Summary
Relevant sections of the New Homes Quality Code
Part 1: Selling a new home
Part 3: After-sales, complaints and the NHOS
Investigation outcome
Partially upheld. The customer was awarded £100 in compensation, and the Ombudsman directed the developer to review and update its complaints procedures.
Recommendations for developers
- Ensure sales teams are fully trained on the limitations of verbal assurances, particularly in relation to third‑party land.
- Regularly review complaint handling processes to ensure consistency, clarity and compliance.
Issue
The customer complained that they had been mis-sold their new home based on assurances about the future development potential of neighbouring land. They also raised concerns about shortcomings in the developer’s handling of their complaint.
Circumstances
- The customer said sales staff repeatedly assured them that the field opposite their home was unsuitable for development and that views of open countryside would remain. These assurances were described as central to their decision to buy the property.
- After completion, the customer became aware of a speculative proposal by a third‑party developer to build homes on the adjacent farmland, potentially using the estate road for access. The customer raised concerns about the possible impact on property values, traffic, safety, waste management and service charges. They said they would not have proceeded with the purchase had they known about the potential for future development.
- The developer denied providing any assurances about land not under their ownership or control. They stated that all legal documentation disclosed the rights of access and that purchasers were responsible for conducting due diligence through their solicitors. The developer also maintained that any future development was speculative and subject to planning approval.
Ombudsman’s decision
The Ombudsman reviewed the evidence and did not find grounds to support the claim of mis‑selling. The Ombudsman concluded that there were no guarantees within the marketing materials, the Reservation Agreement or the contract of sale regarding future development of neighbouring land. The contract expressly stated that buyers could not rely on verbal assurances, and the Ombudsman was satisfied that relevant title documentation had been made available to the customer’s solicitor. On this basis, the mis‑selling aspect of the complaint was not upheld.
However, the Ombudsman found shortcomings in the developer’s complaint handling. While responses were provided within required timescales, they lacked formality and were not issued as a clear written complaint response, in line with the Code.
Learnings
- Verbal assurances about matters outside a developer’s control should not be given during the sales process.
- Complaint responses should be formal and clear.
