Leaking hot water tank in New Build. Who should pay?

InternetKing

Hi. Thanks in advance for reading.

I moved into a new build house 18 months ago and recently noticed that the hot water tank is leaking. I contacted the builder who sent back the plumber who installed it who diagnosed a fault with tank which now needs to be replaced. (~£800 for the new tank plus a few hundred more for labour)

On reading the 10 year warranty that came with the house, it mentions all defects should be fixed by the builder during the first 2 years but plumbing systems are specifically excluded so no help here.

The builder has now washed his hands with the matter and suggests that we follow up with the tank manufacturer to claim on their 25 year warranty. However, this warranty does not cover labor costs only the cost of the new tank (if their investigation finds it was due to a manufacturing fault). It is also a requirement to service the tank every 12 months which wasn't done by the builder and sadly we've not done either. ( We've got the boiler done, but never knew that was a separate requirement!)

Finally: My home insurance includes home emergency cover but from reading T&C's neither part will cover this situation.

My questions:

• Since my contract is with the builder, can I insist that they fix this and THEY attempt to claim on the warranty if possible? (Could we claim the exclusion of plumbing from warranty coverage is "unfair"?)

• Can the tank manufacturer really insist on the 12 month servicing as a requirement for claiming on the warranty? (Given the tank was installed less than 2 years ago and the failure highly unlikely to be related to the lack of servicing)

• What would you do in this situation? Just give up and eat the cost or is there some sensible action to be taken? (Feels wrong for us to have to spend up to £1500 on an 18 month old property!)

Many thanks for any advice

eddddy

InternetKing said:

• Since my contract is with the builder, can I insist that they fix this and THEY attempt to claim on the warranty if possible? (Could we claim the exclusion of plumbing from warranty coverage is "unfair"?)

You could only insist that the builder fix the tank, if there is a term in the contract that says they will fix the tank.

The builder's warranty is part of the contract - and usually builder's 2 year warranties cover plumbing. Have you read through your warranty to make sure the tank/plumbing really is excluded?

(And for example, does the builder's warranty say something like "plumbing is excluded" or "all parts of the heating and hot water system are excluded"?  If it just says "plumbing", you might be able to argue that the tank itself has failed - there is no problem with the plumbing that it is connected to.

It depends on the precise wording of the builder's warranty. And whether the builder's warranty requires you to service the tank etc.)


And houses are explicitly excluded from Consumer Rights act protection, so that won't help you - assuming the tank was part of the house purchase contract. But if, for example, you bought the tank as an optional upgrade via a separate contract, you might have CRA protection.


It's very hard to argue that house purchase contract terms are unfair - because you have a solicitor to advise you on the terms of the contract.

If you really wanted to go down that route, you might make a claim against your solicitor for negligence - because your solicitor failed to highlight to you that the warranty excluded plumbing. (But I'm not sure that's a route I would try!)

InternetKing

eddddy said:

InternetKing said:

• Since my contract is with the builder, can I insist that they fix this and THEY attempt to claim on the warranty if possible? (Could we claim the exclusion of plumbing from warranty coverage is "unfair"?)

You could only insist that the builder fix the tank, if there is a term in the contract that says they will fix the tank.

The builder's warranty is part of the contract - and usually builder's 2 year warranties cover plumbing. Have you read through your warranty to make sure the tank/plumbing really is excluded?

(And for example, does the builder's warranty say something like "plumbing is excluded" or "all parts of the heating and hot water system are excluded"?  If it just says "plumbing", you might be able to argue that the tank itself has failed - there is no problem with the plumbing that it is connected to.

It depends on the precise wording of the builder's warranty. And whether the builder's warranty requires you to service the tank etc.)


And houses are explicitly excluded from Consumer Rights act protection, so that won't help you - assuming the tank was part of the house purchase contract. But if, for example, you bought the tank as an optional upgrade via a separate contract, you might have CRA protection.


