Buildmark, and a little extra help for NHBC
The Insurance Distribution Directive (the “IDD”) came into force on 1 October 2018. For many people, whether in the housebuilding sector or not, this particular piece of legislation probably hasn’t grabbed their attention. However, given the wide scope of its application it does have the potential to affect developers and other key people involved in the sales process.
One of the aims of the IDD was to focus on ensuring that customers were better informed about insurance products in order to minimise the risk of customers purchasing cover that does not meet their needs. In practice, the most significant change to the regime was to require that insurance providers, or intermediaries, supplied their customers with all of the necessary information prior to the cover being put in place.
These requirements don’t seem like they should have any effect on the housebuilding sector, until it becomes clear that section 1 cover under NHBC’s Buildmark cover is essentially deposit protection insurance. Buildmark cover therefore falls within the scope of the IDD, as NHBC is acting as a regulated insurer. NHBC is now under an obligation to ensure that purchasers receive the details of their warranty and insurance policy prior to conclusion of missives.
The nature of Buildmark cover (and the various parties involved) gives NHBC a difficult task when it comes to compliance with the IDD, and it needs assistance from developers and solicitors to help it comply. There are two ways in which developers and solicitors can contribute to NHBC’s efforts to comply.
(1) For developers, NHBC have two methods to allow the information they need to be sent to them after a reservation has been taken: (a) for developers with a smaller volume of reservations, the NHBC portal can be used to enter information on a plot by plot basis; (b) for developers with a higher volume of reservations, the NHBC portal is unlikely to be an efficient method of providing information. NHBC will therefore allow a bulk upload of details which would allow a developer to extract information they already hold and send it on to NHBC on a regular basis.
(2) Solicitors can also help to ensure that the information is provided before conclusion: (a) for developers’ solicitors, they can try to ensure that the policy numbers and activation codes are requested in time to allow these to be included in the titles packs (or to be sent out with the offer); (b) for purchasers’ solicitors, they should ensure that they register their client’s details on the NHBC conveyancing portal as soon as received, which will allow NHBC to issue documentation prior to conclusion.
At the moment, NHBC is only asking for assistance – there is no suggestion that failing to provide the necessary information will result in any sort of enforcement action. However, if in the future NHBC finds that the current approach is not resulting in compliance with the IDD, it may seek to include the requirement for provision of information within the NHBC rules.
In this issue
- How will Brexit affect my mother-in-law?
- Settling the debate on sequestration
- Taking wellbeing seriously
- How will personal data continue to flow after Brexit?
- Buildmark, and a little extra help for NHBC
- Reading for pleasure
- Opinion: Laurie Anderson
- Book reviews
- Profile: Lord Mackay of Clashfern
- President's column
- People on the move
- Is your legal software ready to remain compliant in 2019?
- What's the deal?
- Ready to leave?
- A tapering opportunity
- Brexit: no dealbreaker either
- The business of divorce
- Trailblazing 12
- Cohabitants: rebalancing the law
- Litigation: an evolving scene
- Chain transactions
- When delay is not fatal
- Data protection – deal or no-deal?
- Two cases and an order
- Reshaping trade mark law
- When the wheels come off
- Parentage or privacy?
- Access right, right of access or right of way?
- Team of one
- Public policy highlights
- OPG update
- Housing specialism added to accreditation list
- At the boundary's edge
- Keep the dual role
- Executry and trust accounting: new guidance
- Moving nightmares
- Accredited paralegal update
- Sign up for conference
- Accredited Paralegal Committee profile
- Ask Ash