New Rights for House Buyers

Those who buy new homes ‘off plan’ now have significant new protection under the Consumer Code for Home Builders, which came into affect on 1 April 2010.

The Code requires builders of houses to keep buyers informed of the progress of the construction work. It specifically requires builders to provide ‘reliable and realistic’ information regarding completion of the construction, handover dates and the date on which the completion of the contract for purchase may be expected.

Buyers must also be advised that they have the right to withdraw from the purchase if there is an unreasonable delay in completing the construction of the home and serving the notice to complete. The Code sets out a standard form of wording for use in such circumstances. The delay in completion beyond the date originally stipulated by the builder that allows the buyer to withdraw is no more than six months for houses and twelve months for flats, where contracts are exchanged before the building is weatherproof. If contracts are exchanged at an advanced stage of construction, the buyer has the right to terminate the contract after a delay of no more than two months for houses or four months for flats.

Sarah Evans, SMR Solicitors

Lease Extensions

The 1993 Leasehold Reform Housing and Urban Development Act (as amended) gives a flat owner the right to extend their lease so long as they have owned the flat for at least 2 years.
The Act lays down a procedure summarised as follows:

  • the flat owner serves an initial notice on the landlord stating what the flat comprises, details of the lease and the price offered
  • within two months the landlord is required to serve a counter notice acknowledging the flat owner’s right to a lease extension
  • if there is a dispute over the price, the flat owner then has six months within which they can apply to the Leasehold Valuation Tribunal (LVT) who will determine the price to be paid *
  • once the price has been agreed a variation to the lease is dealt with by the solicitors

Within the six months mentioned above * the first two months are set aside as a cooling off period designed to get the valuers for both parties together to see if an agreement on price can be reached. 90% of the time a compromise is reached.

Once the lease has been extended the flat will have a higher value as there is a long lease with no ground rent payable.

The secret of success is getting the procedure right as if a bad notice is served or the time restraints are not complied with, the flat owner will then be barred from taking further action for another 12 months.

Sarah Evans, SMR Solicitors