How does it work? Many people are still not totally sure what the role of the NHBC is, what they cover and how claims are handled.
Here are the basics.
The National House Building Council (NHBC) is a non-profit making organisation.
It provides the Buildmark Warranty and insurance cover for new homes and newly converted homes.
Buildmark is just the name given to the warranty cover that the NHBC provides.
The NHBC is its own principle insurer for its warranties and is registered with the Financial Services Authority (FSA).
The NHBC generates approximately 50% of its money from investment income and the remainder from fees for insurance cover, Building Control and ancillary services.
Insurance cover for new properties is received from the builder.
The 10 year Buildmark warranty works like this; The builder registers your house with the NHBC.
During the build the NHBC inspectors come out at key stages (five key stages) to inspect the house.
On completion the NHBC issue an insurance certificate.
This includes for a Buildmark Warranty.
Under the NHBC Buildmark, if the builder does not finish the property because of insolvency for example the NHBC will pay for it to be finished as long as it was registered with them by the builder (maybe you should check!).
The amount they will pay is 10% of the market price or £100,000 whichever is the less.
In the first 2 years, any defects and damage are the responsibility of the builder and should report them to him.
If the builder does not respond to your request or cannot attend to them the NHBC will intervene to try and get the builder to sort out the defects.
If you and the builder disagree or become involved in a dispute about the work the NHBC will, at their discretion offer their Resolution Service where they will investigate the problem and issue a report which, if you agree with it, instructs the builder to undertake whatever work they see fit.
If at this point the builder still refuses to do the work, then the NHBC will organise for the work to be done under the insurance policy.
The main point here is that the NHBC need to agree that the work actually needs doing.
The NHBC will no doubt attempt to recover the costs from the builder without you having to get involved further.
You can at any time enter into Arbitration proceedings with the builder.
In years 3-10 the NHBC are directly responsible for your defects and damage and you contact them rather than the builder.
Importantly the cover in these years is different.
Cover is generally restricted to the structural and weather-proofing aspects of your home and is subject to a minimum claim value which is £1,200.
There is no point complaining about a squeaky staircase or loose door casing.
The faults have got to be pretty much major faults.
As above, defects such as dampness, condensation and shrinkage cracks are not covered unless they are the result of a defect.
There are currently about 20 exclusions in the policy.
What you should understand is that the term 'defect' as we know it has a different meaning under the NHBC warranty.
'Defect' according to the NHBC is:- The breach of any mandatory NHBC Requirement by the Builder or anyone employed by or acting for the Builder.
Failure to follow the guidance supporting an NHBC Requirement does not amount to a Defect if the performance required by the NHBC Requirement is achieved by other means.
So, 'defect' is a breach of a NHBC mandatory requirement.
The requirements are in the form of Technical Requirements, namely R1-R5.
Technical requirement R2 for example regarding design states 'Design and specification shall provide satisfactory performance'.
R4 is in relation to workmanship and states 'All work shall be carried out in a proper, neat and workmanlike manner'.
For example, if your floor tiles come loose and start to crack, unless you can show they are coming loose due to a breach of a technical requirement by the builder, then you would not be covered.
Remember you are dealing principally with an insurance company.
The warranty was paid for by your builder (albeit with your money) and you cannot sue the NHBC if you are not happy with their service.
Certificates are mainly needed for mortgage companies who want to see that the build has had some professional overseeing.
Certificates can also be issued by your Architect however there is no warranty alongside this.
There are alternative warranty schemes out there and the NHBC type cover is not exclusive.
This article in no way endorses the NHBC.
It is to provide information.