• Menu
  • Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Before Header

  • Home
  • What is LKP
  • Find everything …
  • Contact
Donate

Leasehold Knowledge Management Logo

Secretariat of the All Party Parliamentary Group on leasehold reform

Mobile Menu

  • Home
  • What is LKP
  • Find everything …
  • Contact
  • Advice
  • News
    • Find everything …
    • About Peverel group
    • APPG
    • ARMA
    • Bellway
    • Benjamin Mire
    • Brixton Hill Court
    • Canary Riverside
    • Charter Quay
    • Chelsea Bridge Wharf
    • Cladding scandal
    • Competition and Markets Authority / OFT
    • Commonhold
    • Communities Select Committee
    • Conveyancing Association
    • Countrywide
    • MHCLG
    • E&J Capital Partners
    • Exit fees
    • FirstPort
    • Fleecehold
    • Forfeiture
    • FPRA
    • Gleeson Homes
    • Ground rent scandal
    • Hanover
    • House managers flat
    • House of Lords
    • Housing associations
    • Informal lease extension
    • Insurance
    • IRPM
    • Jim Fitzpatrick MP
    • John Christodoulou
    • Justin Bates
    • Justin Madders MP
    • Law Commission
    • LEASE
    • Liam Spender
    • Local authority leasehold
    • London Assembly
    • Louie Burns
    • Martin Paine
    • McCarthy and Stone
    • Moskovitz / Gurvits
    • Mulberry Mews
    • National Leasehold Campaign
    • Oakland Court
    • Park Homes
    • Parliament
    • Persimmon
    • Peverel
    • Philip Rainey QC
    • Plantation Wharf
    • Press
    • Property tribunal
    • Prostitutes
    • Quadrangle House
    • Redrow
    • Retirement
    • Richard Davidoff
    • RICS
    • Right To Manage Federation
    • Roger Southam
    • Rooftop development
    • RTM
    • Sean Powell
    • SFO
    • Shared ownership
    • Sinclair Gardens Investments
    • Sir Ed Davey
    • Sir Peter Bottomley
    • St George’s Wharf
    • Subletting
    • Taylor Wimpey
    • Tchenguiz
    • Warwick Estates
    • West India Quay
    • William Waldorf Astor
    • Windrush Court
  • Parliament
  • Accreditation
  • [Custom]
Menu
  • Advice
  • News
      • Find everything …
      • About Peverel group
      • APPG
      • ARMA
      • Bellway
      • Benjamin Mire
      • Brixton Hill Court
      • Canary Riverside
      • Charter Quay
      • Chelsea Bridge Wharf
      • Cladding scandal
      • Competition and Markets Authority / OFT
      • Commonhold
      • Communities Select Committee
      • Conveyancing Association
      • Countrywide
      • MHCLG
      • E&J Capital Partners
      • Exit fees
      • FirstPort
      • Fleecehold
      • Forfeiture
      • FPRA
      • Gleeson Homes
      • Ground rent scandal
      • Hanover
      • House managers flat
      • House of Lords
      • Housing associations
      • Informal lease extension
      • Insurance
      • IRPM
      • Jim Fitzpatrick MP
      • John Christodoulou
      • Justin Bates
      • Justin Madders MP
      • Law Commission
      • LEASE
      • Liam Spender
      • Local authority leasehold
      • London Assembly
      • Louie Burns
      • Martin Paine
      • McCarthy and Stone
      • Moskovitz / Gurvits
      • Mulberry Mews
      • National Leasehold Campaign
      • Oakland Court
      • Park Homes
      • Parliament
      • Persimmon
      • Peverel
      • Philip Rainey QC
      • Plantation Wharf
      • Press
      • Property tribunal
      • Prostitutes
      • Quadrangle House
      • Redrow
      • Retirement
      • Richard Davidoff
      • RICS
      • Right To Manage Federation
      • Roger Southam
      • Rooftop development
      • RTM
      • Sean Powell
      • SFO
      • Shared ownership
      • Sinclair Gardens Investments
      • Sir Ed Davey
      • Sir Peter Bottomley
      • St George’s Wharf
      • Subletting
      • Taylor Wimpey
      • Tchenguiz
      • Warwick Estates
      • West India Quay
      • William Waldorf Astor
      • Windrush Court
  • Parliament
  • Accreditation
You are here: Home / Latest News / NHBC controls up to 90% of new build warranties: law professors raise concerns …

NHBC controls up to 90% of new build warranties: law professors raise concerns …

March 6, 2021 //  by Sebastian O'Kelly

Many leaseholders in cladding sites would agree that NHBC is recognised …

Unwitting purchasers of new build property may feel reassured by the ‘NHBC Buildmark Cover’: a warranty provided by the National House Building Council.

