Considerations when purchasing a New Build Property

Purchasing a new-build property can be very exciting.  However, as keen as the developer may be to achieve an early exchange of contract, it is important that you, as the purchaser, take a step back and take the time to familiarise yourself with the key issues newly built properties present and what is being sold to you.  

Amongst many other considerations, early points to consider include: -

1. Planning Permission and Compliance

It’s essential to check that the property being purchased has appropriate planning consent. The local planning authority grants this permission, and it’s important to check that all conditions attached to the planning approval have been met / complied with by the developer (particularly any Grampian conditions). Conditions relate to a wide variety of matters, from the materials to be used, layout of the development, landscaping, or access requirements. Failure by the builder to comply with these conditions could lead to future issues, including enforcement action (potentially against you, as the home owner.)

2. New Home Warranty

New build properties typically come with a warranty that protects against structural defects and other issues. It's important that you understand from the outset what type of warranty will be in place, what defects that provides cover against, and who will be providing it.  Some developers offer their own warranty, while others may work with established providers like NHBC (National House Building Council) or similar bodies. You will need to ensure the warranty covers a sufficient period and includes key protections such as structural damage and any defects that could arise within the first few years.  You will also need to check that the warranty can be relied upon.

3. Building Control Sign-Off

You should check whether the property has been signed off by Building Control. This is a formal certificate from the local authority or an approved inspector confirming that the property meets the required safety standards. Without this final certificate, you might be exposed to risks regarding the property’s safety and long-term viability.  The property’s value and marketability would also be affected.

4. Deposit Arrangements

When buying a new build property, particularly in an off-plan scenario, you’ll typically be required to pay a deposit upon exchange of contracts. It’s crucial to understand how this deposit will be held and what protections are in place. A buyer’s solicitor will normally want to see the deposit is protected in a client account or under a suitable arrangement to safeguard your interests until completion takes place.  This conflicts with a Developer who will want the deposit released to them immediately following exchange (typically to fund the ongoing construction works). 

5. Completion Timings (Off-Plan Purchases)

Where a property is purchased before it is physically built, consideration must be given the timings of completion (and what triggers it). This should all be clearly outlined in the contract and provisions should be made for unforeseen delay.

6. Snagging and other Defects

No new property is entirely free from defects or imperfections. It’s important to understand the developer’s obligations as regard any “snagging” – the process of rectifying minor issues such as cosmetic imperfections or incomplete work. You will need to read the sale agreement carefully and speak with your solicitor to ensure that appropriate snagging provisions (including sufficient rectification periods) are provided for.

7. Developer’s Obligations

A reputable developer will be held to certain building standards and obligations. These should be clearly outlined in the contract, including responsibilities for ensuring the property is finished to the required standard, as well as any necessary repairs. Thought will also need to be given to the wider development.  It’s essential to ensure that these obligations are legally enforceable and clear in the documentation.

8. Estate Roads and Sewers

For developments on new estates, it’s important to confirm the adoption status of the estate roads and sewer systems. If these are not adopted, the developer may remain responsible for their maintenance (which is all very well until that company ceases to exist). However, if the roads and sewers are adopted, the local council will take over the responsibility.

Conclusion

Buying a new build home provides many advantages, and having your initial offer can be a very exciting time – but it should be remembered this is a substantial purchase and it will require careful attention to detail. By addressing the factors outlined above from the outset, you can help safeguard your investment and ensure a smooth and secure home purchase.