Self Build Warranty Issue

scottiow

Hi,

We are currently nearing the final stage of buying a self build house, however issues have arisen with regards to the warranty taken out on the property and has put the buy at risk of falling through.

The build we have been told was completed in 2011 but sign off was in 2017. We thought a warranty was in place when we put an offer in, but it became apparant this was only taken out after we put an offer in, in July 2018. Its an LABC warranty and the issue is its only valid for 3 years and our solicitor has raised this and its gone back to the mortgage lender as they were expecting this to be a 10years warranty. We are currently awaiting their decision if they would even lend on this now as our broker said he dosnt know any lender who would lend on a 3 year warranty.

This has now given us our own concerns about selling the property on in the furture. From what we understand this retrospective warranty should be from date of sign off and not the build completion. I see some warranties done retrospectively only cover the remaining years from build date hence why its only 3 years remaining on the warranty.

Can anyone give us any advice on this? Or has anyone else had experiences dealing with self build warranties? We are cocnerned that if we were to try and sell the property on in say 2-3years time this could again become an issue as it would be expected the warranty would run until 2027.

We really appreciate any advice and guidance.

ProDave

If the house was completed in 2011 and it had a 10 year warranty from that date, that warranty would expire in 2021

NOW it has a 3 year warranty from 2018 so that will expire in 2021

Go and ask your building society in simple language WHAT IS THE DIFFERENCE?

What are you (or your lender) expecting in 2021, a new 10 year warranty to be issued? Any subsequent buyer once it gets to 10 year old will not be bothered about or looking for a warranty.

IMHO these warranties are for the comfort of a lender and that is the only purpose they serve. I have heard of cases of people rtying to claim on them when building defects are found and being refused. In my own case I have no intention of selling in less than 10 years so I have simply not bothered. That is several thousand £ more to spend on building the house than a useless bit of paper.

The warranty start date may not match the building control completion date as often they will be different providers and they will each have their own opinion of when the building is "complete"

davidmcn

You shouldn't really be expecting a 10 year warranty for any one-off build, often all you get is a certificate by say the supervising architect. If your lender is one which is insisting on this then it may be simpler for you to find a less fussy lender. It certainly isn't a universal requirement.

scottiow

Hi,

Thanks for your replies.

The confusion has come from the difference in completion date and sign off dates I believe, as the broker and solictor both believe the warranty should run form the sign off as some warranty companies do. As the policy had been taken out this year and sign off last year it had been expected the warranty to be 9-10years from this date not from 2011.

There is no expection from us or lender (I would imagine) that any new warranty would be issued but that if the original warranty should have run from 2017 not 2011 therefore lasting till 2027 would any future buyers have issues getting a mortgage becasue of lack of warranty.

I have been reading up on the warranties and like you say ProDave seems people have struggled claiming on them anyway but seems more to be for the mortgage lenders benefit.

We are waiting to hear back from the lender as they are reviewing the current warranty. Hopefully they are happy with it.

Again thanks for your replies and opinions on this.

G_M

No one will provide a warranty for longer than 10 years from completion of the build ie 2021.

Buyer has given you a warranty to expire in 2021 - what more do you expect?

You could, of course, demand a warranty for 50 years. That would be nice!

ProDave

So what happened between it being "completed" in 2011 and "signed off" in 2017?

As already mentioned, the warranty provider would start their warranty when they deemed it to be "complete" which would probably been in 2011. They are not going to give an extra 6 years cover because the builder may not have notified building control that it was complete for another 6 years.

scottiow

Just to be clear no one is expecting the warranty to run 50 years or beyond what the standard warranty length are. As buyers we arnt demanding anything, its wether the mortgage company will lend against the warranty currently in place which is nothing to do with our decision, its the lender. As we are still awaiting their decision we dont know if they are happy with it or not, they might be. But it has been flagged up as something unexpected by various parties involved, lender, solictor, broker as they had expected it to run from sign off. The question was advice and guidance by anyone who has had dealings with self build warranties and what to expect with retrospective self build warranties when buying properties. Not demanding anything other that what is standard practice.

G_M

Well wait and see what the lender decides!


If they decide it's a problem and refuse to lend, then, as suggested above, speak to an independent broker and find another lender.

scottiow

Hi ProDave, this is what I believe is confusing it. They lived next door and slowely finished it over the course of those years as far as we are aware having then moved into it. Okay so they deemed it complete from when the structure was built and not sign off, considering these warranties cover mainly structural isses that makes sense. Hopefully the lender also feels that way.

System

If it only got a completion certificate in 2017 then it was only complete in 2017, if they have been living in it since 2010 that's neither her nor there, they technically shouldn't have been living in it.
by the same token, self build homes rarely have a 10 year warranty unless the builder is accessing a self build mortgage which requires it (i'm guessing they didn't have a lender as the cost of lending for 7+ years would have been expensive)