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Aston Lawyer
Aston Lawyer, Solicitor
Category: Law
Satisfied Customers: 10494
Experience:  Solicitor LLB (Hons) 23 years of experience in Conveyancing and Property Law
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We are purchasing a new build property and we have been

Customer Question

Hi,
We are purchasing a new build property and we have been asked to put down a deposit for the plot after which in 28 days we are required to exchange contracts and pay 10%. We have been asked to complete this at the end of July and the house will be completed in January.
My question is regarding what happens to that 10% of the property value that will be paid on exchange of contracts if the builder goes into liquidation. The builder is NHBC approved. Are you able to provide advice on this?
Many thanks, Heather
Submitted: 2 years ago.
Category: Law
Expert:  Aston Lawyer replied 2 years ago.

Hello and thanks for using Just Answer.

My name is ***** ***** am happy to assist you with your enquiry.

If your builder becomes insolvent then NHBC will repay the amount you have already paid to them under contract and which you cannot recover, up to a limit of 10% of the original purchase price or £100,000, whichever is less. Or if the property has been started, NHBC may instead pay the additional cost up to this limit to complete the home in accordance with NHBC requirements.

So, provided your Solicitor has confirmed to you that the property has the benefit of the NHBC cover, you have nothing to worry about.

I hope this assists and puts your mind at rest.

Kind Regards

Al