BLP: New homes warranties are not working
According to data fromWilkins Kennedy
, the accountancy firm, 948 construction companies went bust in the first quarter of 2011.
The hardship of this is obviously being felt by the people involved in the companies but the effects spread out far wider asBrian Kilroy, BLP’s business development manager
, explains: "It is not unusual for a developer to change contractor during a job or for a scheme to pass from one developer to another. However, even when the warranty provider has been involved from the commencement and has carried out all necessary inspections on site, making the necessary amendments often proves to be difficult! In the majority of cases, the developer's only option is to take out a completely new policy. This can be expensive and can even carry penalties for late registration because the works have already started!"
He continues: "I am taking dozens of calls every month from developers caught in this situation. The problems arise when the warranty provider fails to see that the changes are outside of any inherent risk within the design or build and/or will not be pragmatic in addressing the needs of the client."
In contrast, with a latent defects insurance policy, it is the building that is insured (rather than the supplier) so if any aspect of the development changes, it makes no difference whatsoever. The process is far simpler and means that even developments that have started (or even completed) can benefit from this cover.
Brian concludes: "New Homes Warranties and the way they work rely on the developer or contractor putting right problems in the first 2 years and this responsibility is formalised through legal contracts and guarantees. Warranty providers do not appear to be making amendments easy, leaving developers and contractors struggling for options."
For further information please call 020 7204 2444 or visitwww.blpinsurance.com
Source Thomas Miller Group
You may also be interested in:
Persimmon situation may accelerate burst of Help to Buy bubble - BLP Insurance comments on latest PMI
Following the release of today’s Construction PMI figures, Phil Harris, Director at BLP Insurance, comments on the sector: “After skirting precariously close to the abyss, the construction sector has fallen into contraction (49.5) for the first time since March 2018. The main symptoms are a fear of a potential Brexit cliff face, lethargic commercial activity and major concerns about the long-term viability of Help to Buy.
The US arm of Thomas Miller, the international provider of market leading insurance, professional and investment services, has today announced the launch of the Fairlead Group, a web-based platform enabling the maritime industry to find and select private investigators.