New build - developer going out of business

Felicity

Hi, we are buying a new build which is currently in construction. It will be complete in a months time.

We have found out that our (regional) builder (history of hundreds of houses on a number of developments across the region) will be winding the business down and closing it 2 months after our completion date.

Should we be worried?

They are saying that we will have a helpline to call for 2 years afterwards but what if they don't pick up the phone? What if they just don't bother with the snagging or any issues down the line. We basically have no legal recourse to anybody.

I've got our solicitor on the case checking road and drainage adoption but what are the other considerations. I fear there may be many.

Thanks in advance.

davidmcn

One of the risks you have to take. Presumably you're getting an NHBC or similar 10 year guarantee? That covers the potentially expensive stuff.

giddypenguin

Well you'll have the NHBC warranty- which may or may not be useful.

But really - at this point there isn't a whole lot you can do about it. I assume you've exchanged, so committed to purchase - so there isn't any point worrying for now!

I would, however, consider getting someone in to help snag the property the minute you get in. Time will be of the essence, so be prepared to make a nuisance of yourself to get these things fixed sharpish.

Felicity

Thanks for your replies.

That's worrying then! Part of what we are buying is a 2 year warranty, basically assurance from the builder. That seems to be no longer part of the deal, making the whole package less valuable.

Yes, we have NHBC so assurance for major structural defaults but they will not get involved with cosmetic issues and it needs to be a fault costing a few thousand before it triggers the warranty.

Thanks for your responses anyway.

chappers

What does your contract say about defects and snagging.
Not sure if NHBC have an exclusion period where the developer is still responsible. I use BLP for my developments and they have an initial exclusion period, which is actually two years.