Many people buying a new flats assume that just because the flat has an NHBC warranty nothing can go wrong. Wrong! The NHBC warranty is in reality an insurance policy. If you have ever tried to claim on any insurance policy you will know that insurers are not keen on paying up. Like other insurers, NHBC seeks to minimise liability by means of the small print in the policy. Take major defects. NHBC limit their liability as follows:
- In time. You must claim within 10 years of the date on the NHBC certificate (and even if you buy a new flat that date could be years before the date of your purchase)
- In scope. NHBC pays for defects only if they cause actual damage.
- In amount, by reference to the minimum claim value. This is currently £1,000, adjusted for inflation. If your property is a flat and the damage is to common areas, this minimum is multiplied by the number of flats. So if there are 100 flats and the damage to common areas will cost say £95,000 to remedy, NHBC will escape liability because the amount of the claim is too low.
- In amount, by reference to the maximum payment. The maximum which NHBC will pay is usually £500,000 (£250,000 for conversions), adjusted for inflation. The maximum payment works on an aggregate basis – so if you have three claims each for £200,000 you will exceed the maximum payment by £100,000.
So much for the NHBC guarantee. What about legal action against the developer? Some developers are nice guys who take a pride in their work and if they are told about defects they will put them right as a matter of principle. They will even send you a cheque by way of compensation for distress and inconvenience (OK, that last sentence was a joke). Others try to walk away as soon as they have your money. We have 15 years’ experience acting for flat owners in claims against developers arising from construction defects.
We will do our best on your behalf to drag the developers back to the scene of the “crime” and make them accountable to you.