In fact, the NHBC is simply a private company limited by guarantee and has no official standing.

It appears that 95 per cent of home purchasers will not have even seen the warranty provisions at exchange of contracts, according to solicitors acting for claimants.

Yet if the building turns out not to have been signed off by its own “NHBC Inspector requirement” claims may fail and consumers will have no idea whether this is the case or not.

The issue is examined in two articles on the Oxford University law faculty website, written by Susan Bright, a land law professor at Oxford, and James Davey, professor of insurance and commercial law at Southampton.

Remediation costs through the NHBC Buildmark Cover (Part 1: Scope)

Purchasers of new homes will generally be supplied with a warranty covering structural defects for a period of 10 years; cover that extends to subsequent owners. The market leader in this respect is the NHBC Buildmark Cover, which claims a 80% market share (but may be as much as 90%).

Regulating the NHBC Buildmark Cover: Part 2

In the first post, we explained the NHBC Buildmark Cover and two particular difficulties that leaseholders faced in claiming under the extended warranty where a failure to comply with building regulations causes dangerous conditions: NHBC’s failure to engage, and denial of liability when building control inspection has not been carried out under NHBC auspices (which we call the ‘NHBC Inspector requirement’).

“NHBC’s Buildmark Cover, used for homes registered from 1 April 2011: that the extended warranty cover during the years 2-10 for non-compliance with building regulations is only available if ‘building control’ (that is, inspection for Building Regulations purposes) was provided by NHBC Building Control Services Ltd (a wholly owned subsidiary of NHBC) or by another company registered with them (we refer to this as the NHBC Inspector requirement) …”

“Anecdotally, it has come as a surprise to many that this cover is not available if building control is carried out by a different inspector, and cover has been turned down for this reason.

“Buyers commit to the purchase on exchange of contracts. At this point they should have been been informed that they will have the NHBC Buildmark cover, but the overwhelming majority will not have seen a copy of the cover policy (anecdotally, the authors have been told by a solicitor acting for claimants in a claim on an insurance policy that more than 95% have not seen the policy by exchange) …”

“On completion, most buyers will be given a copy of the policy, although in practice this may be delayed for several months. Anecdotally, seldom is any explanation or analysis of the policy provided.

“It may be that in high-rise developments the purchaser has used a solicitor recommended by the developer, and concerns have been expressed by both the Law Commission and the CMA about the quality and independence of advice sometimes given by these conveyancers.”

LKP has always argued that a developer-recommended solicitor is reason in itself to choose someone else: developer recommendation of conveyancing solicitors has been a source of repeated scandals – such as highly aggressive doubling ground rents – which we would like to see banned.

Apparently, in commercial law where a corporate player is able to highly influence which solicitor is appointed, the ‘influencer’ is a ‘shadow client’, creating a challenge to professional independence (“more colourfully explained elsewhere as the ‘poodle problem’)”.

In Dependence: The Paradox of Professional Independence and Taking Seriously the Vulnerabilities of Lawyers in Large Corporate Law Firms – UCL Discovery

Oakley, E; Vaughan, S; (2019) In Dependence: The Paradox of Professional Independence and Taking Seriously the Vulnerabilities of Lawyers in Large Corporate Law Firms. Journal of Law and Society , 46 (1) pp. 83-111. 10.1111/jols.12143.

The professors are not happy:

“The NHBC was absolutely entitled to require that a properly issued Final Certificate was in place before agreeing to cover losses from defects. This limits the risk.

“It is much less obviously entitled to reject claims where an equally qualified inspector issued the certificate.

“The purchaser is often not aware of the NHBC Inspector requirement or whether it has been complied with. As a matter of simple fairness, reliance on precise contractual limits in these circumstances might be ill advised.”

On the other hand, aggrieved new build purchasers might not even learn that this is the reason why NHBC is not responding to their correspondents.


Excellent briefing on cladding scandal from Local Government Association:

Supporting residents who have been affected by cladding issues

This Local Government Association (LGA) briefing is aimed at ward councillors supporting residents in their local areas. It explains the background to the cladding scandal, highlights issues facing residents, and sets out ways in which councillors might support them.


