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New Homes Quality Code – have you updated your reservation forms?

New Homes Quality Code title image
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Is the New Homes Quality Board a new concept?

The New Homes Quality Board (NHQB) was constituted as a legal entity in January 2021. But it was 2022 that saw the NHQB tasked to “put in place a New Homes Ombudsman Service and develop a new industry code of practice – the New Homes Quality Code“. 

Some readers will be aware that this type of body isn’t unique to our industry and be familiar with previous codes created to ensure building quality and growth in industry standards. To name just two; there’s the Consumer Code for Home Builders, established in April 2010 and the Consumer Code for New Homes.

I mention these to provide a distinction to the NHQB. It’s a new government backed framework to oversee reforms in two areas: The build quality of new homes, and the customer service provided by developers.

Created under the direction of The Building Safety Act 2022 (BSA 2022) the NHQB also established a New Homes Ombudsman Service and a new industry code of practice called the New Homes Quality Code (NHQC). Each one fulfilling a demand of the Building Safety Act 2022.

Is the NHQB compulsory?

The Building Safety Act requires that developers join an approved scheme. The New Homes Quality Board is currently the only approved scheme. Membership to the board demonstrates alignment to the Act’s values, standards of build quality as provided by the Act, as well as upholding the required customer service standards.

Finally, they are demonstrating to their customers that they are accountable to an industry body for their standards, values and build quality. This secures trust with the buyer and shows the integrity of the developer. Most importantly, it ensures high safety and operational standards for developments across the UK.

Obtaining membership to the NHQB requires an initial application followed by an additional nine steps which are listed below: 

New Homes Quality Code - application steps
https://developers.nhqb.org.uk/developers.html

Although the NHQB only launched in 2022, there are currently 94 active developers listed on the register and 316 additional developers with pending applications at this time (Jan 23). Being registered as a member of the NHQB communicates to new home buyers that the UK government’s standards have been met without the need for thorough personal investigation when a buyer may not have the knowledge or expertise to investigate.

Is the NHQB a membership or a governing body?

The NHQB is a membership based organisation with memberships divided into 15 levels of fee. These tiers range from £500 for a dormant company to £220,000 for a Tier 1 developer. Step two of the onboarding process shown in the image above, is invoicing / payment. Once a developer is a member, the board will hold the members to the NHQB terms of membership in accordance with the BSA 2022.

The NHQB has established the New Homes Ombudsman Service (fulfilling the demand of the Building Safety Act 2022). This ombudsman service ‘exists to help customers resolve issues with their new homes, which the registered developer has been unable or unwilling to fix.’ – nhos.org.uk

The NHOS will ensure adherence to The Building Safety Act, making membership to the NHQB less of a badge of quality assurance but rather, alignment to compulsory industry standards. This agreement upholds a national, governmental standard, managed by an independent board.

As a member, developers can face corrective or disciplinary action and even fines for breaching the New Homes Quality Code.

What are the 10 Guiding Principles?

The code has been created by the NHQB in two parts. This first part establishes the ten core principles which developers agree to apply to their business and their dealings with customers.
 
  • Fairness
  • Safety
  • Quality
  • Service
  • Responsiveness
  • Transparency
  • Independence
  • Inclusivity
  • Security
  • Compliance
New Homes Quality Code Guiding Principles
https://developers.nhqb.org.uk/downloads.html

What are the 4 practical steps laid out in the code?

  • Step 1: Selling a new home
  • Step 2: Legal documents, information, inspection and completion
  • Step 3: After-sales service, complaints and the New Homes Ombudsman
  • Step 4: Solvency, legal rights and jurisdiction

What happens if a New Home Reservation form doesn't comply with NHQB?

In addition to buying a new home where the build is complete, a customer may want to reserve a plot. Plots can be reserved prior to construction and are referred to as an early bird or plot-option arrangement. Either way, if a buyer wants to reserve a new home, both parties must enter into a formal reservation agreement. There are 4 key dictates given by the NHQB about the reservation agreements:

  1.  Neither party should enter into a reservation agreement until they have the relevant facts
  2. The developer is responsible for ensuring that the terms are clear, fair and written in plain language. The developer is accountable here for keeping to all relevant legislation.
  3.  An agreement must be signed by both parties, either electronically or in person and the customer must be given a copy. 
  4.  The developer must include all 16 details in their reservation agreement terms provided in section 2.2 of the Consumer Code. These details reflect what the NHQB considers to be clear, fair and in plain language.

The NHQB Discipline & Sanctions Committee investigates any reported breaches of the Code or other disciplinary offences.

If the required standards are not met by the registered developer, or if they do not act in line with the New Homes Ombudsman’s decisions, they may be referred to the NHQB Discipline & Sanctions committee to determine if any corrective action, disciplinary measures are to be applied. These range from retraining, fines being levied, and in severe cases, removal from the Register of Developers.

What is the best way to ensure your forms are compliant?

Developers need to make sure they use forms which are compliant with the NHQB terms. New Homes Reservation forms must utilise all of the specific language, correct details and terminology.

Finch provide an NHQB compliant New Homes Reservation Form. Finch’s smart forms provide the relevant information required by the NHQB to the relevant parties, at the correct time. The Finch New Homes Reservation forms can be quickly adapted to each developer, ensuring that the core elements for compliance remain at the heart of the form, whilst including any additional information required by the developer.

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