When you are purchasing a new build it is a requirement under the Council of Mortgage Lenders requirements that a section 38 agreement is entered and there is an adequate bond to protect both the purchaser and the lender. The terms of the agreement are checked carefully and further questions are asked of the developer as to when the works will be completed. In the event of inadequate responses from the developer we would advise any purchaser or lender whether an indemnity policy(a form of insurance) could be considered to cover any breach.
It is important to ensure that when you are purchasing a new build property that there is a section 38 agreement in place, that you understand the remedies available to you should the developer become bankrupt or not keep their end of the agreement. This could effect the valuation of your home on the estate so its an important aspect for future sales or remortgages.
Hundreds of new homeowners are said to be living on unfinished housing developments and residents claim they are powerless when left with incomplete roads, sometimes without streetlights or pavements