How a New Build Contract Differs from a Resale Contract
Before diving into specific clauses, it's important to understand the fundamental differences in structure and approach.
| Feature | Resale Contract | New Build Contract |
|---|---|---|
| Basis | Law Society Standard Conditions of Sale (5th edition) | Developer's bespoke terms, often with standard conditions incorporated but heavily modified |
| Length | 15-30 pages including conditions | 50-150+ pages before attachments |
| Balance | Broadly balanced between buyer and seller | Favours the developer on most key terms |
| Negotiability | Most terms open to negotiation | Limited negotiability — developer uses the same contract for hundreds of plots |
| Attachments | Title documents, property forms, existing lease | Specification, site plan, management company articles, Section 106, adoption agreements, warranty docs, draft lease, restrictive covenants schedule |
| Completion mechanism | Fixed date agreed by both parties | Developer gives notice when ready; buyer must comply within short timeframe |
| Drafting party | Seller's solicitor, using standard templates | Developer's in-house legal team or specialist developer firm |
For a full comparison of new build vs resale conveyancing at every stage, see our guide to how new build conveyancing differs from resale.
The Contract Pack: What You Should Receive
Your solicitor should receive a comprehensive contract pack from the developer's solicitors. Here's what it should contain and what each document is for:
| Document | What It Contains | What Your Solicitor Checks |
|---|---|---|
| Contract of sale | The main agreement: parties, property description, price, completion mechanism, special conditions | Every clause — this is where the key risks and obligations sit |
| Specification | Materials, finishes, fixtures, fittings, appliances included in the purchase | Cross-referenced against marketing materials, show-home, and any promises made by the sales team |
| Site plan / estate layout | Position of your plot, roads, communal areas, parking, green spaces, future development phases | Plot boundaries, proximity to communal bins/substations/pumping stations, future phases that could affect your property |
| Title information | Developer's title to the land, any encumbrances, rights, and restrictions | Developer actually owns the land; no third-party interests that could affect your plot |
| Draft transfer deed (TR1) | The document that will transfer ownership to you | All necessary rights of way and easements are included; all reservations by the developer are reasonable |
| Draft lease (leasehold only) | Full terms of your leasehold interest: term, ground rent, service charges, permitted use, alterations | Lease length (125+ years), ground rent (peppercorn post-June 2022), service charge reasonableness, restrictions on alterations |
| Management company documents | Memorandum and articles of association; initial management agreement; estimated budgets | Who controls the management company; how charges are set and reviewed; your voting rights; ability to change managing agent |
| Planning documents | Planning permission, conditions, Section 106 / Section 75 agreement | All conditions discharged or programmed for discharge; no S106 restrictions that affect your plot specifically |
| Adoption agreements | Section 38 (roads) and Section 104 (sewers) agreements — or confirmation of status | Whether roads and sewers will be adopted; if not, who maintains them and at what cost to you |
| NHBC / warranty documentation | Type of warranty, cover periods, exclusions, claims process | Warranty provider is acceptable to your lender; cover is in place from completion; you understand what's excluded |
| Energy Performance Certificate | EPC rating (may be predicted for off-plan) | Rating matches expectations; actual EPC will be provided before completion |
| Restrictive covenants schedule | Things you cannot do with the property or land | Covenants are reasonable and won't affect your intended use or future resale |
If any documents are missing or arrive late, that's a problem. Your solicitor cannot properly advise you without the complete pack, and the 28-day exchange deadline doesn't pause while you wait for missing documents.
Every Major Contract Clause Explained
Here is a clause-by-clause breakdown of the key terms in a typical new build contract.
1. The Parties and Property Description
This identifies the developer (seller) and you (buyer), and describes the property being sold. For new builds, the description often references a plot number on a site plan rather than a postal address (which may not exist yet).
What to check: The plot number matches what you reserved. The site plan shows the correct plot in the correct location. The description includes any garden, parking space, or storage that was part of the deal.
