New Build Conveyancing

Buying a new home?

Read this first.

Buying a new home is a fantastic experience. As the first owner you have the opportunity of using the blank canvas of the new property to express your own character. As the property takes shape and form you have the excitement of anticipating its completion.

From a legal point of view, purchasing a newly built property is significantly different from where you negotiate the purchase of a pre-existing property from its current owner. Some of these differences are pretty fundamental and are dealt with here.

McVey & Murricane are recognised as one of the foremost practitioners in this area and you can instruct with confidence. Why not use our online conveyancing quotation to find out how you can instruct our New Build Service.

When do I get the keys?

In practical terms the most important issue of which you should be aware is when you are likely to have possession of your new house and when you have to pay for it.

Golden Rule: there are no guarantees when the property will either be completed or ready for occupation. When you see the new property in which you are interested, generally the builder will provide you with an anticipated completion date. You can be certain however that the contract offered by the builder for the purchase of the property will not guarantee that date or indeed any date. You can also be certain that the builder will not accept any alteration to this clause.

Why is this? There are many factors which can delay a new build property: Bad weather, availability of materials, availability of qualified skills and many other more esoteric issues can all play a part. Equally, the property cannot be occupied by anybody until a "Habitation Certificate" has been granted by the local authority. The lack of such a Habitation Certificate not only prevents you occupying the property legally but it also means that your mortgage funds will not be available as that is a specific condition of the mortgage offer. While local authorities make every effort to deal with such circumstances speedily and effectively there can be occasions where there is a delay for the relevant Building Control Officer to be able to check the property.

What are the implications for you? The first thing is to keep in touch with the builder to ascertain progress with the build and the likely completion date. This means that you have a good idea of the timing though, for the reasons stated above, you cannot rely on this. Arranging expensive and important items such as removals, deliveries of new furniture and other similar issues should not be formalised until you have a note of the actual date of completion. Usually the builder will let you know when the property is complete and the date on which it is due to be inspected by the local authority. Once the property has been approved by the local authority, generally completion requires to take place within 14 days. 

You should not enter into related contracts based upon the completion date until it has been passed by the local authority. Sometimes you may take a view that such is the likelihood of the property being completed and passed by the local authority, #you will enter into removal contracts and the like, however this is entirely at your own risk and neither the builder nor McVey and Murricane can be responsible if something goes wrong.

While the property will have an habitation certificate it may be many years before the completion certificate for the property will be granted. This is because the local authority will often not issue the completion certificate for houses in an estate until all are complete. Accordingly, the date of the completion certificate is uncertain. It is a good idea to stay in touch with the local authority during this period to ascertain that they are renewing the habitation certificate and when they issue the completion certificate - this is something you need to do yourself and does not fall part of our service to you.

How do extras work?

This varies with different builders. Some require payment when the extras are instructed and others at the time of the actual purchase. McVey and Murricane have no interaction and can have no interaction with the issues of extras. These are contracts between you and the builder and you should carry out the checks and diligence that you would be carrying out if you are ordering these items from any other source. 

If you are concerned about materials, then ask for samples etcetera. Sometimes, the amount of the extras is not known until the date on which you are paying for the property. Normally, in these circumstances, we will ask you for the funds that we know about and if there are last minute alterations then we ask you to pay a separate figure for these late notified items.

What happens if I find defects when I take possession of my new house?

Except in very rare circumstances, in which case we will have discussed the matter with you, your new home will have the benefit of a guarantee issued by the National House Building Council or on occasion an insurance company. These guarantees will, unless we advise you otherwise before you enter into the contract, contain two elements. The first element will deal with defects in the property commonly known as "snagging". The second element of the guarantee will deal with structural aspects. In addition to this the contract with the builder may include further clauses dealing with the "handover" of the property.

Broadly speaking the larger the builder the more organised and professional will be their treatment of defects within the property. You should categorise any issues that you encounter with the property in the following way:

• obvious defects and things not working when you initially take occupation of the property (even if you are not moving immediately go round the property making a list of everything that may be an issue)
• repair type issues that arise within the first two years. If there is a National House Building Council guarantee it will generally provide that the builder should correct such items. This will not include things like cracking that appears in the paint because that is a natural corollary of the new house settling down. However, if a crack should appear externally then that something would fall within the guarantee
• structural issues that occur within the first 10 years of the life of the property. Thankfully, such matters are very rare but it is important to intimate these to the builder should anything transpire

Generally speaking you will have bought with your new house white goods in the kitchen, central heating and the like. It would certainly be normal for the builder to accept responsibility for fixing anything that is obviously wrong when you take possession but their ongoing responsibility is limited. You still have your statutory rights in respect of the supplier and it is a good idea to fill in the guarantee cards that come with the equipment and to take a repair maintenance contract with a reputable supplier.

