New-build properties commonly undergo planning revisions during the development process, meaning the finished product may not fully reflect the initial plans or specifications initially relied upon by homeowners when purchasing. However, this recent case study demonstrates the importance of keeping potential homeowners informed of material changes which may affect their decision to purchase a property. Otherwise, developers run the risk of acting in breach of the New Homes Quality Code (the Code).
What was the complaint?
The homeowner moved into their property, believing at the time that all building work had been completed. However, prior to the homeowner reserving the property, planning permission was granted for the construction of three additional apartments.
The developer did not inform the homeowner of the revised planning position, and the reservation of the property was made without the homeowner having knowledge of any further plans for development.
One of the additional apartments was to be constructed below the homeowner’s property and, once the works commenced, the homeowner reported various disturbances which affected their enjoyment of the property – particularly in respect of noise, vibrations and dust.
Consequently, the homeowner raised a complaint with the New Homes Ombudsman Service (NHOS). This complaint was raised on the grounds that, if the homeowners had been informed of the planning permission, they would have chosen to purchase a different property.
Was the homeowner’s complaint upheld?
The complaint was upheld.
The NHOS held that, although the reservation and contractual documentation did not fix the final construction of the development, the developer nonetheless had obligations under the Code to ensure that potential homeowners were provided with accurate and transparent information to inform their purchases, of which the planning permission was relevant.
Therefore, the NHOS concluded that the lack of transparency caused significant inconvenience, disruption and distress and the homeowner was awarded £1,250 in compensation.
Practical tips for developers
In order to mitigate the risk of homeowners making successful complaints regarding lack of transparency, developers should ensure that:
- any statements or information that the homeowner is relying on prior to reserving and/ or completing the purchase of the property are accurate and recorded;
- they are proactive in updating their materials as soon as possible, particularly, where changes to the development are likely to occur;
- all relevant information is disclosed at reservation and encourage homebuyers to ensure that they have read and understood the information;
- the homeowner is updated and informed in a timely manner of any changes to the development which may impact their decision to purchase the property; and
- any complaints are addressed promptly and in accordance with the developer’s complaints policy and the Code.
For advice on the New Homes Quality Code and/ or policies and procedures, reach out to one of the experts listed below.
