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Many people love the idea of buying a new build home as it comes with the benefit of having a ten-year warranty and is chain free. Sue Taylor, Conveyancer in WSP Solicitors Residential Property Conveyancing department examines the conveyancing process when buying a new build property.
The legal process for buying a new build property is however more complicated than for a property which has been previously owned. Not only does your Conveyancer have to carry out the normal checks on the title, they have to ensure that the property has been built in accordance with building regulations, planning permissions, agreements with the local authority, water authority Highways authority and utility providers.
It is likely that the developer will impose covenants (or restrictions) and could also include a requirement to pay a contribution towards the maintenance and upkeep of common or amenity areas within the development. Your conveyancer will make you aware of these.
Once you have made a reservation, you will be given a certain period of time from the date until you are expected to exchange contracts. This is usually four weeks. In the current climate this may be inadequate. It is important therefore that before you sign the reservation form that you have all of your arrangements in place for a mortgage and deposit funds available.
If the new property is ready for occupation, the developer may agree to a fixed completion date. If it is not ready, completion will be on notice (usually two weeks) from the time that it has been passed as “fit for habitation” and has had a satisfactory final inspection by the Building Inspector.
If you are selling your existing property to coincide with the purchase, you should inform the site office before reserving the property, especially if you have not sold your existing property. You must also inform any potential buyer of the anticipated build complete date and the developer’s requirements so far as completion is concerned. Most will not be happy to agree completion on notice and will want a fixed date. If this happens, you will be required to move out and go into temporary accommodation until the new property is ready.
When you have signed the reservation agreement you will pay your deposit. This would not be refundable if you were to withdraw from the property or if you fail to meet the deadline set by the developer and they withdraw the property from you. In some circumstances the developer would be willing to extend the deadline for exchange but this is not always the case.
When all investigations have been completed and you have signed the contract, you are agreeing the purchase the property at the price agreed and to pay the balance on completion. The price is locked into the contract and will not take into account any market fluctuations in the value of property.
Before you exchange contracts you should have in place sufficient funds to enable you to complete the purchase whether this be from your own resources (including the sale of your existing property) or from mortgage finance.
The majority of mortgage lenders offer will hold good for six months from the date of issue but if there is going to be a long period between exchange and completion, it is best to check at the time you apply, that your lender is able to extend their offer.
After you have exchanged contracts, the developer will be able to change the design, materials or boundaries from the original specification notified to you. Any major changes will have to be notified to you so that you can agree these.
Once the developer has finished the build and notice has been served that it is ready for occupation, you will be invited to visit the property to inspect it. You will be able to ensure that everything is in order and compile a snagging list of any works that are outstanding. You will not be permitted to delay completion if only minor works are needed and will need to negotiate with the developer as to when the works will be carried out.
Your Conveyancer or Property Solicitor will be able to guide you through the process, working on your behalf in the property transaction. Our expert Residential Property Conveyancing department have specialist experience in dealing with all kinds of property transactions, including new build properties. Get in contact today and we can help make your new build purchase less complicated. You can contact us here or using the form on this page. Alternatively you can call us in 01453 847200.
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