'Developer Warranty Periods'

Traditional warranties require developers to adhere to the 'Developer Warranty Period' (DWP) – the first 2 years of the 10 year policy that requires the developer to attend to all claims. It is this condition of the cover that presents problems when a developer or builder is no longer trading and therefore not available to remedy problems.

Even when another developer or contractor takes over a part-completed scheme, it is unlikely they will take responsibility for the potential failings of the previous builder.

Insolvency Practitioners are in a similar position. You want to realise the assets of the scheme and move on, without the responsibility of a DWP and all the hassles and costs associated with it.

The warranty market has tried to respond with products developed from their traditional offerings. However, the standard practice is to simply take out the initial 2 year DWP and “stretch” the remaining 8 years to give 10 year cover. The problem is that the 8 year period covers major damage only, so the minor damage cover included in the first 2 years of a standard policy, is not available to the homeowner. This leaves them under-insured.

We often deal with developments 'in receivership', as well as many schemes which have been brought to us by developers who have acquired the site from a receiver or funder. In addition, many of these schemes were originally registered with another provider who was unable to provide a flexible and pragmatic solution once the receiver was called in.

Insurance v warranty

Because we offer “insurance” rather than a “warranty”, we have never had a DWP or relied on developers attending to claims. So our standard full cover policy can be applied to schemes in receivership or those purchased from an Insolvency Practitioner. This gives homeowners, funders and investors, the full cover and comfort they need.

The insurance option has further benefits for those involved with schemes in receivership. BLP cover the building, rather than the builder, which means that transfers of ownership pose no problems and replacing contractors or professionals is simply not an issue.

Working with BLP

Working with BLP is also exceptionally straightforward:

  • We have a single form to complete on any given scheme
  • Our risk assessment is flexible and pragmatic
  • No outdated technical manual prescribing the way to build
  • The price of the insurance is based on rebuild cost and extent of works completed with no builder “rating scale” to limit your/the developer's choice of contractor
  • BLP is accepted by all major lenders, collectively responsible for 99% of UK mortgages

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