The OFT has today published its market study into the homebuilding sector which says that while the sector is broadly competitive, many homebuyers experience faults or delays. As a result, the industry has agreed to develop its own code of conduct and redress scheme for consumers.
The OFT found that homebuyers can experience a number of problems, which include:
- delays in moving in
- faults in new homes, and
- issues around the sales process including reservation fees, the clarity of information provided to homebuyers and potentially unfair terms and conditions in contracts.
As a result, representatives from across the sector have agreed to form a body to deliver a code of conduct and redress scheme for consumers, which it aims to have fully operational by March 2010.
However, if the industry fails to make adequate progress or deliver an effective solution, the OFT recommends further intervention through a statutory redress mechanism. This would involve a means of redress for homebuyers with the ability to award compensation for any failings in the sales process, shortcomings in contracts, delays or faults, and would need to be funded by a levy on the industry.
The code of conduct is being developed by a Cross Industry Steering Group comprising the Construction Employers Federation (NI), Council of Mortgage Lenders, Federation of Master Builders, Home Builders Association, Home Builders Federation, Homes for Scotland, LABC New Home Warranty, National House Building Council, Premier Guarantee, Retirement Housing Group and Zurich Building Guarantee.
Steven Petty, Commercial Property Solicitor
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