It's very hard to argue that house purchase contract terms are unfair - because you have a solicitor to advise you on the terms of the contract.

If you really wanted to go down that route, you might make a claim against your solicitor for negligence - because your solicitor failed to highlight to you that the warranty excluded plumbing. (But I'm not sure that's a route I would try!)

Thanks for this! It is a new home warranty with a company called BuildZone.

The exact phrase from the contract is below:

"Section 4.1: Defects Insurance Period (Years 0-2)

If, during the Defects Insurance Period, the Insured notifies the Developer of any Defect, the

Developer is required to

i) Effect a repair, replacement or rectification of such Defect as soon as practicably

possible;

ii) Reimburse the Insured for all costs including lifting and refitting carpets, storage and

alternative accommodation should the nature of any repair, replacement or rectification

be such that the Insured and/or the occupants have to vacate the Housing Unit(s) whilst

such repair, replacement or rectification Work is carried out."

..... extra irrelevant details ......

"Exclusions applicable to Section 4.1

The Insurer(s) will not be liable to the Insured for any:

i) Dampness, condensation or shrinkage not caused by a Defect;

ii) Defect to the central heating system(s) and associated pipework, fitted appliances or

plumbing Works
iii) .....many other irrelevant things....

Defect is defined as:A failure to comply with, for example the following:-

• The current Building Regulations in England and Wales;

Failure to follow the standards within the Building Regulations and Building Standards, or associated guidance,

does not in itself amount to a Defect, as it may be possible to meet the recommended performance in other ways.

For any Housing Unit(s) under this Policy which relates to the conversion, refurbishment, renovation or

extension of a New Development, the definition of Defect shall only be deemed to include any of the Works

carried out by the Builder as part of the conversion, refurbishment, renovation or extension.

RefluentBeans

InternetKing said:

eddddy said:

InternetKing said:

• Since my contract is with the builder, can I insist that they fix this and THEY attempt to claim on the warranty if possible? (Could we claim the exclusion of plumbing from warranty coverage is "unfair"?)

You could only insist that the builder fix the tank, if there is a term in the contract that says they will fix the tank.

The builder's warranty is part of the contract - and usually builder's 2 year warranties cover plumbing. Have you read through your warranty to make sure the tank/plumbing really is excluded?

(And for example, does the builder's warranty say something like "plumbing is excluded" or "all parts of the heating and hot water system are excluded"?  If it just says "plumbing", you might be able to argue that the tank itself has failed - there is no problem with the plumbing that it is connected to.

It depends on the precise wording of the builder's warranty. And whether the builder's warranty requires you to service the tank etc.)


And houses are explicitly excluded from Consumer Rights act protection, so that won't help you - assuming the tank was part of the house purchase contract. But if, for example, you bought the tank as an optional upgrade via a separate contract, you might have CRA protection.


It's very hard to argue that house purchase contract terms are unfair - because you have a solicitor to advise you on the terms of the contract.

If you really wanted to go down that route, you might make a claim against your solicitor for negligence - because your solicitor failed to highlight to you that the warranty excluded plumbing. (But I'm not sure that's a route I would try!)

Thanks for this! It is a new home warranty with a company called BuildZone.

The exact phrase from the contract is below:

"Section 4.1: Defects Insurance Period (Years 0-2)

If, during the Defects Insurance Period, the Insured notifies the Developer of any Defect, the

Developer is required to

i) Effect a repair, replacement or rectification of such Defect as soon as practicably

possible;

ii) Reimburse the Insured for all costs including lifting and refitting carpets, storage and

alternative accommodation should the nature of any repair, replacement or rectification

be such that the Insured and/or the occupants have to vacate the Housing Unit(s) whilst

such repair, replacement or rectification Work is carried out."

..... extra irrelevant details ......

"Exclusions applicable to Section 4.1

The Insurer(s) will not be liable to the Insured for any:

i) Dampness, condensation or shrinkage not caused by a Defect;

ii) Defect to the central heating system(s) and associated pipework, fitted appliances or

plumbing Works
iii) .....many other irrelevant things....