2. The Purchase Price and Deposit
States the agreed price and the deposit amount (usually 10% of the purchase price, payable on exchange).
| Element | What's Normal | Watch Out For |
|---|---|---|
| Price | Fixed at the amount you agreed | Check for any price adjustment clauses (rare but possible for off-plan) |
| Deposit amount | 10% of the purchase price | Some contracts allow 5% on exchange with the balance on completion; developer contributions may reduce cash needed but the contractual deposit remains 10% |
| Deposit holder | Held by the developer's solicitor | Should be held as 'stakeholder' (protected), not as 'agent' (developer can use it) |
| Deposit refundability | Refundable if you rescind under the longstop date or developer breaches | Some contracts make the deposit non-refundable in certain circumstances — your solicitor should challenge this |
Stakeholder vs Agent: This is critical. If the deposit is held as 'stakeholder,' neither party can touch it until completion (or the contract is rescinded). If held as 'agent,' the developer can use your deposit money immediately — and if the developer goes into administration before completion, you may lose it. Always insist on stakeholder.
3. The Specification
The specification document describes exactly what you're buying: construction method, materials, fixtures, fittings, finishes, and appliances. It replaces the fixtures and fittings form (TA10) used in resale transactions.
What to check:
- Does the specification match what you saw in the show-home? Show-homes often include upgrades that aren't standard
- Are the exact brands and models specified, or just generic descriptions ('white goods' vs 'Bosch Serie 4 oven')?
- Does the specification include the garden (landscaping, turf, fencing) or is that extra?
- Are parking spaces numbered and allocated, or first-come-first-served?
- What flooring is included? Many new builds come with bare concrete or chipboard to the first floor
4. The Variation Clause
This clause gives the developer the right to make changes to the property, the specification, or the estate layout without your consent. It is one of the most contentious clauses in new build contracts.
| Variation Type | What the Developer Typically Claims | What Your Solicitor Should Push For |
|---|---|---|
| Materials substitution | Right to substitute 'equivalent' materials | Definition of 'equivalent' — must be same quality and specification, not just same price to the developer |
| Layout changes | Right to alter internal layout if necessary | Any layout change that reduces floor area or changes room configuration requires your written consent |
| Estate plan changes | Right to alter roads, communal areas, landscaping, and add/remove plots | Changes that materially affect your plot (views, privacy, access, parking) require consent or give you right to rescind |
| External appearance | Right to change external materials (bricks, render, roof tiles) | External changes that differ materially from marketing images should require consent |
| Services | Right to change the route or specification of services (drainage, electricity, gas) | Services must still meet building regulations and not adversely affect your plot |
Red flag: A variation clause with no limits and no definition of 'minor' gives the developer carte blanche to deliver something different from what you bought. Push for a 'material change' threshold that triggers either your consent or a right to rescind with a full deposit refund.
5. The Completion Mechanism
This is where new build contracts diverge most dramatically from resale. Instead of agreeing a fixed completion date, the contract establishes a mechanism by which the developer triggers completion.
| Mechanism | How It Works | What to Negotiate |
|---|---|---|
| Notice to complete | Developer serves written notice when the property is ready; you must complete within the notice period | Minimum 14 days' notice (21 preferred); notice must be served by recorded delivery, not just email |
| Estimated completion date | An indicative date in the contract — not binding, just a guide | Get the most realistic date possible; ask what stage the build is at and what could delay it |
| Conditions precedent | Completion conditional on building control sign-off, NHBC cover note, and sometimes planning conditions being discharged | All conditions should be genuinely achievable; if any are outside the developer's control, understand the risk |
| Penalty for late buyer completion | Daily interest charged to you (typically contract rate + 4% over base rate) if you don't complete within the notice period | Ensure the interest rate is reasonable; push for a reciprocal clause penalising the developer for late build |
The asymmetry problem: In most new build contracts, if you're late completing, you pay daily penalty interest. If the developer is late building, you wait — with no compensation and no right to claim damages for wasted mortgage offer fees, additional rent, or storage costs. Your solicitor should negotiate to reduce this asymmetry where possible.
