Navigating the Conveyancing Journey for New Build Properties
Guiding your customers through the conveyancing journey for new build properties reassures them about your expertise while ensuring every stage is fully completed
Even to a seasoned property professional, the conveyancing journey for new build properties can seem complex and unintuitive. It’s hard to imagine how intimidating it might seem to consumers, especially people with little experience in the housing market. Concepts like the importance of NHBC inspections and adherence to planning regulations will be lost on homebuyers who see little difference between new build and resale properties.
Being able to navigate these choppy waters and complete the conveyancing journey for new build properties requires a specific skill set. In this article, we consider some of the key steps you’ll have to tackle on behalf of any client purchasing a new home in the UK. We begin by explaining why conveyancing for new builds is more complex than on resale properties.
Losing the plot
Contrary to popular perception, purchasing a new home is a more convoluted legal process than buying a resale property. That’s primarily because more things could go wrong:
- A builder might not execute statutory responsibilities in terms of local authority agreements.
- Site-wide issues could arise regarding the adoption of roads, sewerage management, etc.
- Plot-specific issues may relate to utility connections being incomplete, unsafe or unsuitable.
- The property might breach planning regulations, potentially deviating from approved plans.
- Without NHBC inspections taking place and signoff being achieved, the home can’t be sold.
- Completion delays can be caused by anything from severe weather to material shortages.
Alongside these issues are all the traditional challenges of variable completion dates, and ensuring finance remains in place if the process gets delayed. This is further complicated because some lenders require dedicated new-build mortgages, which may have more onerous lending criteria than conventional mortgages.
The importance of being earnest
While this sounds daunting on paper, any conscientious conveyancer should be able to ensure all the necessary paperwork is completed. For instance, checking the property’s completed design and specifications against planning permission documents from the local council will ensure it doesn’t breach any granted permissions. It’s equally important to identify restrictive covenants and make these known to the purchasers, such as the need to get written permission from the developer before landscaping the front garden.
Because property completion is often a last-minute affair, builders routinely leave paperwork and sign-offs until late on. As a conveyancer, you have to be proactive in terms of chasing up contracts and necessary documentation; don’t assume third parties will execute their responsibilities promptly. Builders often become flustered as a completion date approaches, especially if it’s near their financial year-end, requiring you to act as a bridge between panicking builders and anxious buyers.
A stable structure
To ensure the conveyancing process runs as smoothly as unforeseen delays will allow, we’d recommend drafting up a timeline to follow throughout the various build stages. Ask the builder for all landscape drawings and specification sheets upfront, requesting details of restrictive covenants, factoring and management fees at an early stage. Extend your timeline to the final days, with a tick sheet of approvals and sign-offs to methodically work through.
Finally, be prepared for contingencies which only occur on new homes, such as a snagging provision if the build quality isn’t acceptable. Ensure your clients have suitable new-build finance in place which won’t expire in the event of delays and set a long stop completion date when they can walk away with their deposit. Above all, communicate with your clients – buying a new home is a uniquely stressful process, and they’ll sleep better knowing you’re anticipating each stage on their behalf.
For adviser use only. Please note this content has been supplied by our lender partner and as such, is their responsibility. No party shall have any right of action against Legal & General in relation to the accuracy or completeness of the information in this article.