- Over 250,000 have given up on the dream of homeownership
- BLP now offers latent defects insurance in the Republic of Ireland
- 'Quality homes must be at the forefront of the government's housing plans' - Planning & Building Control Today
- 'Millions put off moving home in the UK because of Brexit, poll shows' - Property Wire
- House hunters get Brexit jitters
- 'The role of sensors and data in the built environment' (White Paper)
- 'Structural defects can leave homeowners without insurance out of pocket' - PBC Today
- 'Drivers for sustainability in construction & the urban environment' (White Paper)
- 'UK housebuilding remains buoyant but...' - Builder & Engineer
- 'The burning platform for construction' (White Paper)
BLP Code Q&A
Q: When did the Code come into effect?
A: The Code requirements came into effect on the 1st June 2015 and will apply to all relevant residential schemes (see three questions below for exclusions). Quotations on schemes that are subsequently accepted after 1st June 2015 are covered by the Code. Therefore schemes quoted for prior to 1st June 2015 are not captured under the Code.
Q: What is the objective of the Code?
A: The objective of the Code is to ensure that the Home Buyers are:
- Fairly treated by the Home Builder;
- Reassured that the Home Builder is a legal entity and acting professionally;
- Know what quality of construction to expect for the Home;
- Know what service levels to expect from the Home Builder;
- Is informed on how to manage the Home and address any problems that may arise;
- Receive clear and honest information from the Home Builder at the right time upon which to base their decisions;
- Provided with a clear procedure for dealing with service calls and any matters of dissatisfaction or complaint;
- Is aware that the Home Builder complies with guidance on Vulnerable Buyers; and
- If the Home Builder fails to rectify Snagging and the Buyer makes a complaint this complaint would be addressed under the terms of the Code. BLP insurance policies do not cover Snagging.
Q: Do Home Builders need to sign up to the Code?
A: By virtue of taking out a BLP policy (quoted after 1st June 2015) and accepting the terms and conditions of the Client Services Agreement the Home Builder is obligated to adhere to the terms of the Code.
Q: Are all residential schemes included under the Code?
No. The Code requires that all new build residential properties be covered by the Code with the exception of the following categories:
- homes taken by the Home Builder in part exchange and re-sold
- homes where BLP insurance has been bought by a Consumer Client (an individual customer or sole trader);
- homes acquired by social landlords for rent;
- homes acquired by companies, partnerships and people buying several properties for investment purposes;
- homes built by self builders for their own occupation;
- homes built under an architect's certificate;
- homes assigned by an investor to a 3rd party prior to ownership transferring from Home Builder to Buyer on receipt of the purchase monies paid by it to the Home Builder.
Q: What are the benefits to the Home Builder under the Code?
A: A number of benefits result from the implementation of the Code. A key benefit is evident in the fact that large mortgage lenders in the UK require that a Consumer Code be made available on new build residential schemes. Therefore by implementing a Code it ensures that the properties remain marketable to a wider proportion of the population.
Additional benefits include:
- The ability to distinguish levels of service from those of competitor house builders;
- Gives Buyers peace of mind if something goes wrong;
- Compliance with the Code reduces the likelihood of complaints & litigation against the Home Builder by disgruntled Home Buyers;
- Code gives Buyers confidence they will be dealt with fairly and transparently by Home Builders under the terms of the Code.
Q: What are the benefits for Home Buyers under the Code?
A: Under the Code the Home Buyers will benefit from:
- Greater protection in respect of clearer pre-contractual information;
- Better deposit and pre-payment protection;
- Option to upgrade to BLPSECUREPLUS for protection against component parts provided this option is taken prior to First Fix;
- A clear process and time line for the rectification of snagging;
- Clearer, simpler complaints procedure.
Q: Who is paying for the Code?
A: The costs of running the Code will be recharged to the relevant schemes as a proportion of the technical administration fees.
Q: Is extra guidance on the Code available?
Home Builders will also be required to undertake an e-learning programme and will be required to pass that programme. Once registered we will send you a link to the course.
2. Availability of the Code
Q: What are the responsibilities of the Home Builder in making the Code available to Buyers?
- The Home Builder must make the Code available to all existing and prospective Buyers, without any charge.
- Home Builders should acknowledge and cater for the needs of Vulnerable Buyers and help them to make informed decisions. (A definition of 'Vulnerable Buyer' is shown in the glossary to the Code, and section 2 'Making the Code Available' gives greater detail on dealing with Vulnerable Buyers).
For further information on the Code, please visit either Home Builder or Home Buyer.
3. Displaying the Code
Q: The Code requires the Home Builder to display the Code. How should this be done?
This can be achieved by one or more means, such as displaying the BLP Code booklet on their own websites or displaying the BLP Code poster in a client facing space. BLP will supply a poster as part of the introduction pack.
Sales and marketing material used to sell the properties should include information relating to the Code. BLP will supply A4 flyers as part of the introduction pack. Additional copies can be ordered by emailing BLPCode@blpinsurance.com.
BLP have created a short animation for Home Buyers which can be supplied and used by Home Builders.
To obtain the animation file or the Code booklet pdf please email BLPCode@blpinsurance.com.
