Buildings 10 Year Warranty

ellenor2013

We are trying to buy a flat which is leasehold and is only 3 years old. We were due to exchange last Wednesday and move today but there is a problem which has been picked up by our Solicitor that the Sellar does not have any 10 year warranty certificate. The Sellers Estate Agents knew this and let us carry on as we do not need a mortgage and have now got nasty and have tried bullying us into exchanging. The local council planning application for the flats etc are fine but I have phoned the NHBC who were unhelpful even though the properties are not registered with them as well as Zurich & Premier. We have phoned the Architect who drew the plans but that is all he did, he did not issue a certificate. The Builders / Maintenance Company are in Administration and we do not know how we can get round the problem as when we come to sell the property as without the warranty certificate we will come unstuck. We have even phoned the owners of the land at the time the properties on the estate started being built and they can't help. Is there a way round this that is viable for when we come to sell this property if we go ahead!!:(

steppevos

Have you asked any of the neighbours if they have a warranty, and if so could you or the seller get a copy from them? (it is really the seller and their sollicitor that should sort this).

chappers

There are a couple of companies out there that will provided retrospective warranties BLP are one of them(probably the market leaders) their policies are underwritten by Allianz so maybe they do one direct as well.
I have used BLP for a similar problem where I purchased a part built newbuild with regard to price, I think, if I recall correctly it was about £9k all in which was for about £350k rebuild costs split across three properties. In your favour would be the fact that the building has gone 3 years without substantial failure and was inspected for building regs.
Did the current owners build the house, if not their solicitors should have been doing what yours are.
You are correct anyone buying with a mortgage would have problems.
How to procede depends on how much you want this property.
I would be expecting the vendor to be footing this bill, but if you really want the property you could maybe share the costs. I would be the proactive one on this if I were you doing the legwork and finding out if cover is available.
Speak to Petra she is very knowledgeable
http://www.blpinsurance.com/

Furts

A retrospective warranty might be fine if you are prepared to take the risk and approach this from a commercial perspective. This would be factored into the price. It might mean a cash purchase.

If you view this as a private buyer and there is no warranty on the flat, or indeed the neighbours, I would not entertain buying the flat.

The risk element is why is there no warranty? What defective work will not have been inspected? What items have been deliberately hidden only to cause problems in future years? And so on.

A retrospective warranty will not answer these issues - only put them right, to an extent, when they appear. Plus, there will be exclusions to the policy.

A reputable developer would have a warranty in place.

rs65

Not every new property has a warranty.

My builder wasn't registered with NHBC so we had no warranty.

Thrugelmir

ellenor2013 wrote: »

Is there a way round this that is viable for when we come to sell this property if we go ahead!!:(

You would need to sell to a cashbuyer. As obtaining a mortgage in the medium term could prove difficult for any perspective purchaser.

Retrospectively obtaining a warranty could prove nigh impossible.

rs65

Thrugelmir wrote: »

You would need to sell to a cashbuyer. As obtaining a mortgage in the medium term could prove difficult for any perspective purchaser.

Why? I bought this house as a new build without a warranty and got a mortgage on it.

Thrugelmir

rs65 wrote: »

Why? I bought this house as a new build without a warranty and got a mortgage on it.

Presumably had an architects certificate at the very least.

Furts

Thrugelmir wrote: »

Presumably had an architects certificate at the very least.

Presumably an Architects certificate that is transferable, backed up by insurance, guaranteed effective for a suitable period of time...etc

I met a company recently. It was a modern version of an Architects certificate. Valid for six years was the USP...Do not go there!

rs65

Yes I had an architects certificate.

The CML type certificate is to the purchaser and transferable to the next purchaser. It usually makes the architect liable for 6 years. It only relates to the architects duties (ie exercise of reasonable skill and care) and is not a warranty for construction defects.

Its only backed by insurance as far as the architects professional indemnity is concerned. It is therefore only of use whilst the architect still exists and maintains PI.

Furts

rs65 wrote: »

Yes I had an architects certificate.

The CML type certificate is to the purchaser and transferable to the next purchaser. It usually makes the architect liable for 6 years. It only relates to the architects duties (ie exercise of reasonable skill and care) and is not a warranty for construction defects.

Its only backed by insurance as far as the architects professional indemnity is concerned. It is therefore only of use whilst the architect still exists and maintains PI.

A good reply. I am aware of these points.

Consider two houses for sale both anywhere up to ten years old. One has an Architects Certificate, with the potential pitfalls that you detail. If all is well, it is covered for six years. The other has a ten year warranty without pitfalls. Which house would be the wiser purchase?

Originally, NHBC was set up to protect the mortgage lenders. Hence for ten years the lenders are not at risk should the house be defective. Basically, their loan is protected. This concept is not that behind an Architects Certificate.