6. The Longstop Date
The longstop date is a contractual backstop — a deadline by which the developer must complete the build and trigger the completion process. If the developer hasn't completed by this date, you (usually) have the right to rescind the contract and get your deposit back.
| Element | What's Normal | Red Flag |
|---|---|---|
| Existence | Every contract should have a longstop date | No longstop date — you're locked in indefinitely with no exit |
| Length | 12-24 months from exchange | Over 24 months (unless the build is genuinely very early stage) |
| Trigger | You serve notice after the longstop date passes; deposit is refunded | Developer can extend the longstop date unilaterally — removes the protection entirely |
| Deposit return | Full deposit refunded if you rescind under the longstop provision | Deposit is non-refundable even on longstop rescission — this is unacceptable |
| Compensation | Deposit refund only — no compensation for wasted costs | This is standard but unsatisfying; some solicitors negotiate a modest compensation clause (typically unsuccessful) |
Critical point: Without a longstop date, you have exchanged contracts and paid a deposit on a property that the developer has no contractual deadline to finish. Your mortgage offer will expire, your life circumstances will change, and you'll have no legal way out. Never exchange without a longstop date.
7. Restrictive Covenants
Restrictive covenants are obligations imposed on you that restrict how you can use the property. On new build estates, these are typically imposed by the developer to maintain the estate's appearance and protect property values — but some go further than necessary.
| Common Covenant | Purpose | Reasonable? |
|---|---|---|
| No commercial use | Prevents running a business from the property that would cause disturbance | Generally reasonable, but check it doesn't prevent working from home |
| No external alterations without consent | Prevents unsightly additions that lower estate values | Reasonable if consent is not unreasonably withheld; check who gives consent |
| No caravans, boats, or commercial vehicles on the drive | Estate appearance | Common; may be inconvenient if you have a work van |
| Fencing and boundary restrictions | Uniformity of appearance | Check what you're actually allowed to put up; some covenants are very restrictive |
| No satellite dishes on front elevation | Estate appearance | Generally reasonable; may conflict with your right to install a dish under telecoms regulations |
| No subletting without consent | Keeps the estate owner-occupied | Could prevent you letting the property if circumstances change; may affect buy-to-let mortgage eligibility |
| Landscaping maintenance obligation | You must maintain your garden to a certain standard | Subjective and hard to enforce, but could be used against you in a dispute |
| No further development | Prevents you extending or building additional structures | Could prevent a loft conversion, extension, or garden room — check carefully |
Who enforces covenants? Usually the developer or the management company. Some covenants also give neighbouring plot owners the right to enforce. This matters because the developer eventually leaves the estate, but the covenants stay.
Can you remove covenants later? It's possible through a Lands Tribunal (Upper Tribunal, Lands Chamber) application under Section 84 of the Law of Property Act 1925, but it's expensive (£1,000-£5,000+), time-consuming, and not guaranteed to succeed.
8. The Developer's Obligations
The contract should clearly state what the developer is obligated to deliver and to what standard.
