Builders Homebond

H

Highlander01

Guest
If a builder does not have homebond, is this a danger zone for me (buying off a builder who builds less than 10 properties per year), what do I have to look out for or how do I cover myself?
 
At common law you have a right of action against a builder for structural defects within 6 years of the contract to build. However, what happens if your builder is a company which goes into liquidation, or your builder has no assets in his name when you seek to recover damages against him, or if he dies? That is where Homebond steps in. It is a kind of insurance against those situations ( among others). If you don't have this homebond protection you leave yourself open to future problems. However if you have a proper professional engineer with professional indemnity insurance and he signs off on each stage ( he is employed to supervise the build by you) then you have the protection of his insurance too as well as the fact that it will obviously be less likely that there will be a problem because of his supervision. There are other kinds of insurance besides Homebond too. If your builder is good, and your engineer is good, you may decide to do without the added Homebond protection.
 
Thanks on that. The situation is that the property is built fully, i've no idea what the original plans were like or how good / bad his engineer was, also, I've had my offer accepted but we're only at verbal stage, do you think I'm a fool for going forward with this or how can I cover myself?
 
That's a matter for you decide. You should take into consideration whether the builder is a man of good standing in the community- whether he has assets, or is a 'fly-by-night'. Also, did his engineer supervise the construction and does he have professional indemnity insurance?
 
This is quite common. A lot of one-off houses are built by builders who are not members of Homebond.

I bought my last house from a builder who was not in Homebond. He did give personal guarantees re. structure etc. in writing.

Your solicitor can give you advice about this.

Get all Certificates from the buyer's engineer.

It wouldn't stop me buying the house.
 
As suggested above lack of Homebond or a similar scheme could suggest a fly by night operator in some cases. On the other hand Homebond only covers serious structural issues anyway and, it seems to me, it can be difficult to get them to look into even these if they arise. It's more important to establish that your builder is reputable and the house is sound (get a survey) than to worry too much about Homebond. In my opinion Homebond is largely a triumph of branding/marketing over substance.
 
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