Building control completion certificate- First time buyer concern

livh

Hello,

We are first time buyers and don’t want to miss anything out, so hoping we can get some advice on a property we are buying. Apologies if this is rather long... 

The house is just over four years old, and is part of a small development. Everything seemed to be going okay until we were recently told that the sellers are ‘unable to produce a building control completion certificate to prove that the property was signed off by Building Control when it was built.’ And our solicitor informed us, ‘because of this, they have offered to pay for an insurance policy, which is designed to protect us and and our mortgage lender in the unlikely event that the Local Authority should take any action for the lack of the certificate.’ No thanks...  For us, this rang alarm bells. Especially since the property is still under a NHBC warranty. 

So we went back to say, we’re not comfortable with the fact there is no building control completion certificate and that we can’t understand how the house has a NHBC warranty but not a building control completion certificate as surely this warranty would not have been issued without one (anyone any ideas?) we asked for the insurance policy not to be sent to our lender yet.. We have also asked if it’s possible for the local authority to be contacted to see if they can provide some clarity on this certificate. 

Our solicitor has told us it would be unusual for the warranty to be issued without the warranty provider having seen the building control completion certificate ‘but not impossible, as mistakes do happen’. This is becoming quite a common response btw (!) Our solicitor has also said It apparently also appears in this case it was not the council who dealt with building control with this property but an architect’s firm instead.. which again is a concern. This is because we have since received the full policy document for the NHBC warranty and even in this document, it makes it very clear that all ‘Housing Units insured by LABC New Home Warranty are the subject of a system of checks and inspections’ and it details that the builder and developer have to comply with Building Regulations and ‘the authorised Local Authority Building Control Body involved inspects their work’.  This now makes us think the NHBC warranty is void. To make things better, the original developers are no longer trading... something we found out ourselves (not from our solicitor)... 

There are even parts of the policy document, where it states we would only be covered if Local Authority Building Control Inspector has carried out the Building Control. But apparently they’re not.. So why would the local authority not be involved? 

Could anyone please offer advice or let us know whether this is common .. and why would a completion certificate not have been done through a local authority if a new build warranty appears to say this is needed? 

We are just cautious because of the recent news regarding the new homes in West Yorkshire that apparently never had final building compliance certificates issued. We’re also concerned with the fact that the NHBC warranty may not be valid, and having recently discovered the original developers are no longer trading, we want to be one hundred percent sure the house is covered. As just because the sellers have had no issue in the past four years, that doesn’t mean problems will not arise in the future.

 We obviously also want to cover ourselves for when we do sell in the future and want to be sure we have all the right documentation as the next purchaser will ask all the same questions as we are surely! We don’t want to make a fuss but we’re sure this is quite a big deal.. though our solicitor doesn’t seem to think so.

Really appreciate any responses. 

Many thanks 

L

Marshaltown

This all sounds very confusing. The property has an NHBC warranty. But not an LABC warranty. Can't see how or why the property would be covered by more than one warranty. Normally your legal adviser would be able to advise you further, but apparently they can’t? 

There are numerous New Build warranty providers I would have thought 10 year cover from one would suffice. Assuming you're taking out a mortgage on the property then their lending criteria will need to be met. Is it?

davidmcn

If it was signed off for the purposes of the NHBC warranty then it was fine. The council aren't going to knock on the door and tell you to sort something out. After 4 years your rights are under the NHBC warranty anyway, the fact the builders have gone bust isn't all that relevant (that is, after all, why the warranty isn't from the builders!). I've never heard of NHBC warranties being declared void after the event.

Doozergirl

This story is quite common on this board.   Addresses aren't given before the houses are out of the ground so the building control inspections are often registered against something else - plot number or development, not the final address.  Lots of people

get the warranty but not the completion certificate.  

Your solicitor is right.  Having the completion certificate is hand is a prerequisite of receiving the warranty, so it would be very,
very unlikely not to have one.  

But is it NHBC or is it LABC?  It can't be both. 

Both will have their own inspectors, the only difference is that NHBC will have to inform LABC (Local Authority Building Control) of sign of, as LABC have to be informed by law, and keep all records.  

I don't believe that your warranty would be invalid without the certificate.  

a) The completion certificate almost certainly was issued. 
b) The warranty has also been issued.  They can't take it away.  

If it were me, I'd be very careful about invalidating the warranty by speaking directly about the house with Building Control at the local authority, but I think that a generic conversation about trying to locate the files for the estate might be useful.  Then, only if you're confident, the conversation can move to a more specific one.  No one wants to invalidate an indemnity policy, especially when it's not your house yet.  

I'd get used to the idea of indemnity policies when house buying, rather than saying a blanket no.  They are par for the course these days, designed to cover all manner of remote risks.  They dish them out like sweets.   There's still considerations to be made, but if they were high risk, there wouldn't be a policy available. Insurers aren't silly.   

Taking the view; you have the warranty.  That is the most important thing.   That is highly, highly unlikely to exist without the completion certificate having been issued.  

livh

Thanks for the responses. 

We have received a policy which covers the house for 10 years (it is an LABC new homes warranty) and the house is four years old so there are 6 years left. 

Our solicitor has made it all a little confusing by saying ‘It would be unusual for the warranty to be issued without the warranty provider having seen the building control completion certificate but not impossible, as mistakes do happen.‘  - surely this would not happen?! 

