Thinking of buying a new build home? Key legal issues to consider before you exchange

Elliot Aish, Partner and residential conveyancing solicitor at Boys & Maughan

New build homes are an increasingly important part of the East Kent property market, with substantial development across Thanet, Canterbury and the surrounding area. They offer modern design, energy efficiency and the chance to move into a brand-new home.

However, buying a new build is not quite the same as purchasing an established property. There can be more documentation, tighter timescales and extra questions about the development as a whole, including warranties, estate management arrangements and completion dates.

Here Elliot Aish, Partner and residential conveyancing solicitor at Boys & Maughan, explains some of the key issues to understand before you exchange contracts.

Reservation agreements and exchange deadlines

The process often starts when you reserve a particular plot and pay a reservation fee. The reservation agreement should set out the price, fee, proposed exchange deadline and what happens to the fee if the purchase does not proceed.

Send the agreement to your solicitor promptly. Developers commonly work to a relatively short exchange timetable. Around four to six weeks is familiar in the new build market, although this varies. Where the New Homes Quality Code applies, the exchange date should normally be at least six weeks after reservation unless the buyer asks for an earlier date.

Early preparation is therefore important. Your solicitor will need identification and source of funds information, and your mortgage application should be progressing. The deadline matters, but it should not become a reason to cut corners.

Look beyond the individual property

With an established home, much of the surrounding area is already there to see. On a new development, the estate may continue to change considerably after you move in.

Your conveyancer will consider the planning permissions and other documents governing the development, including matters such as roads, open spaces and infrastructure. Look carefully at the wider site plan too. What is intended for neighbouring land? Where will roads, play areas, parking spaces and bin stores be located?

Check the new home warranty

Most buyers expect a newly built property to come with a warranty or insurance product from a recognised provider. Your conveyancer will check the documentation and, if you are using a mortgage, whether it meets your lender's requirements.

NHBC Buildmark is one well-known example, although other providers and schemes are available. A warranty provides useful protection, but it does not mean every defect will automatically be covered. Understand what the policy includes, any exclusions and how problems should be reported.

Tell your solicitor about developer incentives

Developers may offer incentives such as flooring, upgraded fittings, cashback, contributions towards legal or moving costs, or an amount towards Stamp Duty Land Tax.

If you are buying with a mortgage, these incentives need to be dealt with correctly and your lender may take them into account when considering the valuation and mortgage offer. Tell your solicitor and mortgage adviser about everything the developer has agreed to provide or pay for, even if it seems minor.

Understand management charges, roads and sewers

Many modern developments include landscaped areas, private roads, drainage systems and other communal facilities. These are not always adopted and maintained by the local authority. A management company may instead be responsible, with the cost shared between homeowners.

This means even a freehold house can be subject to an annual estate or management charge. Your conveyancer should explain what services are provided, how the charge is calculated and the legal arrangements requiring owners to contribute. Consider not just the current estimate, but how charges might change in future.

You should also understand who will maintain the roads and sewers. If they have not been adopted, your solicitor will check whether agreements are in place for future adoption and what applies in the meantime. Where roads, drains or other areas remain private, owners may have to contribute towards maintenance.

Check exactly what you are buying

Plans are particularly important on new build purchases because the property may not yet have its own separate registered title at HM Land Registry.

Check that the transfer plan shows everything you expect to own or use, including the house, garden, parking spaces and garage. Your conveyancer will also consider any important rights affecting the plot.

Modern developments often include restrictive covenants governing matters such as extensions, alterations, parking, commercial vehicles, boundaries and front gardens. These are not necessarily a problem, but you should know about them before exchange, particularly if you plan to alter the property.

Your moving date may not be fixed

If the property is still being built, you may exchange contracts without a fixed completion date. Instead, the developer will serve notice when the home is ready, with completion taking place a set number of working days later.

Ask about the anticipated build date, how much notice you are likely to receive and what the contract says if construction is significantly delayed. A suitable longstop date can be important because it may eventually give you the right to withdraw if the property has not been completed.

Delays can also have practical consequences. Mortgage offers can expire, removal arrangements may need to change and buyers selling another property need to consider how the transactions will fit together.

Inspect the property as well as the paperwork

Conveyancing deals with legal title and legal risk. It is not a building inspection, and your solicitor does not check the physical quality of the construction.

Where possible, inspect the finished property before completion and consider a professional snagging or pre-completion inspection. A structural warranty and a physical inspection perform different roles. If defects are identified, make sure you understand the developer's procedure for reporting them and having them put right.

Specialist new build conveyancing

A new build purchase can involve the wider estate, planning and infrastructure, warranties, management arrangements, incentives and lender requirements, often within a demanding timetable.

Boys & Maughan's residential property team regularly acts on new build purchases across East Kent and beyond. If you are thinking of reserving a new home, speaking to a conveyancing solicitor at an early stage can help you meet the developer's timetable while making sure the necessary checks are carried out before you become legally committed.