Residential Newsletter - Autumn 2022

Residential Reflections

Each quarter, we ask our experts in the Residential Conveyancing team to reflect on an interesting piece of news, work or a case within their sector. In this edition of the Residential Newsletter, we consider fixtures and chattels: “As part of a residential conveyancing transaction, sellers are required to complete a 'Fixtures and Contents Form' listing items they will remove from, or leave at, the property on the day of completion. Without this form, disputes between sellers and buyers could arise - the law requires sellers to leave what are termed 'fixtures' at the property and remove what are termed 'chattels' but applying the law to practice is not always crystal clear. What is the most unusual item a seller has sought to remove from a property and what was the backstory?"

Caroline Wofinden, Director and Head of New Build & Social Housing (Nottingham) “A friend purchased a house many years ago, for which the Fixtures and Contents Form was completed by the sellers in the usual way - nothing unusual being left or taken. However, when they moved into the house the sinks had been removed in both bathrooms and the kitchen. When contacted about this, the sellers said they were very fond of them and couldn't bear to leave them as they had some good memories attached...”

Rebecca Maeers, Director and Head of Residential Property (Nottingham)“Not really a strange situation but a practical point...“I've dealt with a couple of sales with 'owned' (rather than leased) solar panels and the energy companies wanted specific confirmation that the solar panels were included in the sale to my clients before they would transfer the Feed-In Tariff payments. I therefore always make sure that solar panels are added to the Fixtures and Contents Form now - just in case even though it seems obvious(!)”

Sarah Major, Senior Associate (Manchester)“My experiences of dealing with fixtures and fittings involve the removal of a fitted bookcase from the property leaving exposed brick, and an argument over a washing line! I also dealt with a property a while ago that had a body buried in the grounds with rights of access in the title - that obviously remained there and wasn't really up for negotiation!”

Claire Yarrow, Associate (Sheffield)“From my transactions, Koi Carp and an antique door knocker are probably the most unusual items to be excluded on a fixtures and fittings form - I do not recall there being any issue with this but they were slightly more unusual than the norm!”

Strengthened protections for buyers of new homes

Launched on 4 October 2022 by the New Homes Quality Board (Board), a new framework consisting of the New Homes Quality Code of Practice (New Code) and an independent New Homes Ombudsman Service (NHOS) will address gaps within the existing regime, protecting buyers of new build homes from developers who are registered with the Board (Registered Developers) throughout the sale process.

The framework mandates a higher standard of build quality and customer service by Registered Developers and provides a better opportunity for buyer redress where these fall below the required threshold.

How do protections under this new framework differ from those under the existing Consumer Code for Home Builders?

The new framework addresses gaps in the existing regime. It protects buyers from the moment they walk into the sales office to two years after the purchase of their new home setting out requirements developers must meet at the following four stages in the process of selling a new home:

• sales and marketing;
• legal documents, pre-completion inspection, completion and general information provided;
• post-sale service to include responses to any complaint raised by a buyer; and
• what happens if a developer becomes insolvent.

The New Code mandates a comprehensive post-sale service requiring developers to resolve urgent issues immediately (e.g. leaks or electrical issues) and other minor 'snags' (e.g.  loose door handles or ill-fitting cupboard doors) as soon as is practically possible or within 30 days of notification, whichever comes first. A developer is expected to work with the buyer once they have moved in to identify any such problems.

Registered Developers must also apply 10 fundamental principles in their dealings with customers under the New Code, including ones covering fairness, responsiveness and transparency, as well as taking certain practical steps at each stage of the sale process.

Where a Registered Developer falls short of the required standard of build quality and service, the New Code can be enforced by a buyer complaining to the NHOS.

Does the New Code apply to all new home buyers?

 The New Code applies to all private buyers purchasing a new home for their own occupation who reserve their home after their developer/seller registers on the Register of Developers.

Does a developer have to register on the Register of Developers?

 The New Code indicates that all developers of private for sale new homes (so, not just large housebuilding companies) are required to register by 31 December 2022.  That said, at the moment, there is no legal obligation on developers to register.

Powers under the Building Safety Act 2022 could be used to make the New Code legally binding but market pressures and/or residential lenders making registration a pre-requisite to accessing their products may do the trick.

 How does this affect buyers who are in the process of purchasing a new home?

The New Code applies where a buyer's developer became a Registered Developer before the date the buyer reserved their new home.

Where a developer is not a Registered Developer or a buyer reserved their new home before the developer's registration date, the buyer will still benefit from protections under the existing Consumer Code for Home Builders (Consumer Code) but not the New Code.

If a buyer has a complaint with their developer, how should they proceed?

The first port of call for a buyer should be to log the complaint with the developer. Contact details should have been provided when moving into the property. Failing that, they should be available on the developer's website.

If a buyer's complaint remains unresolved or the resolution offered is unsatisfactory, the buyer should consider the following options:

• if they are still within their warranty period and the complaint relates to snags, defects or the build quality of the property, contacting their warranty provider;
• if the New Code applies, escalating their complaint to the NHOS (see below);
• if the New Code doesn't apply, raising a complaint with the existing Consumer Code provider; their developer should be able to advise who this is and how to contact them.

How can a complaint be escalated to the NHOS?

A step-by-step guide to raising a complaint with the NHOS can be found on the NHOS website here. It includes the required eligibility criteria here. Complaint details and any associated evidence can be submitted via the NHOS's online portal. This is visible to NHOS representatives and the developer against whom the complaint is made.

 Is there a cost implication for using the NHOS?

No, the NHOS is a free service for consumers funded through annual registration fees paid by Registered Developers, linked to their size and annual turnover. 

What happens if a buyer and their Registered Developer cannot reach an agreement with the help of the NHOS?

Where an agreement cannot be reached, the NHOS will examine the matter and decide whether the Registered Developer is in breach of the New Code's requirements.

Where a breach has occurred the NHOS will come to a decision that the Registered Developer will be expected to implement (providing the buyer accepts this decision).The NHOS can propose an appropriate remedy seeking to put the buyer in the position they would have been in, had the breach not occurred. This could include:

• an apology and explanation;
• requiring the developer to do something to put matters right; or
• requiring the developer to make a payment to the buyer. The amount the NHOS can award is capped at £75,000.

Further information

Governing Codes:

• New Code - where a buyer's developer was registered with the Board before the date of reservation of the new home
• Consumer Code - where a buyer's developer was not registered with the Board before the date of reservation of the new home

New Homes Quality Board:

• 'New homeowners get beefed up protections', New Homes Quality Board (4 October 2022)
• Information for Homebuyers

New Homes Ombudsman Service:

• About the New Homes Ombudsman Service

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If you require further assistance on this, please contact a member of the Residential Team.