FAQs

 

1. Fees and other expected costs

How much will builders be charged for this new scheme?

A key requirement of the new arrangements is that access to the New Homes Ombudsman Service (NHOS) is free to consumers and therefore costs are covered by developers. There will be an annual registration fee which is based on developer annual turnover from the sale of private homes.  The table of fees can be seen here

How will the process work for paying charges?

When a developer applies for registration, we will confirm the annual registration fee.  Developers can choose to pay in one upfront payment or in installments.

How have the charges/fees been determined?

The fees have been set to cover the operating costs of the New Homes Quality Board (NHQB) and the NHOS.  It will be necessary to periodically review the structure for charges/fees.

Do we still have to pay for the existing Codes?

We are in discussions with the existing code bodies as to how the run-off from their codes will be managed and funded, but we do not envisage developers having to continue to fund the existing codes once they have registered and activated under the new arrangements.  

Any complaints from customers who reserved their new home before a developer’s NHQB activation date, should pursue their complaint through the previous (pre activation) process and appropriate Code body.

What standard fee will we have to pay if a customer makes a complaint to the NHOS?

This is still to be finalised but no fees to the Ombudsman will be charged during the first year of operation.

If the customer complains to NHOS but the claim isn't upheld, will the developer still be charged?

This is still to be finalised but no fees to the Ombudsman will be charged during the first year of operation.

 

2. Documentation logos and guidelines

Will developers have to display both the NHQC logo and the NHOS logo on their marketing material?

Yes. These should be seen as a positive commitment by the developer. We have produced individual NHQC and NHOS logos, as well as a joint version for developers to use where appropriate.

Will the New Homes Quality Code (NHQC) be provided by the NHQB in different formats/languages?

Yes. The Code is available English and Welsh versions as well as in large print.

 

Developers are going to have to change a lot of their branding and documentation to include the NHQC and NHOS logos - when will these be ready?

Logos and brand guidelines are provided when developers complete their application with the NHQB.

Can we use existing Consumer Code as well as NHQC logos on websites/documents at the same time?

Once a Developer has activated their registration with the NHQB, all new reservations will be covered by the new Code and the Ombudsman.  Customers who reserved before the activation date will continue to be covered by the existing arrangements.  Developers will therefore need to include both logos on their websites for two years after they activate with NHQB, and signpost customers to the correct scheme, depending on when they reserved their new home. 

 

 

3. Launch of the code, ombudsman and registration

Where can I get a copy of the New Homes Quality Code?

The Code is available on this website here . 

What is the process for registering for the NHQB?

This is a two stage process:

1. Developers will initially apply for registration on the NHQB’s online portal and pay the annual registration fee. At this point training and support materials are provided to assist the developer prepare for the new arrangements.  There will then be a transition period for the Developer to complete their readiness activities, e.g., training, updating complaints procedures, branding, etc. 

2. Once the readiness preparations are complete, the developer will 'activate' their registration on a mutually agreed date. 

Only when a developers’ registration with the NHQB is activated is the developer required to comply with the NHQC and NHOS for all reservations taken from the activation date. 

When will the NHOS be live and start taking complaints?

This is dependent on when developers activate their registration with NHQB. This is expected to be October 2022. 

How often will the NHQC be reviewed / updated?

The NHQC will be reviewed on a regular basis by the Code Council but we do not envisage a first formal review for at least  two years from launch so that industry can embed it within their businesses.

When will developers be able to apply to register?

We expect to open the application portal for all developers in July 2022.

Will developers have to sign up their whole business or can they phase their launch in specific regions?

Developers are required to register at parent company level but can then choose whether to activate their whole business or activate individual businesses/regions (so long as they are separate legal entities) in turn.

What criteria will developers have to meet before they can apply to register?

All developers of private new homes are expected to register with the NHQB.

What happens if we don't register by the deadline?

Ultimately, through the Building Safety Act, Government has the power to require companies building and selling new homes to be part of an Ombudsman scheme.

When will developers be able to ‘activate’ or launch this coverage to their customers?

When a developer has registered and their readiness preparations have been completed, they are able to agree their activation date with NHQB. The earliest we expect developers to activate and be live under the new framework in October 2022. 

 

What criteria will developer have to meet before they can launch/activate?

Registered developers will need to pay the required fees; confirm that their employees have completed the training; that they have processes in place to deliver against the requirements of the NHQC; and that they have updated all marketing materials with the new logos.

The NHBC 8-week survey refers to the Consumer Code, when will this change?

We are talking to HBF/NHBC about the impact of the new arrangements on the branding of the survey but ultimately the ambition is that the NHQB will support the survey as the current code body does. 

 

How long will we have to get “ready” after registering?

Developers can take as long as required to get compliant with the new requirements but we expect that for most, this transition period will be  around 3-6 months.

