What is the difference between a structural warranty and Consumer Code protection?
Structural Warranty Insurance, otherwise known as Building Warranties or Latent/Inherent Defects Insurance, is a long-term insurance contract that typically provides cover for a 10-year period. It is freely assignable and covers the cost of rectifying damage that occurs as a result of an inherent defect.
Examples of inherent defects can include faults in the design, installation, workmanship and materials that resultantly affect the structural integrity of a building.
Structural warranties cover the full reinstatement value of a property, meaning they will restore the build back to its original specification. Structural warranties are principally required by mortgage lenders. They will insist on a warranty to cover a newly built or converted property they are looking to lend against.
Structural warranties offered in respect of all properties sold on the open market will also come with protection under an accredited Consumer Code scheme such as the Consumer Code for New Homes which is approved by the Chartered Trading Standards Institute.
What is the Consumer Code for New Homes
Protection under the Consumer Code differs from a structural warranty in that it is concerned with ensuring that best practice is followed, and higher standards set, in respect of the marketing, selling and purchasing of new homes. It also sets out expected standards for after-sales customer care.
The Code provides a clear consumer complaints process supported by an independent dispute resolution scheme for consumer complaints that are made in writing to the developer within two years of the date of the completion of the new home purchase.
In summary, a structural warranty relates to a policy underwritten by an insurance company to provide cover in the event damage is caused to the structure of a home by an inherent defect. Code protection, on the other hand, ensures that buyers of new homes receive a fair and clear pre- and post-sales service from their developer and selling agent. It ultimately offers redress in the event best practice is not followed by a developer supported by an independent dispute resolution scheme.
It is important that adequate cover is in place under both a structural warranty and Consumer Code for all buyers of newly built or converted properties.
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If you have questions about the Consumer Code for New Homes or structural warranties, don’t hesitate to get in touch.