New Rights for House Buyers
The new Consumer Code for Home Builders came into force on 1 April 2010 and provides significant new protection for those who buy homes 'off plan'.
The Code requires builders of houses to keep buyers informed of the progress of the construction work. It specifically requires builders to provide 'reliable and realistic' information regarding completion of the construction, handover dates and the date on which the completion of the contract for purchase may be expected.
Buyers must also be advised that they have the right to withdraw from the purchase if there is an unreasonable delay in completing the construction of the home and serving the notice to complete. The Code sets out a standard form of wording for use in such circumstances. The buyer may terminate the contract if the builder fails to serve notice to complete the sale within six months for houses and twelve months for flats, where contracts are exchanged before the building is weatherproof. If contracts are exchanged at an advanced stage of construction, the buyer has the right to terminate the contract if the builder fails to serve notice to complete the sale within two months for houses or four months for flats.
Builders should be aware of the new Code and ensure that their sales documentation is compliant. Contact Cindy Rai for advice.