Warranty provider - potential additional exclusions - impact saleability?

[Hilldes]

I've got the Building Control completion certificate about to activate the 10 year structural warranty (new build).

 

The warranty provider has standard conditions and exclusions that they apply to all warranties - which is fine. For my build, the warranty provider is proposing to add two additional and specific exclusions that will be called out separately that would be visible on the Certificate of Insurance.

 

1. the roof has box gutters which require an insurance back guarantee - I don't have this.
2. the hard landscaping is not 100% complete around the perimeter of the property and the warranty provider says there is a risk that when this is completed it will not leave the required 150mm gap between finished ground level and DPC.

 

I can't recall either of these requirements being specified in the warranty contract at the outset. 

 

I'm concerned these will be viewed negatively by conceryancers or potential purchasers if we sell within the warranty period.

 

Has anyone experience of such additional exclusions and what the impact might be. The warranty provider says additional exclusions are not uncommon. 

[Kelvin]

On the second point. We had this with ours. We got a partial completion certificate while the other barns were being completed as we moved in first as the warranty had this as a condition. Once everything was done I contacted them again and they updated the warranty and removed the condition. 

Edited September 28, 2022 by Kelvin

[Hilldes]

Thanks @Kelvin there was no mention of my hard landscaping condition being temporary but that might be worth exploring. 
 

On both my potential exclusions I’m just not happy about the way they were raised as there was nothing in the contractual type documents at the start which would have forewarned- eg nothing in the contract that said there are elements of roofing such as box gutters that will require insurance backed guarantees. 
 

On the hard landscaping one I just don’t see the risk for the warranty provider. While the structural elements of the property are unlikely to change in the 10 year warranty period, hard landscaping could be changed at any point and lead to water ingress at/above DPC and in the case of a warranty claim the warranty provider would I guess not pay out because damage was caused by the action of the owner. 

These last two ‘defects’  are all that is open from a surprising number raised by the warranty providers technical auditors (not by Building Control) - all of which on my opinion were frivolous. 

[MJamesW]

Its always advisable to get a full list of information the insurer will need before you pay them. Some of this will be financial some will be regarding materials and guarantee's. Its easy for a provider to take your money before they fully explain what hoops you have to jump through at the end so get it in writing . I ve seen house purchases fall through due to this. Generally if one provider is asking for less than all the others then I would be flagging it with them before spending any money. Warranty surveyors may also flag potential issues on their reports that either need more clarification or information so read them carefully       

[Kelvin]

That’s good advice.
 

Generally the odd extra condition shouldn’t necessarily be a problem but in reality banks are really tightening up lending criteria. The problem you then run into is while you can easily explain the background to the condition to your buyer (if you sell say) you never get to explain this to their solicitors directly or the lending bank so you get caught in a loop of despair of ever decreasing circles of email to your solicitor then to theirs then to the bank.
 

When we had our warranty completion certificate problem I  inadvertently got copied in on the email chain between the solicitors. My solicitor had completely mangled my very clear explanation of the problem, and how it was addressed by conflating two different problems and getting both of them wrong. This then lead to a long chain of ever more confusing emails between them arguing about the principle rather than the point. I had to intervene and copy in both managing partners. Two months of delay resolved in one email but only because I got sight of the mess they had created. Therefore, ideally you don’t want any extra conditions on the certificate regardless of how inconsequential they might seem. 
 

 

[Hilldes]

Thanks for the additional input @MJamesWand @Kelvin. Very relevant to where I am currently with this...

 

An update from me - I'm approaching the position where I need to take legal action against the warranty provider. I'm concerned the specific warranty exclusion wording will cause undue concern wth potential purchasers and their solicitors.

 

The wording in particular is this:

 

"It is a condition of this policy that the external finished ground level for the entire perimeter of the Housing Unit must be maintained a minimum of 150mm below the damp proof course. Failure to maintain a gap of 150mm between the finished external ground level and the damp proof course will result in all loss or damage caused by or attributable to water and or damp ingress being excluded from the Policy." 

 

The problem is the "...entire perimiter..." part of the wording. My argument is even the level threshold to the front door (required by Building Regs) contravenes this policy. Also, if further purchasers of the house wished to have a level threshold say for the bifold doors, this would also be in breach of the policy.

 

To give some context, this is the last in a series of issues I've had with the warranty provider's technical auditors raising defects without valid justification. It is a shame because the provider is one that I believe is quite popular on BuildHub.

 

[Kelvin]

Yes you’re right to be concerned about their definition of entire perimeter. I can see their general point but the condition is poorly worded. Just about every new house with a level threshold (typically required for wheelchair access) would fail on this wording. Therefore I’d put this point to them and ask them to re-state the condition. 

[SBMS]

Have you discussed with a solicitor what the cost of an indemnity to protect against this limitation for any future potential buyer would cost? They could get a quote to alleviate your concerns that it could be covered and wouldn’t be extortionate…

[Hilldes]

20 hours ago, SBMS said:

Have you discussed with a solicitor what the cost of an indemnity to protect against this limitation for any future potential buyer would cost? They could get a quote to alleviate your concerns that it could be covered and wouldn’t be extortionate…

Thanks for the idea @SBMS will look into this if I'm not successful in challenging the warranty provider for more appropriate wording.

