Following the introduction of the Building Safety Act 2022 on 1 June 2022 there was a grace period of 12 months until the introduction of provisions surrounding membership of the new UK wide New Homes Ombudsman Service Scheme. Progress appears to be going well and as of April 2023 there were 111 registered developers with 338 pending applications.
Registered developers must (a) pay a fee, (b) provide company information, and (c) demonstrate internal procedures in place for the handling and resolution of complaints about matters in relation to which complaints may be made under the scheme.
In effect membership of the new Scheme is mandatory. If membership is not taken up voluntarily, then the Secretary of State can require the developer to join albeit this can be appealed. The Ombudsman is required to maintain a public register of members of the scheme which applies to homes built or redeveloped following introduction of 2022 Act.
Complaints to the Ombudsman can be made by the owner, occupier or owner/landlord. These complaints are to be made within two years of first acquisition from developer. Historically, there have been a number of different warranty providers, codes of practice and complaints procedures which has led to a lack of consistency and confusion. The purpose of this new scheme is to harmonise the process and implement a single agreed code of practice albeit for the time being the scheme will run in tandem with other dispute resolution schemes such as those provided as part of NHBC warranties.
There will be an annual registration fee which is based on developer annual turnover from the sale of private homes. The New Homes Ombudsman Service Scheme is free for consumers and funded by these registration fees from developers. The dispute resolution process will be by way of adjudication meaning cases will be heard by an adjudicator with any decision being binding on the parties. If a developer fails to comply with one of these remedies, this may result in them being expelled from the Ombudsman Scheme which would mean that they would effectively be barred from the industry (given that membership to the scheme is mandatory).
The Act sets out the requirements of the Scheme and the remedies available to customers, these are:-
(a) paying compensation;
(b) making an apology;
(c) providing an explanation;
(d) taking such other action in the interests of the complainant as the new homes ombudsman may specify.
One interesting question is how the question of expenses will be determined where an application for redress has been made but dismissed by the Ombudsman. Once again time will tell.
The next blog in this series will look at the changes to the law of prescription or "time bar" introduced by the Building Safety Act 2022.
Should you require assistance with any aspect of a construction contract, we have a large and experienced construction team who would be happy to discuss this with you.