| Obligation | What It Should Say | What to Check |
|---|---|---|
| Build standard | Built in accordance with planning permission, building regulations, and NHBC standards | All three are mentioned — not just 'in a good and workmanlike manner' (too vague) |
| Specification compliance | Property will be built in accordance with the specification | Subject to the variation clause — see above for how to limit the developer's variation rights |
| Completion standard | Property will be 'practically complete' before triggering completion | Definition of 'practically complete' — does it mean everything done, or just habitable with minor items outstanding? |
| Defects liability | Developer will rectify defects reported within 2 years of completion | Ensure the defects period is explicitly stated; check what's excluded (cosmetic wear and tear usually excluded) |
| NHBC warranty | Property will be registered with NHBC or equivalent warranty provider | Registration confirmed before completion; cover note provided; you understand the claims process |
| Communal areas | Communal roads, landscaping, and facilities will be completed to an agreed standard | Timescale for communal areas completion; who is responsible if the developer leaves the estate before finishing them |
9. The Buyer's Obligations
Your obligations under the contract are also significant:
- Pay the deposit on exchange: Usually 10%, cleared funds, on the day of exchange
- Complete within the notice period: Once the developer serves notice, you must complete or face penalty interest
- Obtain mortgage funding: The contract is not conditional on mortgage approval — if your mortgage falls through, you're still contractually bound
- Pay stamp duty: Within 14 days of completion
- Comply with restrictive covenants: From the date of completion onwards
- Join the management company: If applicable, you're automatically a member from completion
- Not visit the site without permission: Most contracts prohibit you from visiting the construction site during the build without the developer's consent
10. Incentives and Extras
Developer incentives — flooring packages, stamp duty contributions, deposit contributions, upgraded kitchens, part-exchange deals — must be properly documented in the contract.
| Incentive Type | How It Should Be Documented | Why It Matters |
|---|---|---|
| Financial contribution (stamp duty, deposit, legal fees) | Written into a special condition of the contract with the exact amount specified | Must be disclosed to your mortgage lender; affects the effective purchase price and valuation |
| Physical extras (flooring, appliances, curtains) | Added to the specification document with exact descriptions | Without written confirmation, the developer can claim it was never agreed |
| Part-exchange | Separate part-exchange agreement cross-referenced in the main contract | Check the part-exchange valuation is fair; understand the implications if either sale falls through |
| Rental guarantee | Separate rental guarantee agreement with terms, duration, and rent level specified | Usually aimed at investors; check who provides the guarantee (developer or third party) and what happens when it ends |
The golden rule: If it's not in writing in the contract or specification, it doesn't exist. Verbal promises from the sales office are worthless once contracts are exchanged. Get everything in writing before you sign.
11. Stamp Duty and Apportionment
For new build purchases, stamp duty (SDLT in England and Northern Ireland, LBTT in Scotland, LTT in Wales) is calculated on the full purchase price. However, if incentives reduce the effective price, the position becomes more complex.
Your solicitor must correctly apportion any incentives for the SDLT return. Getting this wrong can result in HMRC penalties. For current rates and how incentives affect the calculation, see our deposit guide which includes a full stamp duty reference table.
12. The Transfer Deed (TR1)
The TR1 is the document that legally transfers ownership of the property from the developer to you. For new builds, it's more complex than a standard resale transfer because it:
- Creates new rights of way, drainage easements, and service easements for the first time
- Reserves rights for the developer over your land (access to maintain services, rights to complete future phases)
- Imposes the restrictive covenants that will bind you and future owners
- Defines the boundaries of your plot from the developer's master title
Your solicitor should review the TR1 with extreme care. Errors in the transfer deed are expensive and time-consuming to correct through the Land Registry, and may require the developer's cooperation — which becomes difficult once they've moved on to new projects.
Red Flags: When to Be Seriously Concerned
These are contract provisions that should raise alarm and may justify walking away from the purchase entirely.