How long will developers have to apply for registration?

The period for registering with NHQB runs until 31st December 2022.  Following registration, developers will have a transition period before they activate.

Which companies have to join, is it just volume developers?

The NHQB will apply to all developers of private for sale new homes.

 

4. After-sales and complaints

The new Code states that the Customer has the option to categorise any issue as a formal complaint if they are unhappy with the developer’s approach. What is to stop a Customer from categorising all issues as a formal complaint?

The developer should use their documented After-Sales Service /customer charter to clearly explain and specify how a customer should approach any issue e.g., snagging, emergency issues, service issues, etc.

Where a customer refers a complaint to the NHOS, they will be asked to confirm whether they have notified their developer and been through their complaints process. The code makes clear how ‘snagging’ issues should be dealt with and gives the developer 30 days to address them BEFORE a formal complaint can be made about that specific element.

Does providing the customer with an on-line form to raise snags meet the requirement to provide the opportunity for the customer to carry out a post-occupation check on or within a few days after Legal Completion?

Yes. The requirement is that the customer should be enabled to provide details of any snags/issues to their developer in an agreed and acceptable format. Consideration should of course be given to the customers' computer skills and the availability of broadband.

Section 3 of the new Code refers to various standard responses required during the complaints process. Does NHQB provide standard text for these or will each builder develop their own?

Templates for the various new forms and required letters/emails are provided once Developers complete their application to register.

What is the complaint initiation date - the next working day or the day of receipt, even if 9pm on a Friday?

The complaint initiation date (CID) is the first working day after the complaint is received. For example, for complaints received on Monday, the CID is Tuesday and for complaints received on Saturday, the CID is Monday (or in the case of a public holiday, the next working day).

If we miss a milestone in a formal complaint process, can the customer go straight to the NHOS?

Yes, the complaints milestones are a mandatory requirement of the Code and customers can refer their complaint to the NHOS if their developer has failed to achieve any of the requirements of the Code.

Can a customer go to the NHOS without going through our formal complaints process?

Where a customer refers a complaint to the NHOS, they will be asked to confirm whether they have notified their developer and been through their complaints process.  In the event that they have not been through the formal complaints process then it is likely the NHOS would refer them back to their developer.

The customer is unhappy with our final decision, do we still need to send a closure letter, it will only inflame the situation?

Yes, the requirements of the Code require that developers confirm the final outcome of every complaint with a closure letter. This should provide an opportunity for the developer to set out the details of the case as they see it. It is likely the NHOS will consider this letter as part of their considerations as to whether the case justifies a NHOS investigation, so it is in the developer's interest to send this letter.

What happens if the claim goes to the Warranty Provider first, does that come out of the 56 days?

If a customer contacts the Warranty Provider, they should check that the issue has been through the developers process first and refer them back there if not. The first working day after the customer complains to the developer is the start of the complaints process.

If a Warranty Provider’s dispute resolution service is used, it still needs to comply with the 56-day requirement. However, it is likely that the NHOS would want to consider the conclusions of any ongoing investigation by the Warranty Provider, if the reasons for it not being completed within 56 days are valid, before deciding whether to take the case.

How will frequent non valid (vexatious) claims be treated?

Each complaint referred to NHOS will be reviewed on its own merits with information provided by both customer and developer before any decisions are made. Where a complaint is found to be not valid or vexatious, it will not be upheld and the customer will be informed.

 

5. Sales and marketing

Developers are required to describe the new home and one of the sections includes “Mobility Adaptations” – is there a definition?

This can be linked to customer vulnerability i.e., where possible/practical the option to personalise a new home to accommodate a wheelchair, a hoist, accessible washing/bathing facilities, etc. should be offered where the property is at a stage where these can be incorporated and costed if necessary. This reflects the principles and spirit of the NHQC by adopting a personal customer-centric approach.

Does a developer need to confirm to customers the year of Building Regulations standards that the home is built to?

We expect developers to provide all requisite information to a customer. The applicable standards should be advised, and this will likely include the relevant year.  Given the spirit and principles of the NHQC a developer should not use a superseded standard as a reason not to apply a subsequently enhanced standard if is practical to do so and beneficial to the customer.

The NHQC requires the developer to ensure that a customer states in writing what spoken statements they are relying on when entering into the Contract of Sale. What happens if there is a dispute with regards to any of the spoken statements?

We would suggest developers avoid  purely spoken agreements as far as is possible and where necessary follow-up anything agreed verbally immediately in writing to create a paper trail which can then be referred to when completing the Contract.

The NHQC states that ‘minor’ changes should be notified to a customer but do not give rise to a right to terminate. How will this be defined?

The NHQC states “Minor changes to the New Home that do not alter the size, appearance or value from that shown to a customer in the Reservation Agreement and Contract of Sale, should be notified to a customer”  

There is nothing to stop the developer specifying what they consider a minor change in their Reservation Agreement and therefore the customer is aware, and disputes avoided. 

