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RPI : Crackdown
  News from the Residential Property Investor, the bi-monthly magazine for RLA members

other articles from the November / December 2005 issue

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CRACKDOWN - November / December 2005

If you want to buy into a new development, be wary of the quality of build and finish, says Jane Howard

New homes are being built to poorer standards than ever, according to research by the School of the Built and Natural Environment at Glasgow Caledonian University. It found that new home defects have jumped by 53 per cent since last year.

The data was taken from inspections carried out by the snagging company Inspector Home over the past four years. Initial analysis of over 100,000 defects indicated that snagging levels in Scotland, the south-east and the south midlands were significantly worse than in the rest of the UK.

Joiners, painters and plumbers were responsible for over 60 per cent of defects. Alarmingly, 95% of the new homes had already been inspected and signed off by the NHBC.

Vanessa Ambler, director of Inspector Home, says that the average new home now has 80 defects: "We have been working hard with a few developers to improve quality standards and we are starting to see some fantastic results coming through.

"However, we are also aware of a number of developers whose standards are slipping dramatically - not just in quality but also customer care. I dare anyone who says that the quality of new homes is improving to come and work in our head office for a day and speak to our customers - that would open their eyes."

Snagging should be top of the list for any property investor looking to buy into a new development. Its importance cannot be over-rated because of the possibility that you could not let the property while the work was being put right. Worse still, snags might come to light after tenants moved in, with even worse financial implications. Some top tips:

1. Always use your own solicitor and not one recommended to you by the developer - vital should disputes over the condition of a property later arise.

2. Because you do not legally own the property until completion, a developer can refuse you entry, which means you would not be able to inspect work or carry out snagging. Get permission to gain entry before completion written in to your contract.

3. Hold back a retention until all snagging defects are rectified - and get this written in to your contract too.

4. Never buy a new home without a warranty. In rare cases, you may be offered an Architect’s Certificate rather than the better known NHBC or Zurich certificates. An Architect’s Certificate is not a warranty and in many cases is not worth the paper it is written on. Never complete on a new home with an Architect’s Certificate unless you have checked the property thoroughly and defects have been rectified. Don’t over-rely on any form of warranty.

5. Carry out a thorough snagging inspection of the property before you complete. Do this yourself or get a professional snagging company to do it for you. The site manager should be present during the inspection.

6. Ideally, ensure that all defects are corrected prior to completion. If this is not possible, you must obtain written confirmation and a schedule of remedial works prior to handing over your money.

7. Once you have completed, visit the property and re-check for cosmetic defects and leaks. If building work has been carried out, some additional damage may have occurred.

8. During the first two years of your NHBC or similar warranty, the developer is liable for defects that occur, but wear and tear on the property can be difficult to distinguish. Report defects in writing as soon as they arise to protect your position.

CASE STUDY

Property investor Simon Stern bought a two-bed apartment in Glasgow and completed on the sale on March 24 this year.

Inspector Home had been instructed to check a number of units within this development on behalf of an investor group. However, on the first visit they were unable to access this unit because the ceilings had collapsed due to a leak - even though completion had taken place the week before. Inspector Home found that not only was the unit uninhabitable, but the lift servicing the whole block had no telephone line connected for the alarm, which is a serious breach of health and safety. The inspection also uncovered 52 defects in the apartment.

Inspector Home director Vanessa Ambler says: "Because Inspector Home are so experienced in dealing with these issues, we were able to assist Simon with his compensation claim, and not only were his defects corrected quickly, but he received £1,300 compensation in June covering his losses."

Stern says: "Not only did their inspector discover many faults within the unit that I would not have noticed myself, but I am well aware that I would not have achieved this result on my own."


 

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