Are there restrictions on how I can use my property?

Almost certainly yes. If you have purchased a new house with a driveway or parking place, you will find that there are restrictions on how you can use the driveway or parking place. You will almost certainly be prevented from parking a lorry, caravan, boat or other similar trailer. If there is a garage you will find that this is not to be used as a workshop. Normally, there is a prohibition on using the property for work purposes. There have been cases in the past where a piano teacher fell afoul of such a rule and regularly any profession or trade that requires a name plate will be prohibited in terms of the titles.

A good rule of thumb is that if something is going to potentially annoy the neighbours, you will find that it is prohibited.

There will be obligations to maintain and insure the property. If the property is a flat these obligations will be more extensive and certainly include the appointment of and payment for a factor or managing agent. If the property is a house there is often also a factor to deal with the common spaces and, for instance, playground areas. All of these will require annual contributions.

These obligations are enforced by deeds created by the builder which will appear in your title, usually but not always called “Deeds of Conditions”. If there is more than one such Deed in your title, charges may be levied under each or some of them. You should ask your builder for a guide to anticipated charges, but it may not be possible for full details to be provided as actual costs may depend on future events. Multiple Deeds of Conditions may apply if your house or flat lies in a development which is part of a larger one, or where there are unusual infrastructure items to be maintained (eg quay walls in dockland redevelopments).

What if the roads and footpaths have not been completed?

It is often the case that the roads and footpaths within the development are not completed when you take entry to your new house. We will have ensured that the builder has an obligation to complete the roads and footpaths and that there is a guarantee for this completion known as a "Road Bond". While the funding of the roads and footpaths may be guaranteed, that does not mean that there will not be annoyance and inconvenience from the completion of the roads and footpaths. This is one of the joys of buying a new house, though these days the major builders go to great lengths to ensure that the inconvenience is kept to a minimum.

In addition, the actual date of completion of the roads and footpaths is not guaranteed. It can be far into the future.

What is Help to Buy

The Help to Buy (Scotland) scheme was introduced in 2013 in order to help first time buyers and existing home owners to climb the property ladder with help from the Scottish Government. Due to the initial success of the Help to Buy Scheme, earlier this year the Scottish Government announced their 3 year continued plan for the scheme which will operate until 31st March 2019.

The Scottish Government introduced two Help to Buy funding schemes;

• The Help to Buy (Scotland) Affordable New Build Scheme is available to larger homebuilders, such as Persimmon, Miller Homes etc; and
• The Help to Buy (Scotland) Smaller Developers New Build Scheme is available to smaller home builders

The schemes provide homebuyers with a maximum contribution of 15% towards the purchase price of a new build home.

Can I buy any new build property?

The scheme is only available if the new build home is purchased with a “participating home builder” a list of which can be found here. Additionally, there are restrictions on the purchase price of the property, Help to Buy funding is only available if the purchase price is on or below the threshold amounts noted below; essentially you cannot purchase that mansion you had your eye on!

As mentioned above, the scheme is scheduled to operate until 31st March 2019 and the relevant purchase price thresholds for the next three years are noted below;

• For financial year 2016/17- This applies to purchases which settle on or before 31st March 2017, the threshold price is £230,000;

• For financial year 2017/18- This applies to purchases which settle on or before 31st March 2018, the threshold price is £200,000;

• For financial year 2018/19- This applies to purchases which settle on or before 31st March 2019, the threshold price is £175,00

How do I pay for the rest of the purchase price?

The Help to Buy Scheme is made up of 3 parts;-

• Deposit
• Mortgage Funding
• Scottish Government funding

Deposit 

Another benefit of the Help to Buy Scheme is that you are only required to provide a 5% deposit of the purchase price of the new build property, as opposed to the generally higher deposit required to purchase a property.

Mortgage funding

The majority of the funding for the property will come from a mortgage however; in order to qualify for the scheme, you must make sure that your mortgage lender is one of the participating lenders noted here and that the mortgage you obtain is a repayment mortgage.

As mentioned previously, the maximum contribution the Scottish Government will provide is 15% and your contribution can be calculated as follows;-

Will I own the property jointly with the Scottish Government?

When do I need to repay the Scottish Government’s contribution?

Re-mortgaging

Further Information