New build warranty cancelled before exchange - grateful for any help!

Culprit12

Hi all - 

I'm buying a new build using HTB. All checks came back and we're ready to exchange (we also got the authority to exchange from HTB). However, just before exchange we're informed the 10-year home warranty the developer had in place got cancelled (the developer failed to complete on time and the original provider, who was one of the reputable warranty providers in the market, invoked cancellation clauses).

The developer is now offering a new house warranty with a different provider. The problem is that I looked online and the new provider doesn't seem to be ''reputable'' by any means. I looked at their filling history and they're incorporated three years ago, they've only a one officer (Director) with assets well below £200k. The warranty also doesn't cover insolvency.

Solicitors (recommended by developers - I know, a big mistake) said they'll look at the policy.

I have mainly three questions for you all:

1. Does the solicitor have to confirm the suitability of the new warranty with my lender and HTB? My concern here is they don't check with lender/HTB, we exchange contracts and then our lender rejects the warranty, and I lose my life-savings.
2. Can I negotiate an alternative warranty provider and does this change affect the value of the property?
3. What if the new provider goes bust? Are we still protected?

I'd be extremely grateful for any advise. 

Gycraig

They generally aren’t worth the paper they are written on and cover sweet naf all when it comes to claiming. 

Most will have terrible reviews in reality when you search them. 

Culprit12

Gycraig said:

They generally aren’t worth the paper they are written on and cover sweet naf all when it comes to claiming. 

Most will have terrible reviews in reality when you search them. 

Needless to say the warranty is not included in our lender's handbook.
Am I correct to assume that pulling out is the only wise decision?

Alter_ego

Most house transactions are completely without warranty. It's usually "Caveat emptor"

user1977

If your lender doesn't accept the warranty then you won't have the money to buy, so you don't have much choice in the matter (other than perhaps find a different lender).

housebuyer143

While the warranty is basically worthless, I believe the lender needs to sign off on them, so I would check with them before exchanging.

Culprit12

user1977 said:

If your lender doesn't accept the warranty then you won't have the money to buy, so you don't have much choice in the matter (other than perhaps find a different lender).

Well, I don't think the lender has been informed at this stage. However, looking at the lender's handbook I don't see the new warranty on the list of acceptable providers. In fact, the new warranty isn't accepted by any lender out there...

Can we negotiate an alternative warranty or this is unheard of?

user1977

Culprit12 said:

user1977 said:

If your lender doesn't accept the warranty then you won't have the money to buy, so you don't have much choice in the matter (other than perhaps find a different lender).

Well, I don't think the lender has been informed at this stage. However, looking at the lender's handbook I don't see the new warranty on the list of acceptable providers. In fact, the new warranty isn't accepted by any lender out there...

Can we negotiate an alternative warranty or this is unheard of?

You can ask, I've no idea what the response is likely to be - but if no lenders accept the warranty then they're going to have trouble shifting the properties otherwise...

Culprit12

user1977 said:

Culprit12 said:

user1977 said:

If your lender doesn't accept the warranty then you won't have the money to buy, so you don't have much choice in the matter (other than perhaps find a different lender).

Well, I don't think the lender has been informed at this stage. However, looking at the lender's handbook I don't see the new warranty on the list of acceptable providers. In fact, the new warranty isn't accepted by any lender out there...

Can we negotiate an alternative warranty or this is unheard of?

You can ask, I've no idea what the response is likely to be - but if no lenders accept the warranty then they're going to have trouble shifting the properties otherwise...

That's what I thought, too. 

Does any know if solicitors are obliged to report such info to lenders or it's at their discretion to assess the suitability of a warranty (even if it's not listed on the approved list)? 

If they fail to report before exchange and I proceed ... I will lose my deposit...

user1977

Culprit12 said:

user1977 said:

Culprit12 said:

user1977 said:

If your lender doesn't accept the warranty then you won't have the money to buy, so you don't have much choice in the matter (other than perhaps find a different lender).

Well, I don't think the lender has been informed at this stage. However, looking at the lender's handbook I don't see the new warranty on the list of acceptable providers. In fact, the new warranty isn't accepted by any lender out there...

Can we negotiate an alternative warranty or this is unheard of?

You can ask, I've no idea what the response is likely to be - but if no lenders accept the warranty then they're going to have trouble shifting the properties otherwise...

That's what I thought, too. 

Does any know if solicitors are obliged to report such info to lenders or it's at their discretion to assess the suitability of a warranty (even if it's not listed on the approved list)? 

If they fail to report before exchange and I proceed ... I will lose my deposit...

Lenders don't give the solicitors discretion about it, they'll have their approved list of warranty providers and will stick to it.

julicorn

Culprit12 said:

user1977 said:

Culprit12 said:

user1977 said:

If your lender doesn't accept the warranty then you won't have the money to buy, so you don't have much choice in the matter (other than perhaps find a different lender).

Well, I don't think the lender has been informed at this stage. However, looking at the lender's handbook I don't see the new warranty on the list of acceptable providers. In fact, the new warranty isn't accepted by any lender out there...

Can we negotiate an alternative warranty or this is unheard of?

You can ask, I've no idea what the response is likely to be - but if no lenders accept the warranty then they're going to have trouble shifting the properties otherwise...

That's what I thought, too. 

Does any know if solicitors are obliged to report such info to lenders or it's at their discretion to assess the suitability of a warranty (even if it's not listed on the approved list)? 

If they fail to report before exchange and I proceed ... I will lose my deposit...

Your solicitor works for both you and the lender. They won't let you exchange unless they believe that the lender is satisfied and willing to lend you the funds.