Overview of the Scheme
One of the fundamental aspects of the Consumer Code for New Homes is the provision of access to a free and effective Dispute Resolution Scheme in the event that a dispute arises between a Buyer and a registered Developer. This can help to avoid costly and protracted legal action.
The Consumer Code for New Homes Dispute Resolution Scheme is operated by:
The scheme is independent of the Developer and the Warranty Bodies and any matter referred to this scheme concerns Disputes under the Consumer Code for New Homes only. The adjudication will be independent and conducted by a trained independent Adjudicator who must be a member of the Centre for Effective Dispute Resolution (CEDR).
The Independent Dispute Resolution Scheme is applicable in the event that a dispute arises between the Buyer and the Developer where agreement cannot be reached within 56 calendar days of the complaint being raised with the Developer.
NB: Decisions made by the Independent Dispute Resolution Scheme are not insured under the Structural Warranty.
Dispute Resolution Scheme
- 1. The Buyer must complete an application form and send it to the Independent Dispute Resolution Scheme with their statement of evidence. Their statement must contain all the information relevant to the complaint together with copies of receipts or other evidence of expenditure.
- 2. The Adjudicator will ask the Developer to respond to the Buyer’s statement. At this stage the Developer may resolve the complaint without formal adjudication – this is called “early settlement”.
- 3. If early settlement does not happen, the Developer must submit their response to the Buyer’s statement. The Buyer will be given a copy of the Developer’s response and asked to respond if they wish. At this stage, the Buyer may not make any further new complaints about this adjudication.
- 4. The Adjudicator will review written submissions from both parties and decide whether or not a Buyer has a legitimate Dispute and has suffered financial loss and/or emotional distress and/or inconvenience and if so how much loss/emotional distress/inconvenience because the Developer was in breach of the requirements of the Consumer Code for New Homes. Both parties will be expected to have acted reasonably and to have controlled their costs.
- 5. The Adjudicator will make a decision and send it to both parties. The decision may be a performance award (where the Developer has to do something) or a financial award (where the Developer has to pay the Buyer money) or a combination of the two.
- 6. The Adjudicator’s decision cannot be appealed; it can only be accepted or rejected by the Buyer.
Under the terms and conditions of their registration with the Code, the Developer will honour any award made against them under the CCNH Independent Dispute Resolution Scheme.
The Adjudicator’s decision may comprise any of the following:
- The maximum value of any award will be 25% of the contract price of the New Home subject to a maximum award of £50,000 (inclusive of VAT) in the aggregate for all claims arising in respect of the New Home.
- Awards for emotional distress and/or inconvenience, subject to a maximum award of £1,000.
- Comply with any performance award that may be advised by the Adjudicator.
- Comply with any combination award i.e. a combination of reimbursement of financial loss, compensation for emotional distress and inconvenience not to exceed £1,000, and carrying out work on the New Home.
- Referral of the Developer to the Disciplinary and Sanctions Process.
- Pay the Buyer the amount of any such award if accepted by the Buyer within the period for payment required by the Adjudicator.
The Developer remains liable to pay the Adjudicator’s award, even if they are no longer registered with the Code. The agreement between the Code and the Developer governs the contractual relationship in relation to the terms of this Code, which requires the Developer to agree to comply with the terms of the Consumer Code for New Homes and expressly undertakes to comply with any decision given as a result of the Independent Dispute Resolution Scheme and accept the award of the Adjudicator.
If the Developer fails to accept the Adjudicator’s award, CCNH may take legal action against the Developer to enforce the terms and conditions of the award.
What is not covered by the Dispute Resolution Process?
The Consumer Code for New Homes does not cover Disputes that concern:
- Claims that are covered by the Structural Warranty.
- Claims that exceed the Dispute Resolution Scheme’s limits of 25% of the purchase price of the New Home subject to a maximum award of £50,000 inclusive of VAT in the aggregate for all claims arising in respect of the New Home (including, for the avoidance of doubt, awards for emotional distress and/or claims for inconvenience).
- Personal injury claims.
- Loss of property value or blight.
- Claims about land conveyed or its registered title.
Matters within the scope of other Dispute resolution or ombudsman schemes should be referred to the relevant organisation. In such cases, these schemes may take precedence over the Consumer Code for New Homes and its associated Dispute Resolution Scheme.