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New Homes Ombudsman: More Regulation or Good News

Helen Rogers, partner & head of new build and Katy Klingopulos, senior associate in commercial real estate & development at BDB Pitmans, comment

Whilst developers are busy getting their sites back up and running in the wake of coronavirus lockdown, industry representatives are continuing work towards setting up a New Homes Ombudsman scheme.  

The end of May saw the Home Builders Federation establish the New Homes Quality Board (NHQB), an independent body that will have responsibility for the quality of new build homes and consumer redress. The NHQB is headed up by its New Homes Quality Champion, MP Natalie Elphicke, and its board membership will include representatives from across the sector as well as key consumer groups. It has assumed the tasks of appointing A New Homes Ombudsman, creating a code of practice for housebuilders and setting up an adjudication service to back up the code. If accepted, it is hoped that the Government will legislate around the independent structure in order to satisfy its published proposals for new housing reform.

Although the code of practice will be devised by those in the industry, the ombudsman will operate independently. The code is expected to require housebuilders to have more robust systems for providing information on consumer rights, dealing with complaints and resolving post-completion snagging issues within defined time scales. 

It is anticipated that the Ombudsman’s powers will include issuing fines, requiring developers to take or abstain from action, directing developers to improve their service and expelling them from membership as well as making recommendations for dispute resolution. However, the powers of the adjudicator to levy fines will be limited to £50,000 – anything above that will need to go to court.  

The code is expected to be under consultation this summer, and for the Ombudsman service to be fully live in early 2021. So what does this mean for developers?

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