Builders' solicitor guidelines
1. Introduction
1.1. These guidance notes are intended for use by conveyancers acting for vendors of new homes built by NHBC registered builders.
1.2. Conveyancers acting for the vendor of a home built by an NHBC registered builder should note that NHBC registered builders and developers are bound by the terms and conditions of the NHBC Rules for Builders and Developers Registered with NHBC (pdf).
1.3. You may also find it helpful to refer to the guidance notes for purchaser's conveyancers.
1.4. These notes are provided for general guidance only. The NHBC Rules for Builders and Developers Registered with NHBC, Buildmark offer documents, the Buildmark booklet and the Buildmark Insurance Certificate should be referred to for their full terms and effect.
1.5. If you need to contact NHBC, please do so via NHBC's Customer Service Team, who will be pleased to assist with resolving any queries or concerns. Call 0844 633 1000. You should not contact NHBC's Legal Department directly. NHBC's Customer Services Team have been trained to deal with enquiries from conveyancers.
2. Before exchange of contracts/conclusion of missives
2.1. Check with NHBC that the vendor offering Buildmark cover is an NHBC registered builder or developer.
2.2. If the vendor is not an NHBC registered builder or developer, you will need to obtain NHBC's written consent to the home being sold by a non-NHBC registered vendor with the benefit of Buildmark cover. If consent is given, NHBC will issue the Buildmark documents in the name of the builder, with an endorsement to the effect that NHBC authorises the builder to offer Buildmark cover even though the vendor of the home is not an NHBC registered builder. NHBC reserves the right to decline to consent to non-NHBC registered vendors selling homes with the benefit of Buildmark cover.
2.3. If the vendor is not an NHBC registered builder or developer, the deposit and any other payments made under contract will not be protected by NHBC if the registered builder becomes insolvent after exchange of contracts / conclusion of missives and before completion/date of entry. Therefore, the purchaser's conveyancer may require steps to be taken for the protection of their client's deposit (for example by requesting that the deposit be held by the vendor's solicitor as stakeholder and not as agent).
2.4. Check that the contract for sale or construction of the home provides for the home to have the benefit of Buildmark cover.
2.5. Follow the instructions on the Buildmark pack once you receive it.
2.6. Immediately before exchange of contracts/conclusion of missives, check that the builder or developer offering Buildmark cover is registered with NHBC. If the builder or developer has left NHBC's Register after a home has been registered for cover but before exchange of contracts/conclusion of missives, NHBC may not provide cover.
3. After exchange of contracts/conclusion of missives
3.1. Immediately after exchange of contracts/conclusion of missives pass the pack of Buildmark documents to the purchaser or the purchaser's conveyancer. Do not delay doing this, otherwise you may delay the release of mortgage funds and delay completion.
3.2. NHBC will not permit a builder, developer or non-NHBC registered vendor to retain Buildmark documents after exchange of contracts/conclusion of missives, for any purpose.
3.3. Following exchange of contracts/conclusion of missives, the home will initially only have the benefit of the limited cover provided under section 1 of Buildmark (Cover before Completion).
4. Issue of the Buildmark Insurance Certificate
4.1. Most mortgage lenders will not release funds for the purchase of a new home until NHBC has issued a cover note.
4.2. After making their final inspection and provided that they are satisfied with the standard of construction of the home, NHBC's inspector will issue a cover note and hand it to the builder. The builder should pass on the cover note to the purchaser's conveyancer as soon as possible, in order to avoid any delay in the release of funds in time for completion.
4.3. Following the issue of a cover note and receipt of a completed Acceptance Form, NHBC will issue a Buildmark Insurance Certificate. NHBC will not issue the Buildmark Insurance Certificate until NHBC receives the Acceptance Form, fully completed. The Buildmark Insurance Certificate may also include a Final Certificate issued where NHBC's subsidiary NHBC Building Control Services Limited has acted as Approved Inspector (see below).
5. Shared equity and similar schemes
5.1. Buildmark documents for equity sharing arrangements are the same as for standard private development sales as described above.
5.2. The Buildmark offer documents are provided by the NHBC registered builder who will not necessarily be the same party as the equity sharer/lessor (e.g. a Housing Association).
6. Mixed residential and commercial developments
6.1. Buildmark cover is often provided for residential dwellings forming part of a mixed commercial and residential development. Typically these dwellings are apartments within a building that includes an element of commercial use, such as retail outlets.
6.2. Where NHBC provides Buildmark cover for residential parts of such mixed developments, it may also provide Buildmark Connect cover to provide complementary cover for the non-residential parts of the development.
6.3. When first instructed in connection with a mixed-use development, it is recommended that conveyancers advise their clients to contact NHBC to ascertain whether Buildmark Connect cover can be arranged.
6.4. Where Buildmark Connect or similar cover is not provided, careful consideration should be given to the issue of who is responsible for attending to defects in non-residential parts of the development and how responsibility for attending to defects in common parts is shared by residential and non-residential occupiers.
7. Building Control
7.1. NHBC's subsidiary, NHBC Building Control Services Ltd (NHBC-BCS) is an Approved Inspector under the Building Act 1984 in England and Wales.
7.2. If a builder chooses NHBC-BCS to undertake Building Control work, NHBC-BCS will:
7.2.1. issue an Initial Notice to the relevant District or Borough Council which suspends their power to inspect the building work;
7.2.2. inspect the building work and liase with appropriate bodies such as the Fire Authority;
7.2.3. if appropriate, issue a statutory 'final certificate'.
7.3. The final certificate, if issued, will be incorporated within the Buildmark Insurance Certificate in a single document. A copy is sent to the relevant District or Borough Council. Accordingly, the District or Borough Council will not issue a completion or habitation certificate.
7.4. It should be noted that if NHBC acts as Approved Inspector, NHBC will perform that function in accordance with the relevant duties of the Approved Inspector under the Building Act 1984 and in accordance with the applicable Building Control Performance Standards issued by the Department for Communities and Local Government. This involves a series of inspection visits, but not day to day supervision of the construction process, which remain the builder's responsibility.
8. Assignment to a subsequent purchaser
8.1. It is not necessary for second and subsequent owners to take an assignment of the benefit of Buildmark cover. NHBC's Rules forbid the builder to avoid liability because an assignment has not been taken.
9. Defective Premises Act 1972
9.1 Since 31st March 1979, NHBC's Buildmark scheme has not been approved for the purposes of section 2 of the Defective Premises Act 1972.
