Building Confidence: The New Homes Quality Code and The New Homes Ombudsman Service

With New Homes Week 2024 upon us, we take this opportunity to consider some of the key benefits and protections offered to consumers and developers alike by the New Homes Quality Code and the New Homes Ombudsman Service.

The New Homes Quality Code

The New Homes Quality Code, published in 2021 by the New Homes Quality Board (the 'NHQB'), is, according to the NHQB, a ''code of practice for the house building industry that aims to drive up the quality of new build homes and strengthen protections for customers''.

The code is part of a voluntary scheme which applies to developers who are registered with the NHQB. There is provision within the Building Safety Act 2022 to make the scheme compulsory for all developers, but that has not (yet) been considered necessary by policymakers, possibly because there are hundreds of developers already taking the initiative to register themselves (at the time of writing, there are 240 'active' NHQB registered developers and over 260 'pending' registrations). Developers appear to be recognising the commercial and reputational benefits of registering with the NHQB and undertaking to comply with the code. Homes which benefit from the protections offered by the code will be more appealing to consumers and therefore easier to market and sell.

The code has introduced a number of new rules and standards which registered developers must comply with when building and selling new homes, with the primary intention being to offer increased protections and greater assurances to consumers. Examples of some of these new rules and standards include obligations imposed on developers to:

• Allow purchasers to have a suitably qualified inspector carry out a pre-completion inspection on their behalf.
• Take steps to help potentially vulnerable purchasers make informed decisions when buying a new home.
• Avoid particular high pressure selling tactics.
• Follow a new, five-step procedure when dealing with consumer complaints.

You can read more about some of the specific rules and standards that have been introduced by the New Homes Quality Code in our blog here.

The New Homes Ombudsman Service

Under the New Homes Quality Code, when a complaint cannot be resolved between consumer and developer, there is the option to refer the issue to the New Homes Ombudsman Service (the 'NHOS') within two years of the sale completing. The NHOS was established to provide an improved, easy to access, dispute resolution service to consumers. The service is designed to "provide a free and independent service to customers, which can impartially assess and adjudicate on issues that have arisen that fall within the Ombudsman’s scope". Such issues include "complaints around the Reservation, Legal Completion and complaints management processes, or issues or defects that have arisen at or after occupation and which are not major defects".

Knowing that, as a last resort, there is the option to refer a complaint to an impartial adjudication service provides valuable peace of mind and security to purchasers of new homes. Developers also benefit from the assuarance that there exists a mechanism through which complaints will ultimately be dealt with swiftly and cost effectively.

If you want to read more about the sorts of issues which the NHOS can deal with, see our blogs – here and here.

For more information or advice about the New Homes Quality Code or the NHOS, or for any other queries concerning new homes, get in touch with our Real Estate Litigation team or your usual contact in the Brodies Living team.