The NHQC states the developer must provide the customer with a copy of the site plan but they are large documents and hard to print so we don’t usually provide a physical copy. Does that meet the requirement?

Yes. The important point is to document that the customer has seen the site plan.  A (non-technical) plan, showing the various plots, house types and basic layout of the site could also be included in the sales literature.

If a customer cancels during the 'cooling off' period, and reservation fees must be paid back in full, does this also include other payments such as for extras/upgrades?

This would depend on the timing of the cancellation and whether the developer can demonstrate that they have spent money on procuring materials for the extras/upgrades.  The Reservation agreement should specify how any pre-exchange of contract payments will be dealt with.

Vulnerable customers – will there be a scale of expectation depending on size and scale of business? Will colleagues be expected to be trained if in a customer facing roles?

All employees in customer facing roles should have an understanding of how to identify vulnerable customers and have procedures in place to provide additional support.

With regards to the new definition of a ’complete’ new home – are developers allowed to use temporary services e.g., for drainage if the foul isn’t connected and the developer is pumping out / tankering for a short period?

Yes. The complete new home definition in the Code confirms that the new home is complete “if a warranty cover note has been issued and all rooms, spaces and facilities are in a finished condition for the purpose for which they are designed and intended, and the property provides safe entrance and emergency exit routes; with any further work to the home being either;

  1. solely decorative/corrective.
  2. related to shared common areas.
  3. related to transitioning from temporary to permanent utilities and services, in each case which do not affect the owner’s ability to live safely in the property or will not cause significant disruption or inconvenience to rectify or complete.”

We insure contract deposits via the Warranty Provider but this doesn't cover other aspects such as reservation fees and other pre-payments. Does this mean we must have escrow accounts?

To protect consumer deposits and other monies, builders either need to use cover provided by their warranty provider, use a client/escrow account, or some other legal means within their normal business to ensure such funds can be repaid where required.

The Developer Guidance states that it is best practice to offer more than one independent adviser. Can these advisers be from the same firm?

The principle here is to offer the customer the benefit of speaking to an adviser who specialises in the new home sector without restricting their choice. Whilst many Professional Advisers are individually accountable for any advice they give it would not be appropriate to offer advisers from the same firm/legal entity. When establishing the independence and autonomy of adviser firms, reference should be made to any regulator or professional body (e.g., Law. Society, FCA, RICS, etc.) to identify that the firms are treated as separate legal entities. 

 

 

6. New Homes Ombudsman Service (NHOS)

How long will we have to provide a defence to a NHOS claim?

The NHOS will operate an online portal for customer complaints. Once a complaint has been received, it will be passed to the developer who will initially have 10 working days to provide a response. Both parties will have access to all the information provided on the portal and after both have uploaded their input, there is a further 5 working days for any additional comments to be added. After this, the Ombudsman will consider the evidence and make a decision. 

Can we appeal an NHOS decision?

No, the NHOS decision is final. This is the same for customers.

I've heard NHOS decisions will be made public, where will they be published?

Complaints may initially be published on an anonymised basis in an agreed format on the NHOS and NHQB websites.

How does a customer make an Ombudsman claim, is there a website?

The NHOS will operate a website and online portal via which complaints can be made; as well as a call centre for customers.

Will the NHOS carry out desktop assessments or visit the customer’s home?

The NHOS will use the evidence provided by both customer and developer to make a decision. Where more information is required from either party, this will be requested. 

What type of information will be taken into account and how will we provide any evidence to support the action we’ve taken?

The NHOS will operate an online portal where complaints can be uploaded and managed. Developers will get the opportunity to upload any evidence to the NHOS that they feel supports their decision making and demonstrates that they have treated the customer fairly and met the requirements of the Code. If the customer has used the warranty providers dispute resolution service, evidence from this could also be used by the NHOS to reach a decision.

What type of penalties are likely to be imposed so we can budget for these?

There are four potential remedies when a complaint is upheld: 

  • Apology 
  • Explanation 
  • Rectification 
  • Compensation/goodwill payment

The NHOS has proposed a maximum overall cost of £75,000 as the total limit for the resolution of an issue and any loss experienced. The setting of compensation and other sanctions in individual cases is a matter solely for the NHOS.

Can a legal case and a NHOS case run at the same time?

Technically yes, however it seems more likely that customers will exhaust the NHOS process first, before incurring any legal costs.

If a case is with NHOS and customer raises the matter with press etc how will that be handled?

A bit like the question above, it would make sense to exhaust the NHOS process before escalating as this may confuse/prejudice investigations.

Will you be publishing the volume/types of complaints online once the NHOS is live?

