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16 May 2007

NHBC Buildmark Insurance Certificate: What you need to know

Permalink: NHBC Buildmark Insurance Certificate: What you need to know
by Brian Turner

RICS launches HIPs legal challenge

On the face of it, a Buildmark Insurance Certificate – commonly known as NHBC Certificate or Ten Year Guarantee Certificate – looks like an ironclad guarantee that your house will be safe and secure for its first 10 years.

However, don’t get caught out – Buildmark Insurance Certificates are actually a very limited device, and if you’re not aware of how a NHBC certificate applies to you, it could end up costing you thousands.

Buying a New Build Property from a Developer

The situation is most favourable if you buy the property brand new from the developer. Under the terms of the Buildmark Insurance Certificate, you can make the developer fix any and all defects and faults with the property within the first two years.

This is very important, because with most major builder/developer companies answering to their share-holders first, and not you, they can often focus on saving costs.

The practical reality being that the company sub-contracts much of their work to the cheapest local tender, resulting in work that falls very short of any reasonable quality standards.

While the developer claims their profits from the sale, the Buildmark Insurance Certificate means that you can at least force the company to correct such outstanding issues at cost to themselves.

These issues can be everything from minor to major issues. Minor issues I’ve seen myself can include:

  • Aerials not properly set up
  • Doors not properly fitted
  • Screws coming loose on other fittings
  • Electrical sockets left open
  • Damp & mould caused by incorrectly fitted extractors

More serious issues I’ve come across with new build properties includes:

  • Flooding due to poorly fitted pipes
  • Wrongly fitted double glazing
  • Poor/incorrect wiring on property
  • Boilers incorrectly installed
  • Roof not secured against the elements

In all instances, the Buildmark Insurance Certificate guarantee ensures that all should be fixed at the cost of the builder, so long as you bring these to the building/developer company’s attention in writing within the first 2 years of completion of the property.

And after 2 years?

After that, the company is only liable for repairs on major structural issues, such as subsidence, though it depends on the exact terms of the certificate, which can vary between developers.

Buying a Property after 2 years

Because of this, home buyers need to be very aware that what they get from a Buildmark Insurance Certificate guarantee once the property is more than 2 years old is – usually very little.

Basically, a Buildmark Insurance Certificate states that the property should be standing and structurally sound at least ten years after building.

So if there are any outstanding issues after the first 2 years, it’s up to you – and at your own cost – to repair them.

As the NHBC clearly states:

Buildmark is an insurance policy which covers you against specified risks which could be very expensive to put right. It does not provide cover for general wear and tear, condensation, normal shrinkage, damage arising from failure to maintain the property, or minor faults which first appear after the second year.

This means that if you are buying a new build property that is between 2-10 years old, although the Buildmark Insurance Certificate & documents should transfer to you automatically after sale, you should get a surveyor in before putting in a sales offer on the property.

Simply put, not everybody is either aware of – or bothers reporting on – any actual outstanding faults that may exist on a property.

So if the builder has not been informed of these in writing within the first two years, and they have been left unfixed, then you can find yourself left carrying the cost of these repairs, even if the original developer is at fault.

I found this out first hand when buying my first property – a 4 year old Barratt home.

Not only had the boiler been incorrectly fitted and wrongly wired up to the extent of requiring a new boiler, but they had also incorrectly fitted most of the double glazing, leaving the house cold and draughty in Winter.

What protection do I get from NHBC? Well, zero.

NHBC only issue a Buildmark Insurance Certificate on the basis of the structure of the property – effectively, the exoskeleton of the property, before everything else is fitted into it – so unless problems arise with the main house structure after two years, then the owner has pretty much no protection on any other issue unless stated otherwise in their individual certificate.

Which means that if you purchase a property with a NHBC Buildmark Insurance Certificate that is more than two years old, you should get a surveyors report to help make you aware of any outstanding issues which may remain on the property.

Contact the NHBC

The NHBC website can be found here:

To contact the NHBC:

Telephone Numbers:

Customer services: 01494 735363
Claims enquiries: 0870 241 4329
For builders/developers: 01494 735374

By Post:

Customer Services
Buildmark House
Chiltern Avenue

Fax to: Customer Services, 01494 723530

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