1. What is NHBC?
National House Building Council (NHBC) is one of the major new home warranties and insurance providers in the UK. Its main purpose is to raise and uphold the standard of a new home and to offer protections to homeowners. NHBC was established in 1936. It is independent of government and is running by individual members who are working or interested in the house building industry.
2. What is Buildmark cover?
Buildmark is a home warranty and insurance product provided by NHBC. It is a 10-year warranty split into a 2-year builder warranty period and a further 8-year insurance cover for the damages caused by the defects in the structure of the property. It also offers deposit protection for the paid deposit after exchange of contract. The usual deposit protection amount is 10% of the purchase price up to the maximum of £100,000. Therefore, it is a product that offer protection to home buyers from exchange of contract to legal completion and post completion.
3. Who can enjoy this Buildmark cover?
Buildmark cover goes with the property, whoever owns the property will enjoy the protection offered by the Buildmark warranty and insurance. The Developer and builders will apply and pay for the Buildmark warranty and insurance when they register their building sites with NHBC. They are required to build the properties in accordance with the NHBC standard so to enable themselves to offer a 10-year Buildmark cover to the buyers.
4. What is covered by Buildmark?
The covers include deposits protection, 2 years’ builder warranty and 8 years’ insurance cover for specific parts of the property. If after exchange of contract the builder becomes insolvent and the paid deposits cannot be recovered, buyer will be able to make a claim under the insurance cover in order to obtain compensation. The Buildmark also covers the 2 years period after completion. During this 2 years period, the builder is responsible for rectifying any issues that are caused by its failure to build up to the NHBC’s standard. From the end of the builder warranty until the policy comes to an end, which is usually around 8 years, Buildmark provides insurance cover on the structural defects (as opposed to wear and tear or damages caused by the occupier) appears in the property. However neglect or damage caused by fire or smoke are not covered under the Buildmark policy.
5. Is Buildmark cover transferrable?
Buildmark cover is transferrable. When the property is sold, the remaining term of the cover will be transferred to the new owner. When you are buying a property with an existing Buildmark home warranty and insurance, your seller should provide you with the Buildmark certificate and policy. You can then notify NHBC upon moving into the property that the property is transferred to you. A duplicate can be issued if the seller has lost the Buildmark documents. You can also check with NHBC if you are not sure whether the property is covered by NHBC warranty and insurance.
6. Can I alter the property after legal completion?
Buildmark cover does not cover any alteration work including but not limited to any addition or extensions which will result in additional space to your home carried out after completion. Alteration includes building work such as taking away existing walls or partition in the property. It will not provide compensation to any damages or loss caused by the alteration as the work was not carried out by the builder. Therefore, if you wish to alter your home, you should first read the Buildmark policy in details and obtain advice and approvals prior to the commencement of any alteration works.
7. What is the procedure of claiming the Buildmark?
Firstly, the Buildmark cover documents should be ready so that you can check whether the problems identified are covered by the warranty and insurance and that the policy period has not expired. You should obtain a duplicate if you are not holding the certificate and policy. Then, you should notify NHBC of your current situation and that you would like to make a claim under the policy. NHBC operates a minimum claim value which is contained in the policy. If the costs of your claim are less than the minimum claim value, NHBC will decline your claim. Therefore, you should assess whether the claim is going to meet the minimum claim value before contacting NHBC. Once NHBC has received your request, they will be in touch to provide further assistance.
8. Is there a cap on the claim value?
There will normally be a cap on the amount NHBC will pay for the claims arises after legal completion and you should always refer back to the policy documents to find out such amount. Generally, the amount is the original purchase price up to £1M, subject to the adjustment by NHBC in special circumstances. The limit will also be increased on each anniversary of completion.
Author: Zhong Lun Property Team
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