Van McKellar | Partner

Halvorson v Persimmon Homes: Pursuing a Builder when things go wrong

A recent decision from Edinburgh Sheriff Court [Halvorson v Persimmon Homes 2018 SC EDIN 40] helps serve as a useful reminder to prospective purchasers looking to buy a new house from House Builders as to their rights if things go wrong. In this case, Ms Halvorson alleges her garden ground is flooded and unusable and seeks to recover damages from the house builders, Persimmon. Her lawyers sought to adopt quite involved legal arguments to overcome the difficulties often encountered when seeking to hold a House Builder liable. In particular, and as is often the case with House Builders, Ms Halvorson’s missives (i.e. contract) with Persimmon provided few relevant enforceable commitments. Her lawyers sought as a consequence to argue that a term should be implied into these missives to the effect that the garden ground would be fit for purpose. The court however has refused to accept that argument for a variety of reasons, including and in effect upholding an argument from Persimmon that as the NHBC standards were part of the missives, and provide that waterlogging 3 metres away from the house is considered acceptable, no such term could be implied. Indeed the court has held that Ms Halvorson’s contractual claim largely has failed, again reflecting how limited House Builders’ missives can be. What Ms Halvorson however has managed to do is to point to is subsequent work done by Persimmon, post purchase, and in alleging that this work has caused damage to her garden, and her lawyers have persuaded the court that Persimmon, separately to any contractual commitments, owed her, and breached, a duty of care. The court has allowed that duty of care argument to go to trial, but it seems the duty of care only arises because of the special circumstances of subsequent work being done, and not arise in most house builder situations. The fact that a duty of care had to be argued, independently of contractual rights, further reinforces how limited the rights a new home owner can have against a house builder.

One common misconception for purchasers is that this matters not, as the purchaser has NHBC protection (or similar, such as professional certificates). The NHBC protection can often itself be relatively limited. The Sheriff records that the parties were agreed that “the property benefits from the National House Building Council’s (“NHBC”) “Buildmark” warranty scheme….The NHBC is a body which house builders or developers may join (and most do). The NHBC produces standards for the construction of new houses, which are laid down in considerable technical detail….The Buildmark scheme which covers the property requires the builder to rectify any defects (that is, anything, falling short of the NHBC standards) materialising in the first two years after completion. NHBC provides a resolution service and a guarantee in respect of any remedial works which the builder fails to carry out. The scheme also includes a 10 year structural guarantee period in terms of which the NHBC undertakes to pay to the purchaser the cost of remedying any major structural defects which materialise within 10 years of completion.” That quite helpfully summarises the limits of the NHBC scheme and that it should not be seen to be a complete insurance policy covering all problems the purchaser may find in the first 10 years following purchase. It can often be very important that action is taken against the house builder within the period stipulated in the missives – usually two years – to enforce whatever missive rights exist against that builder, to be able to place full reliance in turn on the NHBC protection.

We have very recent experience of pursuing claims against House Builders (including successfully arguing that implied terms in missives) and the NHBC. We understand the considerable complexities that can be encountered and can help advise you negotiate the maze to pursue the appropriate claim. Contact us online or call 0333 222 1855 to speak to a member of our team.

Van McKellar

Van McKellar

Dispute Resolution Team

“I see my role as a problem solver – seeking to understand the factual basis of my clients’ disputes and applying a legal and commercial analysis in seeking to resolve them, whether by negotiation or by means of litigation or some other alternative means of dispute resolution.”

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