well as the normal property purchase documentation including the Energy Performance Certificate, your solicitor will need the following items:
Insurance for new buildings – for example the NHBC Buildmark scheme. This scheme covers the property for ten years. For two years after completion, the NHBC will ensure that any problems are fixed by the developer. After 2 years, the NHBC will deal with any structural defects for the rest of the 10 year period.
Structural guarantee – It is a wise precaution to ask for a structural guarantee from the developer or builder. This makes sure that if there is a structural fault with the building, the buyer is entitled to be compensated. Mortgage companies might ask for this type of guarantee in order to release the money. It is important to note that structural defects also covers problems inside the house such as mistakes in decoration or defective plastering.
Planning permission – the solicitor will ensure that the builder has got planning permission for the building, and that the developer is sticking to the conditions of the planning permission.
Building Regulations – A solicitor has to check that the developer has got the correct Building Control consent for the new property. Building Regulations cover building methods and materials used for new build properties to make sure that they conform to the appropriate standards.
Roads – the solicitor has to check that there is an s.38 (Highways Act 1980) agreement in place between the local authority and the builder. This agreement says that the roads on the new estate remain the responsibility of the builder until they become the responsibility of the local council (adopted). The developer should have insurance against default on this sort of agreement.
Easements – Easements are rights belonging to the property such as rights over estate roads, sewage, drainage, water and rights for pipes and cables for utility. A contract should be provided for all of these easements.
Buying a new build property - what will my solicitor do?
Conveyancing solicitors have to be aware of the tight deadlines which are involved when dealing with new build properties. They will need to be aware of what searches need to be done, and what issues can arise before exchange of contracts. It is common practice for the house builder to ask for a deposit at the time of exchange of contracts, so your solicitor has to have picked up any potential problems before this happens.
A conveyancing solicitor will also be able to advise you about any possible risks by buying a new build off-plan. They can also tell you about what sort of points are usually agreed at exchange of contracts so that you are clear on what you are getting when the house is completed.
If you are buying a new build property, your solicitor will complete the following actions for you:
- Give specialist advice about the warranties given on new buildings
- Give you copies of all of the relevant documents for the purchase
- Draw up reports for the contract of sale along with all relevant supporting documentation.
- Deal with any of the conditions set by the mortgage lender for the purchase such as guarantees or re-inspection.
- Keep in contact with the staff working with the builder on the site, and give you other legal advice to make sure that you are fully in touch with the legal progress on your new build purchase.