Grow Exeter | Aug 13, 2018 | 0
DO’S & DONT’S When Buying a New Build Home
As Exeter grows in population, so do the number of houses that are being built. In the 2016 – 2020 Exeter Housing Strategy report, it predicted that households are expected to increase by 8,800 to 58,000 by the year 2023. Many of the biggest planned housing developments in Devon have taken place in and around Exeter; including the developments in Exminster, Cranbrook, and Topsham.
Buying a new-build home is a little different to buying an existing property – and comes with its own set of challenges, particularly because many sales happen before the house is built. Wollen Michelmore’s partner in residential property, Richard Phillips, gives his top legal tips to consider when buying a newbuild.
DON’T part with any money to pay the reservation fee until you have your mortgage agreed in principle. The reservation fee is non-refundable and so it would be lost if you haven’t made the all-important phone call to your trusted mortgage advisor before you fall in love with the home of your dreams.
DO ask for a Reservation Agreement when you pay your reservation fee. This will include details of the agreed purchase price, what is included in the price (such as carpets, kitchens and other extras and incentives), any Developer’s Document Fees and the nature and cost of service charges and management fees. You should also identify how many properties are to be built on the site and how the service charges and management fees are to be divided between each household.
DO establish early on whether you are buying a freehold or a leasehold property. Leaseholds will carry with them far greater Service Charges on a yearly basis than a freehold which has the benefit of communal outdoor space. If it is leasehold, how are the ongoing Service Charges and Ground Rents calculated and can you afford those going forwards?
DO check that the boundaries as shown on the plans provided to your Solicitor accord with the physical boundaries on the ground. You will want to ensure that your new neighbours don’t think they can have their BBQ in part of your garden because the plans were wrong!
DO also check the location of any garage or parking space included with the property and any visitors’ parking spaces.
DO identify the snagging list BEFORE completion. A snagging list is a term used to describe all those little but important jobs which haven’t yet been finished, such as grouting the tiles, decorating the skirting, hanging the doors. Essentially, if you expected the finish to be of a certain standard, ensure those jobs have either been completed or agree a list with the developer before completion takes place. If left until after completion, the incentive has gone for the developer to finish the job quickly and they may also try to argue that some of the issues have been caused by post completion wear and tear.
Anything which would be classed as a defect and which the developer fails to address will be covered by the two-year NHBC Warranty and the following eight years of the NHBC Warranty covers substantial/major defects.
Richard Philips has been a partner at Morgan & Pope (now known as Wollen Michelmore since the 1st April 2018) since 1992 and holds a wealth of experience in Residential conveyancing matters. If you have any questions about buying a new build or any other conveyancing matters contact him today.
Tel – 01392 274006
Email – Richard.firstname.lastname@example.org