| Red Flag | Risk Level | What It Means | Action |
|---|---|---|---|
| No longstop date | Critical | You're locked in indefinitely with no exit if the developer doesn't build | Refuse to exchange without a longstop date being added |
| Deposit held as 'agent' not 'stakeholder' | Critical | Developer can spend your deposit immediately; you're an unsecured creditor if they go bust | Insist on stakeholder; if developer refuses, walk away |
| Doubling ground rent (pre-June 2022 lease) | Critical | Property will become unmortgageable within 10-20 years | Refuse the clause; if the lease is post-June 2022, ground rent should be peppercorn by law |
| No defects liability period | High | Developer has no obligation to fix defects after you complete | Insist on minimum 2-year defects liability period |
| Unlimited variation clause | High | Developer can deliver something materially different from what you agreed to buy | Negotiate limits; insist on consent for material changes |
| Completion notice under 10 days | High | May not have enough time to arrange mortgage drawdown | Negotiate minimum 14-day notice; 21 days is better |
| Developer can extend longstop unilaterally | High | Longstop date is meaningless if the developer can keep pushing it back | Reject; longstop should be fixed or extendable only by mutual agreement |
| Overage clause with unreasonable terms | Medium | Developer shares in any future uplift if you develop the land further | Assess whether this could realistically affect you; negotiate removal or reasonable time limit |
| No reciprocal penalties for developer delay | Medium | You pay interest for being late; developer pays nothing for delaying the build by years | Push for reciprocal provisions; likely to be rejected but worth raising |
| Mandatory arbitration (not litigation) | Medium | You can't go to court if there's a dispute; must use arbitration which can be expensive | Check whether the Consumer Code provides an alternative complaints route first |
What You Can Realistically Negotiate
Developers use the same contract for every plot on the estate, and they're reluctant to make changes because it creates inconsistency and requires legal review. But that doesn't mean negotiation is impossible. Here's what's realistic:
| Clause | Likelihood of Success | Negotiation Strategy |
|---|---|---|
| Deposit held as stakeholder | High | Standard consumer protection expectation; most developers will agree if pushed |
| Minimum completion notice period (14-21 days) | High | Reasonable request backed by practical need to arrange mortgage drawdown |
| Incentives written into contract | High | Developer wants the sale; documenting agreed incentives is a reasonable ask |
| Longstop date added (if missing) | High | Consumer Code for Home Builders expects a longstop date; solicitors routinely insist on this |
| Defects liability period confirmed | High | Most major developers include 2 years as standard; if missing, insist on it |
| Variation clause limitations | Medium | Developer may agree to a 'material change' threshold; unlikely to remove the clause entirely |
| Restrictive covenant modifications | Low-Medium | Developer may soften individual covenants if they're clearly unreasonable |
| Reciprocal delay penalties | Low | Worth raising on principle; developer almost always refuses |
| Price reduction | Low | Developers prefer to offer incentives rather than reduce the headline price (affects comparable valuations) |
| Longstop date shortened | Low | Developer sets the longstop based on build programme; unlikely to accept a shorter period |
How to Negotiate Effectively
- Through your solicitor: All contract negotiations should go through your solicitor to the developer's solicitor. Don't negotiate directly with the sales office on legal terms
- In writing: Every amendment must be documented in a formal enquiry letter or contract amendment schedule
- Early in the process: Raise issues as soon as the contract pack is reviewed, not the day before exchange
- Pick your battles: Requesting 20 amendments will get you nowhere. Focus on the issues that genuinely matter: stakeholder deposit, longstop date, completion notice period, defects liability
- Reference the Consumer Code: The Consumer Code for Home Builders (2024 edition) sets expectations for fair dealing. Referencing it gives your negotiation points legitimacy
The Consumer Code for Home Builders
The Consumer Code is a mandatory code of conduct for developers registered with NHBC, Premier Guarantee, LABC Warranty, and other warranty providers. While it's not legislation, it sets enforceable standards that your solicitor can reference.
| Code Requirement | What It Means for You |
|---|---|
| Pre-purchase information | Developer must provide clear, accurate information about the property, price, tenure, and any charges before you reserve |
| Reservation agreement | Must set out terms clearly; reservation fee should be reimbursed if the developer withdraws the property or fails to provide the contract pack in time |
| Contract terms | Must be fair, clear, and comply with consumer protection legislation |
| Right to independent legal advice | Developer must not pressure you to use their recommended solicitor |
| Build quality | Property must be built to NHBC or equivalent standards |
| After-sales service | Developer must provide an accessible after-sales service and a formal complaints process |
| Dispute resolution | Independent dispute resolution scheme available if you can't resolve issues directly with the developer |
If the developer breaches the Consumer Code, you can raise a complaint through the code's independent dispute resolution scheme. This is separate from — and often quicker than — court proceedings.
