Buying a new build property or building a new home yourself? Both offer a lot of opportunities but also an element of risk. Our answers to frequently asked questions explain how a structural warranty can protect your investment. And there’s a particular focus on what an LABC warranty offers.
What is a structural warranty? A structural warranty policy protects homeowners against the cost of having to repair or rebuild the structure of their property. Primarily, it protects you against structural problems caused by any kind of mistake or defect in the design, materials or methods used to build your home.
This is a valuable form of guarantee to have for any new build home. Unlike older properties, new builds haven’t had enough time to ‘settle in’, so any number of structural issues around plumbing, heating, damp, etc. will not have had time to show yet. This is one of the drawbacks of buying a new build.
What does LABC stand for?LABC stands for Local Authority Building Control. It is an independent, not-for-profit organisation that represents all local authority building control teams in England and Wales. Its mission is to ensure that all new buildings are being constructed to sufficiently high safety, quality and performance standards. LABC Warranty is specifically a separate organisation that partners with LABC to provide the warranty.
Is LABC the same as NHBC?LABC Warranty is one of three main providers of structural or ‘new home’ warranties, along with the National House-Building Council (NHBC) and Premier Guarantee. Together, these three organisations carry out most of the UK’s surveys of new build contractors’ work, ensure that it follows the relevant codes of conduct, and supply warranties to guarantee it.
Do all new build homes come with a warranty?There isn’t a legal requirement for a new build to have an LABC Warranty, or any structural warranty from another provider. However, most of the UK’s major banks will insist on a warranty like these before they offer a mortgage.
Can you sell a new house without a warranty?It is possible to sell a property that isn’t covered under a structural warranty. However, financial lenders won’t agree to any mortgage deal without one in place. So, without a structural warranty, you will find that you have a greatly reduced range of potential buyers.
How much warranty should a builder give?Property developers must provide at least a 10-year structural warranty upon completion of the construction works. Most builders will opt for this length of coverage, though some provide longer warranties.
What does an LABC Warranty cover?The protection of an LABC Warranty ranges across practically any major structural defect a new build home might encounter. They split the cover into two time periods – the defects insurance period and the structural insurance period.
The defects insurance period covers the first two years after construction ends. During this time, the property’s builder will fix any issue with any part of their work. This covers anything from damp and improperly sealed windows, to major structural weaknesses in the roof or foundations.
The second ‘structural insurance’ period covers the remaining eight years (from year 3 to year 10). By this time, if there are any defects in the builder’s work they will likely have already been found. During these eight years, the builder is only responsible for ‘major structural issues’ such as problems with the roof, ceilings, walls, chimneys and load-bearing parts of the property. Smaller issues with things like gutters or fixtures and fittings now become the homeowner’s responsibility.
Does LABC Warranty cover deposit protection?An LABC Warranty does not include deposit protection as standard. Deposit protection means that if you are buying a new build and the builder/developer goes bust, then your deposit is protected. However, for deposit protection to be available through LABC Warranty, the property developer in question must fulfil LABC Warranty’s specific criteria. So, if you want this kind of coverage, check that your developer is eligible.
How long does LABC Warranty last?An LABC Warranty will last 10 or 12 years, depending on your chosen policy. When you apply, you can quickly find out exactly what sort of policy you need.
How do I get my LABC Warranty?Getting an LABC Warranty is a relatively simple 4-step process. You need to submit an application, then a surveyor from LABC Warranty will visit the worksite. Then, once the build is complete, LABC Warranty will come and check that all conditions are satisfied before issuing a certificate of insurance.
Then, you enjoy protection under the warranty, for either 10 or 12 years. The main LABC Warranty site outlines the application process in more detail.
Who can apply for LABC warranty?Professional builders and developers, self-builders, housing associations and homeowners can all apply for an LABC Warranty. If you are a homeowner of an existing property (i.e.: not a new build) but are planning to make a significant extension or renovation to your home, then having an LABC Warranty is an added layer of protection against any issues that may come up during the project.
What happens if the builder won’t honour the LABC warranty?If you have an LABC Warranty and your property’s developer won’t agree to fix any problems themselves, you can go directly to LABC Warranty via their dispute resolution scheme. LABC Warranty follows the Consumer Code for Homebuilders, which covers complaints made within two years after the property is completed. This means that you can expect a speedy, impartial resolution without having to go to court.
Does having LABC warranty affect my mortgage application?Most mortgage lenders won’t offer financing for new build homes unless they have some form of structural warranty. Even for those lenders who don’t insist on it, having this kind of guarantee can only improve your mortgage prospects since it makes you less of a financial risk.
What is a retrospective warranty?A retrospective warranty is a type of structural warranty similar to LABC Warranty but it protects the owner against the risk of a rebuild if there are significant structural issues within the first 10 years after completion. So, if you already own a completed new build home and don’t have an LABC Warranty, you may want to consider a retrospective warranty.
LABC Warranty: Protection and peace of mindLike the other two main providers, LABC Warranty is committed to holding property developers to higher standards of safety and professionalism. Structural warranties are designed to give all developers – from major construction companies to individual self-builders – the advice, guidance and support needed to achieve better quality builds.
Once the project is complete, the warranty then acts as an ongoing guarantee that the right steps have been followed to build a safe, sturdy and comfortable home.
If you’re looking to buy a new build, check out our guide to everything you should know before you buy.
HomeViews provides verified resident reviews of the UK’s housing developments. We’re working with developers, landlords and the Government to recognise high performers and help to improve standards in the built environment.