A building control completion certificate must surely be the most important document in terms of new build houses... and why would an LABC warranty be issued without one? 

We are hopeful that a building control completion certificate can be obtained from the architect company who dealt with building control and are pushing the sellers solicitors to find this document. It is odd that in the first instance the sellers said this certificate could not be provided and immediately offered some sort of insurance instead of trying to obtain even a copy of the completion certificate...

It’s all confusing and we will be getting our solicitor to clarify anyway but it’s all very very slow .. and any advice is appreciated as we are new to this all. Thanks

Doozergirl

The solicitor is covering themselves a bit.  It's not totally outside of the realms of possibility that someone was having a really bad day at the office and missed the most fundamental requirement for issuing a new homes warranty. But it would be pretty unfeasible that someone was that bad at their job, wouldn't it? 

A LABC warranty goes hand in hand with local authority building control inspections and warranty surveys.   They're inseparable.  

https://www.labcwarranty.co.uk/blog/building-control-and-structural-warranty-inspections-why-are-they-different/

I'd go as far as to say it's virtually inconceivable that this hasn't followed due process.  Even if there was never a certificate, many inspections will have taken place.    We're talking about a missing piece of paper, not a problem house.  

You are, in all likelihood, dealing with a fairly common case of the first owner not having been handed the certificate and the house being registered as a plot with no postcode initially, making it hard to find the file when the LA searches are run.  

They have offered you the indemnity policy because it's the right thing to do.  Once you contact LABC to talk about the house, any indemnity policy would be void - because you've alerted LABC to a potential problem even if there isn't one.  The only solution is being given the certificate or having a house refused a mortgage.  

It makes something appear worse than it is, but you have to trust the process in these circs.    I'll give you another example, totally irrelevant to you, but it shows how insurers make their money.   Back in the day, the indemnity policy to cover something called Chancel Liability was cheaper than the search to find out if there was a Chancel Liability.  If you bought the search and there was a CL, you couldn't have the policy.   They had everyone buying a policy that pretty much no one needed!  

It is your surveyor that you rely on to know the current quality of the house, not the piece of paper.  A lot can happen in four years.  If your survey is good and you have the warranty in hand, I don't think it's a genuine problem.  

As I said before,  you could have a generic conversation to see if the file exists for the estate somewhere under a different address, but there's an argument for letting sleeping dogs lie.  

pinkteapot

Wouldn’t be worried at all for all the reasons Doozer said. I’d be paying much more attention to the survey results. 

We bought a new-build last year and you’ve got me thinking that I couldn’t tell you where my completion certificate is. 

SMR710

You hear people saying they cant sell their house for top dollar because their lean to extension or their loft conversion etc didnt get building control sign off... I'd not buy a house where the whole property cannot provide the certificate. 
Search this board and you'll see loads of problems that arise with regards to this. It might not affect the quality of the house, but still its something that should be provided.

Doozergirl

SMR710 said:

You hear people saying they cant sell their house for top dollar because their lean to extension or their loft conversion etc didnt get building control sign off... I'd not buy a house where the whole property cannot provide the certificate. 
Search this board and you'll see loads of problems that arise with regards to this. It might not affect the quality of the house, but still its something that should be provided.

Funny that, because most of the houses in this country don't have an original completion certificate because they pre-date the regulations and they aren't up to today's standards by any stretch of the imagination.   They weren't
when they were built and they're not hugely better 50, 100
or 200 years down the line.  People have to rely on surveys.  
 

I've gone quite into depth on this post.  I'm afraid that you don't have the first clue what you're talking about.  

People can and do sell their houses for 'top dollar' with indemnity policies.  All day, every day.  

Davesnave

SMR710 said:

Search this board and you'll see loads of problems that arise with regards to this. It might not affect the quality of the house, but still its something that should be provided.

Search any board and you will find newbies, the equivalent of FTBs with limited experience, being put off things. It's normal.

Some listen to advice and learn along the way; others hold up their hands and say "I can't cope with this!" That's fine and normal too. Either way, it's part of the human condition and no big deal.

livh

Thanks all. 

We do think its something that should be provided and believe it’s likely it does exist somewhere. But if it doesn’t it does seem like it could be an issue. There’s a whole page on the LABC.co.uk site (I can’t link it as I’m too new apparently! called ‘Do I need a completion certificate...’ and the page says not having one could be detrimental to the value of the house. What if we want to sell it in future? We don’t want to get caught up in any issues for when we want to move on.

I can understand houses from absolutely years ago not having any sort of certificate but a house that’s four years old... weird.

Anyone seen the story about the new houses in Bradford that weren’t given completion certificates and their homes are apparently worthless? It’s all a bit dodgy. 

We have had a mortgage offer approved, but the lenders don’t know anything about this yet as we’ve only found out this week - Plus there’s a chance they may back out  (yes I know we have this insurance policy offered to us / our lender to ‘protect us in the unlikely event that the Local Authority should take any action for the lack of the certificate’ but we’d rather get to the bottom of finding the completion certificate rather than faffing about with insurance policies). 

Getting the certificate will be assuring and surely make it easier for us to sell in future instead of having to offer insurance policies to the next buyer etc, ...  it’ll be a vicious circle.