New Homes Quality Board case study: Change in completion window

There are many moving parts involved when purchasing a property, including mortgage offers and completion notices. This recent New Homes Quality Board (NHQB) case study demonstrates how complaints may arise from a breakdown in communication between the developer and the purchaser, causing the moving parts of a transaction to fail to coincide, ultimately leading to a failed completion.

What was the complaint?

In this case, the purchaser’s main complaint was perceived poor customer service and lack of communication from the developer, triggered by a change in the completion window.

The timeline for completion of the property was extended and, as a result of this, the purchaser’s mortgage offer expired. Before the purchaser had the opportunity to secure a new mortgage offer, the developer served a notice to complete.

Given the increase in interest rates, the purchaser was unable to afford the mortgage repayments, despite being contractually bound to purchase the property. The developer warned the purchaser that they were in breach of contract.

The purchaser complained that the developer failed to provide an explanation as to why the completion window changed and notice of completion was served without any warning, despite the developer being aware that their mortgage offer had been cancelled.

The developer did not address the purchaser’s primary concern when dealing with the complaint, which was the return of the deposit.

Was the homeowner’s complaint upheld?

The complaint was upheld in part and the purchaser was awarded £1,500.

The New Homes Ombudsman concluded that there had been a clear breakdown of trust, and the developer failed to investigate the issues raised by the purchaser.

Furthermore, the developer did not follow the complaints procedure set out in section 3 of the New Homes Quality Code (NHQC). The fact that the purchaser raised their complaint after the failed completion does not negate the requirement of the developer to deal with the complaint.

Although the NHQC makes provision for the refund of the deposit to a customer if a developer cancels the contract for sale, it does not provide for the refund of the deposit when the transaction is cancelled by a customer. As a result, the complaint was upheld in part.

Practical tips

In order to mitigate the risk of purchasers making successful complaints regarding changes in completion windows, developers should ensure that:

• purchasers are kept updated throughout the transaction when any changes need to be made to the completion window;
• developers should provide reasoning as to why completion may be delayed;
• it should be made clear at the outset of the transaction that completion dates are not final and are conditional on certain factors;
• contract terms should be set out in clear language and the contract must define the completion notice period;
• developers should follow the complaints procedure set out in section 3 of the NHQC, even when complaints are made following completion or failed completion; and
• developers should ensure good customer service is provided at all stages of a transaction and should provide adequate training to staff members to achieve this.

Reach out to one of the experts listed below for advice on the New Homes Quality Code and/ or policies and procedures.

^{This article was co-authored by trainee solicitor, Abbie Lockwood.}