Who's responsible for defects in a New-build home ?

Usjes

Hi,

I'm looking to buy a house in Dublin, the helpful 'buying a home guide' on the interwebs suggests that for second hand homes you get a survey done but that for newly built homes the builder will usually register the build with an Insurance scheme like Homebond so that if any structural issues arise in the first 10 years you will be covered.
Looking at a new-build today I asked if it was registered with Homebond and they said no, but that it was covered under the '2014 regulations' and did imply that this would cover structural defects. They basically said that Homebond had declined in popularity since they failed to payout on the pyrite problems and that they rely on the 2014 regulations instead nowadays.

Does this sound normal ? Or would it be a concern that the build wasn't registered specifically with Homebond or similar ? Do the '2014 regulations' effectively give you cover against structural defects in the first 10 years, or over some defined time ? Are these the sort of details that my solicitor would check out if I do put in an offer and its accepted ?

Thanks,

Usjes

DOCARCH

Usjes wrote: »

Do the '2014 regulations' effectively give you cover against structural defects in the first 10 years, or over some defined time?

No!

That is unless you are prepared to fork out money and sue somebody!

Only small comfort is that under the 2014 Regulations (BCAR), in theory, some professional should have carried out inspections on the house, during the build, and certified the build.

Under Homebond/prior to BCAR, it would be very unusual for a professional to carry out any inspections on the house, during the build. The builder was not obliged to have anybody inspect their work!

Usjes

DOCARCH wrote: »

No!

That is unless you are prepared to fork out money and sue somebody!

Only small comfort is that under the 2014 Regulations (BCAR), in theory, some professional should have carried out inspections on the house, during the build, and certified the build.

Under Homebond/prior to BCAR, it would be very unusual for a professional to carry out any inspections on the house, during the build. The builder was not obliged to have anybody inspect their work!

So how does it normally work nowadays ? Do people buying new houses just rely on the certification? Or do some builders still register with Homebond and others not, in which case it might be wise for the buyer to register with Homebond themselves ?

Metric Tensor

The purchaser won't be able to register the house with Homebond. Either the builder does it or he doesn't. The builder basically decides if he can get more money for the house if he registers it with Homebond and if he doesn't think it will increase his profit margin he doesn't bother.

In a sense they are correct that Homebond tried so hard to avoid payouts during the downturn that they have fallen quite a lot from their peak but they have tried to counter this by offering a slightly different type of insurance nowadays.

As DOCARCH says the 2014 regulations don't provide a solution to fixing defects any further than providing you with a longer list of names of you decide to sue someone.

It is also worth looking at exactly what defects are covered by Homebond or similar insurances - you might be surprised at how little is actually covered.

Usjes

Metric Tensor wrote: »

Either the builder does it or he doesn't.

Okay, so it sounds like it is a normal enough scenario to buy a new-build that hasn't been registered. So while I do still think it is bizzare that the largest purchase of your life could end up being bulit out of plasticine and un-insured I guess the absence of insurance shouldn't be considered a red flag for a house hunter.

Thanks,

Usjes.

Metric Tensor

Woooahhhh there!!!!

That's taking a blinkered interpretation of what I said.

It would be uncommon for a house in a housing estate not to have some form of guarantee and in my experience 50/50 for one offs. BUT I would strongly recommend you request/demand/force the builder to get it. (Of course if the house is in Dublin then he can tell you to F off and sell it to the next punter in which case you'll have to make the decision - as you said this is the largest purchase of your life.)

Also the absence of insurance should be considered a red flag.

Just be aware that if/when a house does have this type of insurance its usefulness is questionable! e.g. A lot of the pyrite affected houses were nominally covered by insurance schemes! On the flip side I have seen structural insurance companies pay for fixing subsidence problems and other faulty workmanship - so it can pay off too.

Demand it through your solicitor and don't take any fob off about BCARs or 2014 Building Control rules. But if the vendor says no you have a difficult decision to make.

DOCARCH

Metric Tensor wrote: »

Demand it through your solicitor and don't take any fob off about BCARs or 2014 Building Control rules. But if the vendor says no you have a difficult decision to make.

Agreed....having Homebond, or a similar insurance, in place on a new house is much better than nothing, and, certainly far better than relaying on BCAR to sort out any future issues!

Usjes

Metric Tensor wrote: »

It would be uncommon for a house in a housing estate not to have some form of guarantee and in my experience 50/50 for one offs.

Well it is in Dublin city and it is 3 houses on a small infill site, the first was put on the market 6 months ago and sold in Mach. Then the one I'm looking at came on and the final one is attached to it and is allegedly being kept by the builder for themselves, this could of course be a lie and they may be releasing them one at a time to try to maximize the price for each.
Anyway, I would say this puts it more in the one-off category in which case you are guessing that it would have a 50/50 chance of being insured, so again this suggests that it wouldn't be considered too unusual to buy under such conditions.
Do you know what the cost of this type of insurance is ? Is it a flat fee or a %age of the house value ? It was stated above that the purchaser cant get it insured but it seems like effectively I can, ie. I demand it be insured and the vendor demands an increased asking price! So, I'm wondering what this extra amount is because the house already has a bid on it which I would be planning to offer above. But if the existing bidder is willing to buy without the insurance then my bid will have to exceed his by at least the cost of the insurance if the vendor is to consider me. So, any ideas what this should cost ?
Also, I'm curious, if this is that important is this not the sort of thing that my solicitor should be looking into anyway ? I just find it a bit odd that the suggestion is that I ask my solicitor to demand it because it is blind luck that I know there is such a thing as Homebond, I would just have told my solicitor I wanted to bid on the house and expected them to be the expert in property transactions and check all the details are in order an notify me of any deficiencies...