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What is today's blog about?
In this week’s blog, we take a look at the New Homes Quality Code. This is essential reading for RICS APC candidates on the Planning & Development pathway or any candidates involved with residential developments.
You can download a full copy of the Code here, which replaces the current Consumer Code for Home Builders.
What is the New Homes Quality Code?
In January 2022, the New Homes Quality Board was set up to regulate the quality of new build homes.
Housebuilders and residential developers will need to register with the Board by 31 December 2022 to become Registered Developers. They will then have to adhere to the mandatory requirements of the New Homes Quality Code. This will sit alongside existing safety requirements (e.g., Building Safety Bill), Building Control and other regulatory or statutory requirements.
In the event of a dispute or non-compliance with the Code requirements, a New Homes Ombudsman Scheme is being set up.
Currently, the Code covers owner occupier purchases, but in future it may be amended to cover shared ownership and buy to let purchases.
You can watch the Board’s video about the Code below:
What is the aim of the Code?
The aim of the Code is to ‘champion quality new homes and better consumer outcomes for buyers’.
This means building homes that are free from defects or snags. Where these do exist, a timeframe to resolve the issues should be agreed between the consumer and the Registered Developer. The Code will cover all aspects of a new home purchase for a period of 2 years following completion.
How is the Code structured?
The Code is split into two sections:
Statement of Fundamental Principles
Practical Steps
The Code is further split into four key parts:
Part 1 – Selling a new home
Part 2 – Legal documents, information, inspection and completion
Part 3 – After-sales, complaints, management and the New Homes Ombudsman
Part 4 – Solvency, legal and jurisdiction
It is also planned that additional Developer and Consumer Guidance will be published to support the application and use of the Code.
What are the Fundamental Principles?
There are ten fundamental principles which Registered Developers must follow:
There are also ten guiding principles that Registered Developers must follow:
What are the key takeaways from Part 1 – Selling a new home?
Registered Developers must be fair and transparent when providing information for the sale of new homes. This includes avoiding mis-selling, misleading information or high-pressure sales tactics. This relates back to the requirements of the Misrepresentation Act 1967 and Consumer Protection from Unfair Trading Regulations 2008 (more about this here).
Key information that must be provided includes (but is not limited to):
Floor areas
Plot area
Tenure
Specification
EPC rating
Pricing
Service charge
Warranties
What are the key takeaways from Part 2 – Legal documents, information, inspection and completion?
Part 2 defines the key stages in the purchase of a new home, including:
Early Bird or plot option arrangement to secure a plot at an early stage
Reservation Agreement
Pre-completion information
Contract of sale
Notice of Completion Date
Consumer visit, which may include a Pre-Completion Inspection (using a Template Pre-Completion Inspection Checklist) by a ‘suitably qualified inspector’ (which could be an AssocRICS or MRICS residential surveyor with adequate professional indemnity insurance)
Legal Completion
What are the key takeaways from Part 3 – After-sales, complaints, management and the New Homes Ombudsman?
This clarifies that Registered Developers have obligations to consumers post-completion, including after-sales and the resolution of snagging issues.
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Stay tuned for our next blog post to help build a better you.
N.b. Nothing in this article constitutes legal, professional or financial advice.