Snagging – the very name is enough to put you off. No one likes having to deal with problems or hitches. But for anyone who buys a newly built or converted property, the S-word can be crucial. Do it right and you could save yourself thousands of pounds. Do it wrong and you could end up with a problem property.
Ask Derek Charlton. He and his wife Susie had exchanged contracts on a new four-bedroom house in Peebles, near Edinburgh, and were waiting to move in. ‘The house was part of a small luxury estate and, as we needed a bigger place with a garden for us and our growing family, it was just what we were looking for,’ says Charlton. Just before they completed on the £240,000 home, the couple’s solicitor advised them to ‘snag’ the property.
‘Snagging? I’d never heard of the word and so I asked our solicitor to explain,’ says Charlton, a clothing store manager. Snagging, as he was to find out, means checking over a property for defects and poor finishing. This can be anything from poor paintwork to badly hung doors, broken window-catches and faulty sockets.
This wise move was rapidly followed by another. The couple contacted a professional snagging company and paid just under £350 for an inspector to help with their survey. Snagging day arrived and the little team found 90 defects in the Scottish new-build.
‘As the average for a house or flat is five snags per room, it was unusually high. Most snags are cosmetic, ranging from poor plastering and paintwork to scratched tiles and screws with no plastic caps,’ says Catriona Bright, managing director of the snagging company New Build Inspections (NBI).
Big snags are another prospect altogether, as the Charltons were about to discover. ‘When we went into the kitchen, Susie and I threw up our hands in horror,’ says Derek. ‘It was in two distinct colours. It was meant to have a cedar finish, but the kitchen company ran out of cedar units and completed the job with teak finish.’
There was more to come. The patio doors leading to the back garden would not budge. ‘Luckily our inspector knew about such things and noted that the glass panels were slightly bigger than the door frames and had been bodged in by the builders. It meant they were totally immovable,’ says Derek.
Suddenly the family’s enthusiasm for their dream home started to pall. ‘Because we had paid a 10 per cent unreturnable deposit, there was no going back and we simply had to continue with the transaction,’ says Charlton, who proceeded to wise move number three.
He and his wife sent a report of their findings to the Edinburgh-based developer – backed by an even more detailed report from the snagging company. Then came wise move number four. The couple talked to their solicitor, who advised them to insert a ‘retention clause’ in their completion contract. This is a sum – in this case £10,000 – that is held back until all the snags in a property are put right. ‘It puts a real stranglehold on the developer,’ says Bright.
Not surprisingly, the Charltons’ kitchen and patio doors were replaced in a week. Property investor Jonathan Cartwright was not so lucky. After buying two bijou apartments in a Liverpool new-build, he decided to inspect them before letting them out. ‘When I checked over the apartments, I found poorly fitted tiles in both bathrooms, several kitchen units that needed replacing and a glass door with a hole in it – plus 80 or so other defects,’ says Cartwright.
The young investor then approached his developers and asked them to sort out the defects. Six weeks later he is still waiting. Unlike the Charltons, Cartwright snagged his property after completion, not before. ‘It was only when I heard about it from a friend that I knew anything about it,’ he says. ‘Now I’m on the phone every day trying to get the developers to do the work.’
NBI’s Bright says: ‘All properties should have ‘try before you buy’ and 14-day cooling-off periods. We advise the homebuyers who come to us to make regular checks during the building phase of their new-build or conversion property and to snag it five days before completion so they have time to manoeuvre and negotiate with the developers.’
David Erica of Surrey-based chartered surveyors Roy Ilott and Associates says: ‘UK developers are mainly profit-driven. If they make a sizable margin on a new-build development or conversion, they’ll usually be happy to send in a team of six or eight within a couple of weeks to put right any snagging problems. If their profits are tight, they’re far less likely to do so.’
The other snag, it seems, is ignorance. ‘Most home-buyers haven’t heard of snagging,’ says Bright. ‘Developers are invariably reluctant to mention it, and the only way most people find out is through a friend or neighbour or their conveyancing solicitor. It’s time it was on the checklist of every independent financial adviser and mortgage broker.’
Haynes Building & Development Limited are a father and son business comprised of Terrence Haynes and JJ Haynes. To date the company has built a development consisting of 8 properties in Outings Lane, Doddinghurst and is currently in the process of completing a development of 30 properties (The Ridings) on a piece of land previously occupied by Norton Heath Equestrian Centre, Fingrith Hall Lane, Ingatestone.
The following bullet points have been posted to make people aware of what they may experience if purchasing one the properties on The Ridings development from this unprofessional company with no idea on how to treat clients: –
• Unable to meet their promised completion dates for properties (properties that were due for occupation in November 2019 still nowhere near complete in June 2020). Developer does not seem to care that this could result in the loss of your buyer and increased solicitor costs (repeat local authority searches), as well as having to reapply for mortgages.
• Advise that you can make changes to the property or add extras for additional cost but then take months to provide costings for these items and then apportion blame to the client for delaying the build.
• Threaten to put property back on the market if you do not comply with their demands.
• Market the properties with no EPC rating available (legal requirement) with this still not being available at the time of exchange.
• Initially agree that you do not need to exchange on the property until it is complete and then once you have started the legal process for the purchase they then move the goal posts and refuse to start on any work on the interior of the property until you have exchanged contracts.
• Unable to provide a full specification for the property being purchased and want all communications/decisions to be verbal rather than putting them in writing and do not respond to emails. This becomes a real problem when your solicitor is trying to prepare for exchange and results in extra fees due to the number of communications that have to be made.
• Have selected a New House Warranty (BLP Insurance) that does not cover the rectification of snagging items/defects in the property but mis inform their clients that the warranty does cover these items. This means that if items are disputed by the developer or the developer goes bankrupt you have no insurance cover to rectify snagging items/defects and will have to pay yourself to get these rectified. Also, BLP Insurance has Code for the Sale of New Homes that applies to all new build homes where a BLP insurance policy has been issued. This Code establishes mandatory requirements that apply to all House Builders and must be complied with. However, this developer seems totally unaware of its existence and consequently is not following it.
• Have client specific time frames for the rectification of snags with these varying from 6 months to a year with the norm for new builds being 2 years. These time periods also seem to vary during the buying process and if you try to protect yourself by documenting the time frames that you have been told into the contract or having a snagging retention (a legally binding agreement where new build homebuyers retain a set percentage of the cost of their house until faults are fixed) added into the contract they will reject it.
• Appear to have made changes to the site’s approved planning application without gaining the planning authorities approval. As part of the approved planning application, a landscaping plan was submitted which appears not to be being followed.
• Provide incorrect information about properties e.g. that you are eligible to receive a Renewable Heat Incentive (RHI – receive payments based on energy usage for 7 years) due to the property being fitted with an air source heat pump. This is not the case as this incentive is only available for retrofits to existing properties and custom builds
• To date have completed on properties with wrong client preferences fitted, items which form part of the specification missing and poor workmanship.