Home buyers advised to check Buildmark small print

When buying a new house many buyers take comfort in that if there are defects then the building warranty they receive will protect them from the costs of correcting the defects and making good any damage caused.

However, what buyers think they are covered for and what they are actually covered for can differ. Unfortunately this was the case for husband and wife Simon and Sian Thomas who bought a pair of adjacent new-build properties on a Taylor Wimpey development in Bridgend.

Each property came with the benefit of a NHBC 10-year Buildmark warranty. These are well known in the building industry and some view them as the gold standard for such warranties. When the long retaining walls at the rear of the back gardens failed, the buyer naturally made a claim under their NHBC warranties – only to find out that cover was refused. Unsurprisingly, with remedial costs estimated to be £200,000, the dispute progressed to litigation in the Technology & Construction Court.

Simon Thomas (2) Sian Thomas v (1) Taylor Wimpey Developments Limited (2) National House Building Council (3) Gordon A. Battrick & Co. Solicitors [2019] EWHC 1134 (TCC).  [The overall claim included a claim against the conveyancing solicitor but that did not form part of the preliminary issues.]

The case against Taylor Wimpey was (among other things) that, as the party responsible for the construction of the properties, it owed a duty arising both out of common law and under the Defective Premises Act 1972. Under common law, Mr & Mrs Thomas’ representatives claimed that Taylor Wimpey’s duty of care was to take all reasonable skill and care in the construction of the properties to ensure that, when constructed, they were fit for purpose. Also they claimed under the 1972 Act that Taylor Wimpey had a duty to see its work was done in a workmanlike and professional manner with proper materials so that the dwellings would be fit for habitation when completed.

The claim against the NHBC was that the defects in the retaining walls were within the scope of cover under the Buildmark warranty. First, that it fell within the section covering the cost of remedying damage caused by a defect in, amongst other things “Retaining walls necessary for the structural stability of the house...”  Secondly, they claimed that the defect also fell within the section of the warranty that covers the cost of repairs needed “where there is a present or imminent danger to the physical health and safety of the occupants of the Home because the Home does not comply with the Building Regulations that applied to the work at the time…..”.

In a trial of preliminary issues, on the basis of assuming the facts to be true, the court found that Taylor Wimpey did not owe the buyers a duty of care not to cause them the loss and damage (in the tort of negligence). This was on the grounds that the claim was simply for the cost of full remediation or the amount of diminution in the value of the properties and was not related to the cost of obviating the risk of injury to persons on adjacent land. The losses claimed were pure economic loss and accordingly the court found they were not recoverable. As for the claim under the 1972 Act, the court found that the action was commenced too late and was statute barred.

NHBC in its defence claimed that the garden retaining walls were not necessary for the structural stability of the properties and that the walls were not subject to building regulations. The court found that the question turned on the function of the walls and with the benefit of expert evidence, concluded that the householders had failed to prove the garden retaining walls were necessary for the structural stability of the properties. The court also found that the walls were not subject to building regulations.

The overall result of the trial of preliminary issues was not kind to the claimants and brings to mind the phrase ‘always read the small print’.

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