Consumer Code Monitoring and Feedback

To help monitor how well the Code is being applied, the Consumer Code Management Board is committed to monitoring how the Code is working. This involves some or all of the following:

mystery shopping of site sales offices;
a telephone survey of builders and estate agents, and;
a review of builders' contracts of sale as submitted by homebuyers.

The broad results and actions arising from the surveys are described on this web site and will be disseminated by the participating home warranty organisations to their registered builders and developers. The Management Board is working with the estate agency and legal professions in order that they embrace the Code Requirements and objectives.

March 2011

The first mystery shopping and surveys were carried out in late 2010 and the review of sale contracts in early 2011. It followed initial feedback gathered in March 2010 shortly before the Code was introduced to provide a benchmark for measuring improvements.

What did the feedback show?

Mystery shopping

The latest feedback shows there is widespread awareness, understanding and adoption of the Code by homebuilders;

Attitudes towards the Code have remained very positive and very few of survey respondents said they have had problems with implementing the Code;
Virtually all those who took part in the telephone survey were aware of the Code, as were the vast majority of site sales staff;
Smaller builders and estate agents were less likely to be aware of the Code than larger builders and their sales staff;
Every large builder surveyed had made the Code available on their website, in sales literature or had incorporated it in their customer charter. However, a hard copy was not always immediately available at site sales offices;
Most mystery shoppers were correctly advised that they would need their own legal adviser but some were not.

Sales contract review

The review of sales contracts showed that the Code's requirements had generally been incorporated. As might be expected there was a significant improvement over the audit carried out on pre-Code contracts. There was one area where further improvements could be made. Where there are significant and substantial changes to the design or construction of the home, buyers should be consulted and have the right to cancel. This was not always as clear as it could be in some of the contracts. requirements.

What action should homebuilders take?

Make sure your staff are trained so that they are aware of the Code and its requirements. Your warranty provider may be able to offer in-company training. Free Consumer Code on-line training is also available from this website;
Make copies of the Code available to prospective homebuyers. You can do this through your website, by having copies available in sales offices, by using posters or including the Code in sales materials. A copy of the Code must be given to all homebuyers who ask for one and to all who reserve a home.
If you are using agents to sell your homes, they must also be aware of and follow the Code's requirements. Your warranty provider may be able to give you copies of the Code along with a summary of the warranty cover;
Make sure that homebuyers are always advised to take independent legal advice;
Review your sales contracts to make sure they comply with the Code. Make it clear that a homebuyer will be told about changes in design and construction. Where changes are substantial and significant the homebuyers must be consulted and agree. They must also be able cancel and have their Reservation Fee and deposit back without deductions if they find the changes unacceptable. Further guidance is provided in the Frequently Asked Questions section of the Code's website.

October 2011

What did the feedback show?

A further round of mystery shopping and contract of sale audits was undertaken and completed in October 2011. The general awareness and knowledge has improved since the introduction of the Consumer Code in April 2010. However, homebuilders are encouraged to improve the knowledge of sales staff and estate agents (where used), and to work with their legal advisers to apply the best practice which has been developed.

Mystery shopping

The following key points came out of this survey:

There is a continuing widespread awareness of the Code and its requirements. Attitudes towards the code and its importance remain highly positive.
Homebuilders need to ensure that their sales staff and estate agents are kept regularly trained and updated on their duties and the builders' responsibilities under the Consumer Code. The Consumer Code web site is a useful source of information.
It would be helpful if the Consumer Code is discussed as part of the buying process from even before Reservation takes place.
Homebuilders need to ensure that there is information about the Consumer Code on site – even if this is just knowledge about where to direct someone who would like further information (the Consumer Code web site for example). A copy of the Consumer Code must be given to anyone who asks for it and anyone who signs a Reservation Agreement.
It was apparent that homebuilders need to ensure that homebuyers are made aware of the arrangements to complete the development when building works are finished,
Sales staff and estate agents need to remember that a home buyer is entitled to independent legal advice or to use their own solicitor if they so wish. Homebuilders making recommendations to homebuyers must not limit their choice.

Sales contract review

The sales contracts reviewed were of two kinds; some were 'template' contracts that are used and modified as required for an actual sale; others were actual contracts as legally completed.

The assessments showed up variations in the way some contracts are being drawn up. A practice note is being prepared in conjunction with the Law Society and Independent Lawyers appointed by the Consumer Code Management Board, who are consulting with a group of practicing conveyancers. The outcome will be further best practice requirements and guidance to aid the improvement of Sales Contracts used by homebuilders.

What action should homebuilders take?

Homebuilders must make the Consumer Code available to homebuyers. This could be by providing copies on site, a poster display, or by providing a copy on their website.
Homebuilders should have clear information on where a customer might be able to obtain a copy and information on the Consumer Code (downloaded from a web site for example). A buyer must be given a copy when they enter into a Reservation Agreement.
Home builders are encouraged to undertake awareness training for site sales staff and Estate Agents in all aspects of the Consumer Code.
Use the Consumer Code website as a source of information, such as the Frequently Asked Questions section, to download various free documents and to gain access to the on-line training portals.
The Consumer Code states that buyers should be told they need independent legal advice; if they want to use their own solicitor, this must not be refused.
Home builders need to discuss with home buyers or provide them with information on when outstanding works on site will be completed
Contracts must be written so that they are clear and fair.
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