[MJamesW]

On 08/12/2022 at 17:59, Hilldes said:

Thanks for the additional input @MJamesWand @Kelvin. Very relevant to where I am currently with this...

 

An update from me - I'm approaching the position where I need to take legal action against the warranty provider. I'm concerned the specific warranty exclusion wording will cause undue concern wth potential purchasers and their solicitors.

 

The wording in particular is this:

 

"It is a condition of this policy that the external finished ground level for the entire perimeter of the Housing Unit must be maintained a minimum of 150mm below the damp proof course. Failure to maintain a gap of 150mm between the finished external ground level and the damp proof course will result in all loss or damage caused by or attributable to water and or damp ingress being excluded from the Policy." 

 

The problem is the "...entire perimiter..." part of the wording. My argument is even the level threshold to the front door (required by Building Regs) contravenes this policy. Also, if further purchasers of the house wished to have a level threshold say for the bifold doors, this would also be in breach of the policy.

 

To give some context, this is the last in a series of issues I've had with the warranty provider's technical auditors raising defects without valid justification. It is a shame because the provider is one that I believe is quite popular on BuildHub.

 

@Hilldes dont forget this is an FCA regulated product, you should write to the insurer informing them that you are making a formal complaint and state on what grounds you are making the complaint. The insurer would then have to reply within a certain period of time. If you still aren't happy you can then escalate your claim to the Financial Ombudsman Service. Could save you a lot of money. I am assuming this is a regulated policy as there was one particular company selling unregulated cover which should not be allowed  

[Hilldes]

On 19/12/2022 at 13:48, MJamesW said:

@Hilldes dont forget this is an FCA regulated product, you should write to the insurer informing them that you are making a formal complaint and state on what grounds you are making the complaint. The insurer would then have to reply within a certain period of time. If you still aren't happy you can then escalate your claim to the Financial Ombudsman Service. Could save you a lot of money. I am assuming this is a regulated policy as there was one particular company selling unregulated cover which should not be allowed  

 

@MJamesW the company is regulated and I logged a formal complaint and have the response - in which the proposed wording was revised. I responded saying I was OK with the revised wording. Although it is now 1.5 weeks since I replied and no response from them so far. Overall the delays have cost me several £K as I'm stuck on self build mortgage interest rates. 

[DeanAlan]

On 08/12/2022 at 17:59, Hilldes said:

Thanks for the additional input @MJamesWand @Kelvin. Very relevant to where I am currently with this...

 

An update from me - I'm approaching the position where I need to take legal action against the warranty provider. I'm concerned the specific warranty exclusion wording will cause undue concern wth potential purchasers and their solicitors.

 

The wording in particular is this:

 

"It is a condition of this policy that the external finished ground level for the entire perimeter of the Housing Unit must be maintained a minimum of 150mm below the damp proof course. Failure to maintain a gap of 150mm between the finished external ground level and the damp proof course will result in all loss or damage caused by or attributable to water and or damp ingress being excluded from the Policy." 

 

The problem is the "...entire perimiter..." part of the wording. My argument is even the level threshold to the front door (required by Building Regs) contravenes this policy. Also, if further purchasers of the house wished to have a level threshold say for the bifold doors, this would also be in breach of the policy.

 

To give some context, this is the last in a series of issues I've had with the warranty provider's technical auditors raising defects without valid justification. It is a shame because the provider is one that I believe is quite popular on BuildHub.

 

 

You must be using the same provider as we are @Hilldes

We just had an exclusion proposed on our warranty with these words based on an incorrectly identified defect. The Technical Auditor counted 2 vents when in fact there are 10 and said they are too low when in fact they are 200mm above ground. We're trying to get this defect removed from the record as it is wrong. As per my other thread we do have 2 vents that are low relative to ground but they are not the ones he was looking at. I have a proposed resolution but it is very worrying that you are reporting something very similar.

[Hilldes]

@DeanAlanMy other thread focussed on just the two ‘defects’ that were proposed as policy exclusions. Besides those there was a much larger number of random defects. One example being… the building inspector on the completion visit went up the stairs took photos and raised no issues with the stairs in the report to the warranty provider. The warranty providers technical auditor raised a defect saying stairs wider than 1m need a handrail on both sides. Easily resolved by sending in a photo with a meter ruler showing the actual stairs width was 88cm. Just annoying that it was made without justification and wasted everyone's time.

[Hilldes]

This week I finally received my warranty certificate of insurance - 5 months after I received the completion/final certificate from Building Control. While there have been many challenges with the self build (as we would expect) this battle with the warranty provider has required by far the most effort, frustration and out of pocket expenses. I estimate the out of pocket expenses being around £7K for this 5 month delay - compared to the cost of the warranty policy £1,435.

[Dave Jones]

On 08/12/2022 at 19:08, Kelvin said:

Yes you’re right to be concerned about their definition of entire perimeter. I can see their general point but the condition is poorly worded. Just about every new house with a level threshold (typically required for wheelchair access) would fail on this wording. Therefore I’d put this point to them and ask them to re-state the condition. 

 

entrances are covered by building regs. You do not have to keep to 150 above FFL but you must have installed a vertical DPC instead.