The process of buying a new-build property is not necessarily easier than buying an existing property. People think that a brand new property and the absence of a property chain, at least on the part of the seller, simplifies the process, but there are additional complexities such as the developer owning the whole site and therefore selling individual plots. There may also be deadlines for completion, warranty agreements and compliance issues relating to building regulations, the Highways Act and drains and sewers. On top of this, in most cases you are buying something that doesn’t even exist yet.
New-build conveyancing is a specialist legal area, which is why we have put together a checklist to enable you to understand the various stages and what important considerations you need to make.
What is included in the sale?
Your property may not have been built yet, or is in the process of being finished. Often this means you haven’t even properly viewed it, or you may have viewed a ‘showhouse’, which is just an example of what your house ‘might’ look like. You therefore need to establish exactly what is included in the sale, such as the number of lights and sockets, kitchen and bathroom units, carpets, garden features and boundary fences. This information will be discussed and confirmed to you upon reserving the property with the developer.
Check the details of the reservation
A reservation form is an agreement you make with a developer which effectively means they can’t sell an individual plot to anyone else but you, but only for a specific period. Make sure you know what the deadline is and that it is realistic, in terms of the property being built and finished. There will also be a reservation fee to pay, which is dependent on the value of the property and should be taken off the eventual purchase price.
Check the contract pack
You should be issued with a contract pack when the purchase is proceeding, and while this is mainly a list of jobs for your new-build conveyancing solicitors, you should be aware of what needs to be done. This will include investigating the title of the property, checking what restrictive covenants may be in place (usually relating to building extensions, running a business from the property and any parking agreements), carrying out searches, checking planning conditions and confirming who has responsibility for repairs and maintenance of roads and common landscaping areas around the property.
Mortgage
A mortgage offer is usually valid for a specific period. Make sure this will cover the build process and therefore will still be valid when the property is finished and the purchase process will complete. An extension to the mortgage offer may be granted but this is dependent on each individual lender and something a mortgage broker and/or solicitor can discuss with you. In the event that a mortgage offer expires you are able to apply for a new mortgage offer if required.
Exchange
At the point of exchanging contracts with the developer’s solicitor, you will be required to pay the deposit for the property. This may occur before the property is even finished, so make sure you have the funds in place.
Snagging list
There should be provision in the contract to enable you to compile a snagging list. This is where the buyer can itemise any deficiencies in the property for the developer to rectify. This might be items specified in the contract that aren’t fitted or included (such as kitchen or bathroom units), or may be defects such as cracks, installation faults or the position of sockets, which it is agreed is unacceptable. Ideally this should be done before completion to ensure there can be no dispute later about deficiencies once you have moved in.
Completion
A completion date will be set when the building has been signed off by an approved body (i.e. National House-Building Council (NHBC), Local Authority Building Control (LABC), the local authority) and there are no foreseeable delays remaining. The Developer will contact you at this point to book in your final home demonstration and once this has been done a move in date will be discussed with you. In most cases the Developer is required to give at least two weeks’ notice of completion.
Warranty
A new homes warranty pack (i.e. NHBC, LABC) will usually be issued upon completion, and this acts as an insurance policy against issues such as structural damage. In most cases a warranty should be valid for 10 years.
Post-completion
Upon completion of the purchase, you will be required to pay stamp duty land tax, and your solicitor will also be required to register the property on the Land Registry.
Professional new-build conveyancing from Ison Harrison
New-build conveyancing is an area requiring specialist expertise from dedicated new-build conveyancing solicitors. At Ison Harrison we can guide you through this process and make it as smooth and as stress-free as possible, while ensuring you receive a diligent and effective service throughout. So contact our team at Ison Harrison for your new-build conveyancing today.