The two professors write:

“Another not uncommon response appears to be that the warranty providers simply don’t respond to claims being made; indeed, in at least two instances the insured parties have resorted to issuing High Court proceedings in the face of alleged silence from NHBC.”

The article references Estuary Housing Association suing NHBC last September for £3.6 million over an eight-storey cladding site in East London that was in “imminent danger”.

The housing association wrote several times to NHBC in 2019, but received no response at all, it claimed.

Now it is seeking damages from NHBC for breach of policies.

The site has external walls finished with synthetic render and polystyrene insulation, both of which are combustible. And the floors do not have cavity breaks, meaning fire can easily spread, according to the particulars of claim.

Read more at:

Building Inspector Faces £3.6M Bill Over Unsafe Tower Block – Law360

A housing association has sued a building inspection company for £3.6 million ($4.6 million) for allegedly failing to pay out under property cover to fix “imminent danger” to residents of an eight-story apartment block in East London amid concerns about fire safety failings.

Related posts:

NHBC accepts Grenfell cladding bill at Galliard’s New Capital Quay (Galliard v NHBC v the Government v Cladding suppliers) v the Leaseholders New Capital Quay cladding may cost £7-10m, while NHBC sends in experts – and libel warning to BBC cladding Tory donorsOnly seven cladding sites in Tory constituencies … as Build! Build! Build! developers pour in party donations Cestrian CourtPensioners in retirement housing face £150,000 fire safety bill, but McCarthy and Stone isn’t reponsible (nor is FirstPort, and NHBC hasn’t responded)

Category: Cladding scandal, Latest News, NewsTag: NHBC, Professor James Davey, Professor Susan Bright

Latest Tweets

Tweets by @LKPleasehold

Mentions

Anthony Essien (34) APPG (36) ARMA (86) Bellway (30) Benjamin Mire (32) Cladding scandal (70) Clive Betts MP (31) CMA (42) Commonhold (51) Competition and Markets Authority (37) Countryside Properties plc (32) FirstPort (36) Forfeiture (29) Grenfell cladding (55) Ground rents (51) James Brokenshire MP (31) Jim Fitzpatrick (35) Jim Fitzpatrick MP (30) Justin Bates (38) Justin Madders MP (62) Katie Kendrick (35) Law Commission (59) LEASE (66) Leasehold Advisory Service (62) Leasehold houses (32) Long Harbour (44) Martin Boyd (78) McCarthy and Stone (39) National Leasehold Campaign (38) Persimmon (49) Peverel (61) Property tribunal (49) Redrow (29) Retirement (37) Robert Jenrick (33) Roger Southam (47) Sajid Javid (38) Sebastian O’Kelly (55) Sir Peter Bottomley (197) Taylor Wimpey (104) Tchenguiz (33) The Guardian (32) The Times (31) Vincent Tchenguiz (40) Waking watch contracts (40)
Previous Post: «Canary Gateway Barrister Justin Bates torpedoes another RTM for Moskovitz / Gurvits: leaseholders face £100,000 bills
Next Post: Pensioner loses £130,000 to escape Roseland Parc Retirement Village. But it is worth it, she says … Rosleand Parc Retirement Village»

Above Footer

Advising leaseholders. Avoiding disasters.
Stopping forfeiture. Exposing abuses. Urging reform.

We depend on individuals for the majority of our funding.

Support Us and Donate

LKP Managing Agents

Become an LKP Managing Agent

Common Ground
Adam Church
Blocnet property management2

Stay in Touch

To achieve victory in the leasehold game where you are playing against professionals and with rules that they know all too well - stay informed with the LKP newsletter.
Sign Up for Newsletter

Professional Directory

The following advertisements are from firms that seek business from leaseholders.
Click on the logos for company profiles.

Footer

About LKP

  • What is LKP
  • Privacy and data

Categories

  • News
  • Cladding scandal
  • Commonhold
  • Law Commission
  • Fleecehold
  • Parliament
  • Press
  • APPG

Contact

Leasehold Knowledge Partnership
Open Data Institute
5th Floor
Kings Place
London N1 9AG

sok@leaseholdknowledge.com

Copyright © 2022 Leasehold Knowledge Partnership | All rights reserved
Leasehold Knowledge Partnership Limited (company number: 08999652) is a company limited by guarantee that is a registered charity (number: 1162584) with the Charities Commission.
LKP website is hosted at no charge by www.34sp.com
Website by Callia Web