Helping UK new home buyers
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An alternative to going to court is to use the Consumer Code for Home Builders Adjudication Scheme. It is relatively inexpensive (£120) and far quicker (8 weeks) than court proceedings.
Sadly, there are occasions when the only recourse you have is to take your house builder to court. This should only be undertaken as a last resort, when every avenue for resolution has been explored and when you and your house builder have reached "deadlock". The court will be unlikely to grant you judgement if you have not taken all reasonable steps or "pre-action protocols" as they are known to resolve the matter beforehand. This involves exchanging information to try to resolve the dispute without going to court. It is therefore essential you obtain all the information the house builder has about you and your new home (the Plot File) via a Subject Access Request under the Data Protection Act 1998 before taking any legal proceedings.
Once you have the information requested from the house builder, you should write one last letter, to the Regional Managing Director, saying that you will be taking legal action in the County Court if they cannot agree to resolve your dispute. If they refuse you can be considered to have reached deadlock. You then take your claim to your local County Court. If you call in personally, they will give you a pack containing all the relevant forms and leaflets. Be aware the case may be transferred to a court local to the house builder’s office if your claim is defended.
A government guide to using the small claims court can be downloaded here.
There are certain time limits depending on what type of action you are taking. Generally you have up to six years in which to start legal proceedings. The small claims track of the County Court in England and Wales can deal with any claim up to £10,000 (£3,000 in Scotland) and takes on average 30 weeks from the issue of the claim.
If you are claiming more than £10,000 you will have to use the "Fast Track of the High Court" or use a class action as an opportunity to spread the costs with others on your development. You should use a solicitor specialising in taking legal action against house builders, such as Geoff Peters at wingrovelaw.co.uk who is passionate about getting justice for new homebuyers. Again be warned, if you take any action outside the Small Claims Track and lose, you may be liable to the other side’s potentially unlimited, but reasonable, legal costs.
The fees vary depending on the total amount of your claim. The fee for making a claim between £5,000 and the £10,000 maximum is £455 (March 2016) plus a Hearing Fee of £335 for claims above £3,000. Other costs depend on whether you decide to get a solicitor to represent you in court and/or deal with the matter beforehand.
As far as fees are concerned, generally you will need to pay a Court fee to start the claim. Remember to add the cost of the court fees, copying and postage to your claim. Claims of £10,000 or under are dealt with by the Small Claims Track.
Housebuilders might send you a statement of their legal costs, before the hearing in an attempt to intimidate and bully you into dropping the case at the last minute. But such costs are not recoverable in a small claims case whoever wins.
It is worth also noting that:
Neither party can expect to be able to recover its legal costs, even if successful at trial. The use of expert evidence may also be restricted. It is very unlikely an expert will be allowed to give oral evidence at the hearing so only his written report will be available. The cost of an expert report will be limited to £1,500.
Most house builders will offer to settle once they receive the 'Notice of Issue' from the court, especially if the amount claimed is relatively small (less than £5,000). The Notice of Issue will demonstrate you are serious and determined. At the very least, the house builder will make an effort to reach an agreement, no doubt subject to a non-disclosure agreement, rather than attending a public court.
Click on the link for more on taking legal action small claims
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