Defect is defined as:A failure to comply with, for example the following:-

• The current Building Regulations in England and Wales;

Failure to follow the standards within the Building Regulations and Building Standards, or associated guidance,

does not in itself amount to a Defect, as it may be possible to meet the recommended performance in other ways.

For any Housing Unit(s) under this Policy which relates to the conversion, refurbishment, renovation or

extension of a New Development, the definition of Defect shall only be deemed to include any of the Works

carried out by the Builder as part of the conversion, refurbishment, renovation or extension.

Seems like it is in deed excluded. In all honesty I’m not sure how consumer rights relate to house buying. 

But to answer your other questions - yes the warranty can insist on a service every 12 months. Warranties are on top of your rights and do not take away from your rights. They can be as comprehensive or restrictive as they want really. So requesting a service every 12 months will likely be allowed.

It may be worth posting in the housing section of the forum - they will have people who have experienced similar issues. But there may be a few people here who will be able to quote sections of law to help you. 

Warranties are often all PR related - good to close the sale to know that ‘we’re here to help if anything goes wrong in the next 5 years’. But they often have restrictions in place to make it harder to claim - I think this is especially true in houses and stuff.

eddddy

RefluentBeans said:

In all honesty I’m not sure how consumer rights relate to house buying. 
....
....
But there may be a few people here who will be able to quote sections of law to help you. 

Here's the key extract from the Consumer Rights Act 2015....

38.Subsection (8) sets out another key definition: the meaning of “goods”. This derives from Article 2(3) of the CRD.

Essentially “goods” means anything physical which you can move (“any tangible moveable item”). Therefore, Chapter 2 of Part 1 of the Act (the goods Chapter) does not apply to purchases of immovable property such as land or a house.

Link: https://www.legislation.gov.uk/ukpga/2015/15/notes/division/3

So a house is not "goods" - so consumer protections relating to "goods" do not apply to houses.

ComicGeek

I read that exclusion as being that the warranty insurer is not liable, but that doesn't normally exclude the builder/developer from being liable for this type of defect within the 1st 2 years after completion.

The warranty insurer is only covering structural items, excluding plumbing specifically because it should be covered by the builder. After the 1st 2 years the plumbing isn't covered by the warranty or builder.

What you need to find is what the builder/developer's responsibility is within the 1st 2 years within your contract - not the warranty insurer.

What actually has failed on the cylinder though? Would be very rare for the cylinder to need replacing, normally it's the pressure relief valves that fail and can be replaced.

CardinalWolsey

I would argue that it is covered, because of their own definition of "defect":

Defect is defined as:

A failure to comply with, for example the following:-
does not in itself amount to a Defect, as it may be possible to meet the recommended performance in other ways.

• The current Building Regulations in England and Wales;

Failure to follow the standards within the Building Regulations and Building Standards, or associated guidance,

So in this instance, there is not a defect with the water tank, but a failure of it. A defect would be that it had not been installed in compliance with building regs.

Have you spoken with the warranty provider?

ComicGeek

CardinalWolsey said:

I would argue that it is covered, because of their own definition of "defect":

Defect is defined as:

A failure to comply with, for example the following:-
does not in itself amount to a Defect, as it may be possible to meet the recommended performance in other ways.

• The current Building Regulations in England and Wales;

Failure to follow the standards within the Building Regulations and Building Standards, or associated guidance,

So in this instance, there is not a defect with the water tank, but a failure of it. A defect would be that it had not been installed in compliance with building regs.

Have you spoken with the warranty provider?

Normally the insurer's warranty is only a structural warranty, and doesn't cover anything to do with plumbing or electrical works. Those would normally be covered by the builder's own wider 2 year warranty, on the basis that any issues with the original build would likely become apparent within the 1st 2 years of occupation.

But worth raising with the warranty provider to see whether they can nudge the builder into action.