The New Homes Quality Board (NHQB) emphasises the importance of being transparent about incentives, since unclear explanations can create confusion about fees and payments. Any lack of clarity may also cause delays when communicating defect resolutions.
This NHQB case study demonstrates how poor communication between a developer and homeowner can erode trust during updates on resolving defects, especially when incentives are not explained clearly. In this instance, these issues led the homeowner to raise a complaint with the New Homes Ombudsman. The Ombudsman recognised the delays, lack of clarity around incentives, and poor communication, and partially upheld the complaint – finding that, even though the homeowner knew about the agreed incentive, several defect issues were not promptly addressed.
What was the complaint?
The homebuyer agreed a part-exchange deal in which the developer would take care of estate agency fees once legal completion occurred.
As part of an incentive package, the homebuyer received £6,336 for estate agency fees according to the scheme’s terms and conditions. However, a complaint was made claiming that the developer did not properly explain that these fees would be taken from the overall incentive amount, rather than being paid separately in full. The homebuyer felt that there had been a lack of clarity when the incentive amount had been outlined by the developer.
Following completion, the homeowner discovered defects that the developer had already identified in an earlier inspection but not addressed.
Despite ongoing remedial work to the property, the homeowner expressed concern regarding delays, communication, and the management of their complaint. As a result, the issue was escalated to the Ombudsman for further review.
The developer expressed regret regarding the delays in completing the remedial work, stating that all acknowledged defects have been addressed either through remediation or suitable financial compensation. Furthermore, it was noted that the homeowner received total incentives exceeding 5 per cent at the time of property reservation.
Was the homeowner’s complaint upheld?
The homeowner’s complaint had been partially upheld.
The Ombudsman examined the part-exchange and reservation agreement and determined that the homeowner was adequately informed that the developer would pay the estate agency fees as part of the agreed incentive. The complaint was not upheld as there was no proof of misleading information or incorrect deductions.
As to the snagging issues, some were resolved quickly but others were inadequately handled. The developer lacked consistent updates, resulting in about 40 per cent of issues exceeding expected timelines. This aspect of the complaint was upheld.
The Ombudsman made an award of £12,028 in total, which included compensation in relation to plastering and painting, flooring, a granite worktop and cleaning, as well as an additional sum for the inconvenience and distress resulting from substandard workmanship, disruption and delays.
Furthermore, the developer’s complaints handling process was considered inefficient due to extended response times, resulting in an additional award to the homeowner.
Practical tips
To reduce complaints about estate agency fees and delays with snagging between developers and homeowners:
- Ensure incentives are explained clearly and openly. Even if the terms are set out in writing, vague or confusing explanations can still result in misunderstandings about fees and payments.
- Responding promptly to homeowner complaints demonstrates a commitment to good service and helps build trust, reassuring the homeowner that their concerns are being taken seriously, even if a resolution has not yet been reached.
- The developer must ensure incentives are explained clearly and openly. Even if the terms are set out in writing, vague or confusing explanations can still result in misunderstandings about fees and payments.
