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New Build Warranty Responsibilities for Developers

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The priorities for any residential property developers working on a new build project are always going to be centred around constructing and finishing high-quality homes that meet the required specification, budget and timeline.

An essential consideration is also the New Build Warranty that will be needed before the property can be sold, as it’s usually a requirement of any mortgage lender that this kind of policy is in place. Here, we look at the responsibilities of the developer regarding the new build warranty, and what they need to take into account even when the project has been completed and the property sold.

Most new build warranties will be structured so that the first two years covers any builder’s defects (i.e. snags) and the property is covered for 10 years for serious structural defects that come to light which require remedial work. A new build warranty will not cover what is considered ‘wear and tear’, or issues that result from the property not being maintained appropriately. Weather damage will also not be covered.

Before a new build warranty is issued on a property, the warranty provider will ensure that the building meets their standards. This is usually done by carrying out key stage inspections during the construction process, but can be done once the building is completed.

As a developer, the responsibilities include ensuring that there is a new build warranty in place before sale. You’ll also be responsible for organising and fulfilling the initial two years of builder’s defect cover, if required.

If there are serious structural issues identified, as the developer, you usually remain responsible for rectifying this, although the work required is generally paid for by the warranty provider.

If you’d like to find out more about your options for a new build warranty on a current or future project, get in touch with us for assistance.

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Advantage Home Construction Insurance (AHCI) provides structural defects insurance – operating nationally with offices in Warrington, London and Birmingham – offering development-related insurances and a service designed to give customers peace of mind.

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