The NHQB will start to publish data on complaints etc at a point in the future which is yet to be determined.  It will initially be on an anonymised ‘industry’ basis and will not identify individual companies.

 

7. Pre-completion inspection

What kind of pre-completion inspection can the customer carry out?

In addition to the ‘home demonstration’ that most developers already provide, the NHQC allows for customers to have a pre-completion inspection carried out on their property by a suitably qualified inspector.  An inspection checklist has been developed by a working group led by the RPSA. The checklist that allows for a full ‘finishing’ check to be done on the new home and that basic elements such as lights, taps etc are working.  Allowing a suitably qualified inspector to carry out this agreed template inspection meets the requirements of the NHQC.

Who pays for the pre-completion inspections?

The NHQC states that the customer has the option to have a pre-completion inspection carried out. If they choose to do so it is at the customer’s expense.

What will happen if there are not enough inspectors when NHQC launches?

Given the current volume of property valuers/surveyors it is not anticipated that there will be a shortage of inspectors. Many developers currently already allow for customers to carry out a pre-completion inspection.

Will there be a central register of people or companies able to undertake pre-completion inspections?

The guidance confirms that such an organisation should be part of a recognised professional association, experienced in surveying residential property such as RICS or RPSA. Those associations will be able to provide details of their memebers who can undertake these inspections. 

What if a customer wants to appoint a snagging company who does not meet the criteria for undertaking pre-completion inspections?

When inviting customers to undertake a pre-completion inspection, developers will need to confirm that this can only be done by a suitably qualified professional who can demonstrate membership of a body such as RICS, RPSA, etc

If the developer feels, and can justify that in their opinion, the inspector is not suitably qualified they can refuse them entry and should work with the customer to identity and agree an alternative inspector.

Is there a standard fee for pre-completion inspections or will inspectors/surveyors set their own charge?

Surveyors or inspectors will set their own fees and agree this with the customer.

Do we need our own forms to record a pre-completion inspection or will this be provided by the inspector?

Developers should record that a customer has been given the opportunity for a pre-completion inspection.

A standard template for the pre-completion inspection will be provided for use by all surveyors/inspectors but developers and inspectors may also create their own digital or paper version of the standard checklist that works within their systems and procedures.

Who can accompany the suitably qualified inspector during the inspection?

At this point, the home is still owned by the Developer so they can decide whether a Site Manager or other role should accompany the inspection.

Can the pre-completion inspection delay legal completion if there are outstanding works?

As this is an inspection of the finishing standards of the new home, it is not meant to delay completion as any items identified should be of a minor, aesthetic nature rather than a significant defect

Who can carry out the pre-completion inspection?

The NHQC specifies that the pre-completion inspection needs to be carried out by a suitably qualified inspector. It is expected that ‘suitably qualified' would include those who are members of a recognised professional body (e.g., RICS, RPSA), or have relevant residential property surveying qualifications. 

 

8. NHQB and training

Will NHQB be auditing Sales Centres etc as the Consumer Code for Home Builders does currently?

Yes – in a similar way to how the existing Codes manage this.

Will the NHQB be providing staff training in the same way that the existing Consumer Codes do?

Yes. An online training module is made available to developers once they have completed their application to register. The training includes assessment modules for different job roles including sales staff and those providing after sales services.

Which staff will need to undertake training?

The training has been developed to provide guidance for all customer facing employees (e.g., Sales, Site Managers, Customer Care, etc) but is also useful for the wider business to understand how the new requirements impact them.

How long is training likely to take to complete?

The NHQC eLearning module will take around one hour in total, however it’s possible for delegates to pause the module and return to the same point at a later date if they are unable to complete it all in one sitting. The assessment at the end of the module has to be taken in one sitting. 

Will the training cover all requirements of the NHQC or will we also need to develop our own training?

The training module will cover the main requirements of the NHQC and should be backed up by providing copies of the NHQC itself.  Developers may choose to do additional training which is tailored more specifically to their individual procedures.

Will the NHQB training be only for customer facing staff or will it cover other functions such as Land and Technical?

The training module is the same for all employees, but the assessment test will differ according to whether the employee is in a customer-facing role or another (non-customer-facing) department.

What training material is going to be provided and when will we receive that?

An eLearning training module is provided to developers when they complete their application for registration, and must be completed for all customer facing employees before the developer can activate.

Will NHQB be doing any advertising to raise consumer awareness of the new NHQC and NHOS?

Yes, it is envisaged that the profile of the NHQB and the NHOS will grow once developers start to activate, which should be seen as a positive by the industry in terms of consumer confidence – and the NHQB will use this platform to promote the benefits of the new arrangements.

Will case studies be made available for developers to learn from?

Yes, once the NHQC has been in place for some time, any learnings will be shared with the industry to improve the application and/or efficiency of meeting the Code requirements.