4. Home Builder Customer Service
Q: What are the responsibilities of the Home Builder in relation to Customer Services under the terms of the Code?
The Home Builder has the following responsibilities for Customer Service staff whether employed directly or when utilising a 3rd party:
- to provide appropriate training to all staff who deal directly with Home Buyers in respect of their responsibilities to Home Buyers and what the Code means for the directors and the company.
- to ensure that systems and procedures are in place to enable them to accurately and reliably meet the commitments in service, procedures and information in the Code.
- to include training on identifying and dealing with Vulnerable Buyers.
Q: When is the BLPSECUREPLUS available?
BLPSECUREPLUS is available as an additional warranty on new build properties up until first fix.
Q: What is BLPSECUREPLUS?
Summary of BLPSECUREPLUS cover:
This product offers cover which is wider than a “standard” structural housing warranty insurance and includes:
- A BLPSECURE policy covering Structural Defects in the Premises;
- The BLP Component Failure Extension, designed to meet the costs of premature failure of non-structural component parts within their predicted lifetime. Some examples of components include kitchen units, boilers, electrical wiring and pipe work for gas, water, heating and ventilation. The predicted lifetimes of component parts are listed in the Component Life Schedule that comes with the policy;
- The Structural Parts includes the parts of the Premises which are essential to the structural stability and waterproofing, such as walls, foundations, windows and roof.
6. Fees & Deposits
Q: Does the Code provide protection for the Home Buyer in respect of the reservation of properties?
Home Buyers must be provided with a Reservation Agreement in plain English that clearly sets out the following terms including but not limited to:
- The amount of the Reservation Fee;
- Terms under which the Reservation Fee is refundable or non-refundable;
- Confirmation that the Reservation Fee is not a Contract of Sale for the purchase of a Home and that the Home Buyer understands the difference between the two;
- What is being sold including the type of Home, plot number, map, development name etc.;
- The purchase price;
- How and when the Reservation Agreement will end;
- How long the price remains valid;
- Date by which the Contract Exchange must take place;
- Part Exchange details if applicable.
Q: Can the Home Builder access Reservation Fees and Contract Deposits made on properties?
No. That the Reservation Fee and Contract Deposit being a part payment of the purchase price of the home will be held in a deposit account in trust or in an account which complies with the provisions of the Solicitors Regulation Authority Rules in respect of protecting client monies and assets which cannot be accessed by the Home Builder until Completion. At this point the conditions of sale have been satisfied.
The Home Buyer should be aware that if a Reservation Fee is paid by using a credit card then the Home Buyer is protected by the credit card company.
Q: Does the Code address Contract Deposits?
The Home Builder must clearly explain how the Buyers' Contract Deposits are protected and how any other payments are dealt with.
The Home Builder must ensure that the Home Buyer is made aware of the following:
- That the Reservation Fee and Contract Deposit will be held in a deposit account in trust or in an account which complies with the provisions of the Solicitors Regulation Authority Rules in respect of protecting client monies and assets which cannot be accessed by the Home Builder until Completion. At this point the conditions of sale have been satisfied.
- The terms under which the Reservation Fee, Contract Deposit and any administration fees or similar which the Home Builder may deduct are refundable and any applicable costs or penalties in the event that the Home Buyer does not proceed with the purchase of the Home.
- What happens in the event that the Home Builder goes insolvent
7. Complaints & Disputes
Q: What are the obligations of the Home Builder in advising the Home Buyer on Dispute Resolution?
The Home Builder must give the Home Buyer a document providing the Code procedures including how to access the Dispute Resolution Scheme. This document must confirm the scope of the Code, any exclusions and any deadlines. It must highlight that all complaints must be made within two years of the start date of the BLP insurance.
Q: What is a dispute?
The Home Buyer must first complain to their Home Builder and give the Home Builder the opportunity to investigate and to put things right in accordance with the Home Builder's complaints procedure.
If the Home Buyer is not satisfied with the Home Builder's response or has not received a response from the Home Builder within 60 calendar days of submitting their complaint to the Home Builder in writing, the Home Buyer may refer the dispute to the Dispute Resolution Scheme.
Q: What happens if the Home Buyer and Home Builder are unable to resolve a dispute?
The Home Buyer is able to refer a dispute to BLP for mediation. Should the mediation not be successful then the Home Buyer has the right to refer to the Dispute Resolution Scheme , which is independent of the Home Builder and BLP. Any matter referred to this procedure will only concern disputes arising under the Code.
Q: What cost is there to the Home Buyer to make an application to the independent Dispute Resolution Scheme?
The Home Buyer would be required to submit an application form, their statement of evidence and a case registration fee of £100 (plus VAT).
Q: What sanctions can be placed on the Home Builder for non compliance to the Code?
This depends upon the severity of the non compliance which would be decided upon by the Disciplinary and Sanctions Panel. Sanctions range from re-training staff, fines and in the most severe cases a refusal by BLP to quote for new business for a period of upto ten years. Further BLP reserve the right to pass the the details of that party in severe breach of the Code to other warranty providers who operate a Code.
If you have any further questions please call Charlotte Weathersbee, our Code Executive, on 020 7204 2897 or BLPCode@blpinsurance.com.