“CML initiative” regarding new-build houses

As many of you may be aware  this initiative will be introduced in England and Wales with effect from April this year. The effect of it will be that loan funds will not be released in respect of new-build housing unless and until the houses have been ‘finalled’ by NHBC and a cover note issued.

Essentially, this is a pre-handover inspection of new homes by NHBC who will now have a two-tier reporting system to the builder; no reportable items or ‘green’ reportable items (minor deficiencies or snags) will result in a cover note being issued; red reportable items will mean that the property will have failed and no cover note will be issued. This is to combat the very real problem of purchasers moving in to homes that are not effectively complete.

At this stage, there is no stated intention to introduce the initiative in Scotland where it is considered that the Local Authority habitation certificate is sufficient evidence that a house is fit for human habitation. However, the NHBC final inspection for Buildmark purposes is already more robust than the Local Authority inspection - the Local Authority focus is, rightly, on health and safety issues. The NHBC inspection covers not only health and safety issues but also standards of finishes and other matters which might give rise to a claim; and as a national organisation, NHBC have considered it appropriate to introduce their new reporting system across the nation (although in Scotland for the time being no cover notes will be issued). English based lenders (and developers) will have to change their procedures to take account of the initiative.

Given, then, that there would be few problems in extending the initiative across the border, the Conveyancing Committee suggest that the introduction of this initiative into Scotland will not be too far distant. Keep an eye on the CML web-site at www.cml.org.uk