Understanding Developer Warranties and Guarantees

There are lots of great reasons to buy a Tilia new build home, and one of these is that it will come with a 10-year NHBC warranty.

What exactly is a new home developer warranty (or builder warranty), and what does it cover? In our latest Tilia Homes blog, we’ve summarised the basics of a developer warranty for new build buyers.

What is a new build home developer warranty?

A new build developer warranty is an insurance policy, taken out by the developer and its purpose is to protect the customer (the person buying the new home).

The warranty covers the first ten years of the new home’s life. This is divided into two periods: the first two years and the remaining eight years. During the first two-year period, Tilia Homes (developer) is responsible for fixing defects (snagging). You may hear this referred to as the “Developer Liability Period”.

After two years, responsibility for defects passes to the homeowners; however, the Structural Insurance Period still has eight years to run. This provides protection against any major structural issues that may occur. (We’ll look at examples of defects and structural issues shortly.)

The good news is that this insurance stays with the property. So, if you purchase a house that's, say, seven years old, you still have three years of the developer warranty left to run.

Many developers, Tilia Homes included, use the NHBC Buildmark policy.

What is the NHBC?

The National House Building Council (NHBC) provides independent warranties and insurance for new build homes in the UK. They first introduced the two-year building warranty about 80 years ago, which is the foundation of today’s Buildmark scheme. The NHBC sets the standards for the new build industry: if your new home meets the NHBC Standards, you know it meets all the relevant building and fire safety regulations.

What does my developer warranty cover?

Developer warranties for new builds cover three broad areas: defects, structural issues and your deposit.

● Deposit - if the developer goes out of business before your home is built, you’ll get your down payment back

● Defects - for the first two years e.g.

○ Defective plumbing

○ Defective wiring

○ Issues with your windows and doors

● Structural issues - for the first ten years

○ Roof

○ Foundations

○ Load-bearing walls

What doesn’t it cover?

The developer warranty doesn’t cover everything that could go wrong with a new build property. Here are examples of some exemptions:

● Defects after the first two years (which is why initial snagging is so important)

● Structural issues that aren’t the result of poor building work

● Weather damage

● Wear and tear

● Poor maintenance issues

● Damp or condensation that hasn’t been caused by the building work

How do I claim?

During the first two-year period, report any defects directly to the developer. It’s important to note that these have to be reported as soon as possible: any delay can mean that it’s not covered by the warranty (you don’t want a defect to have time to become “wear and tear”). After this period, any structural issues need to be reported to the insurance provider. Contact Tilia Homes here.

What is the difference between a developer warranty and a guarantee?

These terms tend to be used interchangeably, but there is a difference between guarantees and developer warranties. New build homes tend to be protected by a combination of the two.

A developer warranty tends to be based on standards, while a guarantee takes care of the development from a financial point of view. So, the warranty looks at the defects and structural issues, while the guarantee protects the customer from the developer becoming bankrupt or insolvent.

Do I still need building insurance if I have a new build warranty?

Yes, you’ll still need to take out building insurance when you buy a new build home - indeed, your mortgage provider will probably make it a condition.

This is because the warranty only covers issues caused by inadequate building practices. It won’t cover any structural damage resulting from factors like bad weather or subsidence. So yes, you’re insured against some structural defects, but only those caused by the developer. Building and contents insurance remain essential.

Buying a new build home with Tilia Homes

When you buy a new build home from Tilia Homes, you’ll receive the 10-year NHBC Buildmark policy, which we hope will give you peace of mind in your new home.

Find out more about the Tilia Homes building warranty. If you have any questions about new build developer warranties, please contact our expert team.