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Proposed New-Build Homes (Buyer Protection) (Scotland) Bill

Proposed New-Build Homes (Buyer Protection) (Scotland) Bill

A proposal for a Bill to establish standard missives for the sale of new-build homes, including redress for purchasers in respect of defects in construction, is now available for scrutiny and comment.

Graham Simpson MSP, Member for Central Scotland Region, has issued a consultation document for a proposed Bill to establish a standard missive for the sale of new-build homes. This consultation is at the very earliest stages of the Bill process, and now is the ideal time to make representations.

The driver behind Mr Simpson’s proposal is the concern that the existing safeguards and remedies are not sufficient to protect home buyers in the event of a major defect with their new home. To address this issue, Mr Simpson is proposing:

1. standardised missives;

2. a right to inspect pre purchase, and then to delay or to pull out, if any issues are identified; and

3. greater consumer protection through a clear, statutory route embedded in these standardised missives and which is accessible without the need for a costly legal or insurance process.

Standardised missives will benefit everyone; concluding plot sales would become more efficient for all parties. They would also allow the focus to be on plot specific issues, and would simplify reporting by purchaser’s solicitors.

New build missives are already on their way to being “standardised” in the sense that whilst the wording may vary, the boiler plate clauses in most builders’ missives have the same result. The Law Society of Scotland is updating their new build standard clauses, and the previous edition is obtaining traction, and so the process towards standardisation will continue. However, there will always be good reasons for departing from the standard, and we do not think that a statutory form setting out the whole terms of a new-build offer will be necessary to achieve the aims of the consultation.

We would expect that greater consumer protection will be the focus of the next stages with this consultation, and we think that an important part of this consultation will be to define the nature and extent of the problem. Having identified this, then any solution will be able to be more targeted and effective.

However, it is not going to be easy. In the consultation paper, Mr Simpson recognises the complexities in this issue – the costs of investigating defects and the causes of defects and the interaction with the building control function. The direction of travel is therefore likely to be towards some form of ombudsman, but even then this raises questions of funding and liability.

The issues driving Mr Simpson’s consultation paper and the recent other consultations in relation to housing ombudsman south of the border have a momentum and are likely to result in legislation. It is important that Mr Simpson is provided with as much information as possible from all perspectives, to allow the consultation to proceed in a fully informed and effective way.

We would therefore urge all interested parties to respond to the consultation. The deadline is Thursday 27th June 2019.

John Sinclair
Consultant, Property

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