Leasehold-Specific Contract Terms
If you're buying a leasehold new build (most flats, some houses), the contract will include or reference a draft lease that contains additional terms. These lease terms are separate from the contract of sale but equally important.
Key Lease Terms to Check
| Lease Term | What to Look For | Red Flag |
|---|---|---|
| Lease length | 125 years minimum; 999 years increasingly common | Anything under 125 years — shorter leases lose value faster and become expensive to extend |
| Ground rent | Peppercorn (zero) for leases granted on or after 30 June 2022 | Any ground rent above peppercorn on a post-June 2022 lease is illegal. For earlier leases: doubling clauses, RPI-linked escalation, or anything above £250/year |
| Service charge | Reasonable estimate with clear breakdown of what's covered | No estimate provided; vague 'to be determined' wording; no cap on annual increases |
| Reserve / sinking fund | Contribution to a fund for major future works (roof, lift, communal heating) | No reserve fund provision — means large one-off bills when major works are needed |
| Management | Right to appoint and change managing agent | Developer retains permanent management control with no tenant ability to change |
| Alterations | Reasonable consent process for internal alterations | Blanket prohibition on all alterations, or consent required for even minor works |
| Subletting | Permitted with notice (or permitted at all) | Complete prohibition on subletting — removes flexibility if you need to relocate |
| Insurance | Building insurance arranged by the freeholder; you contribute proportionally | No transparency on insurance costs; freeholder earns commission on the policy (common but should be disclosed) |
| Forfeiture | Lease can be forfeited (ended) if you breach its terms seriously | Low thresholds for forfeiture — ensure you understand what could trigger it |
Ground Rent: The Legal Position
The Leasehold Reform (Ground Rent) Act 2022 fundamentally changed ground rent for new leases:
| Lease Granted | Ground Rent Position |
|---|---|
| Before 30 June 2022 | Whatever the lease says — could be fixed, RPI-linked, or doubling. Original terms apply |
| On or after 30 June 2022 | Must be peppercorn (zero). Any clause requiring payment above zero is void |
If you're buying on a development where earlier phases had leases granted before June 2022, those earlier-phase flats may have different (potentially problematic) ground rent terms. This doesn't affect your lease directly, but it's worth understanding the context of the development.
For more on service charges, management, and the Leasehold and Freehold Reform Act 2024, see our service charges guide.
Off-Plan Contracts: Additional Risks
If you're buying off-plan (before the property is built), the contract carries additional risks compared to buying a completed or nearly completed property.
| Risk | What Could Happen | Protection |
|---|---|---|
| Build delays | Property not ready for months or years beyond the estimated date | Longstop date gives you an exit; keep mortgage offer alive with extensions |
| Specification changes | Developer substitutes materials, changes layout, or downgrades finishes | Variation clause limitations; written specification in the contract |
| Developer insolvency | Developer goes into administration before completing the build | Deposit held as stakeholder; NHBC pre-completion cover (for registered plots); don't over-pay before completion |
| Market falls | Property value drops below purchase price before completion | No direct protection — you're contractually committed to complete at the agreed price |
| Market rises | Developer may try to find reasons to avoid completing (very rare but not unheard of) | Exchanged contract is legally binding; your solicitor can enforce completion |
| Mortgage offer expiry | Offer expires before the property is ready | Apply for extension early; have a backup plan for re-application |
| Planning changes | Developer gets permission for additional buildings or changes to the estate that affect your property | Check the outline planning permission for future phases; understand what the developer could still build |
NHBC Pre-Completion Cover
If the developer goes into administration after you've exchanged but before completion, the NHBC Buildmark warranty provides pre-completion cover. This can refund your deposit (up to £100,000 for a house, £100,000 for a flat) if the developer can't complete. However, this only applies if your plot was registered with NHBC before exchange. Check with your solicitor that NHBC registration is confirmed before you exchange.
Special Conditions: The Developer's Custom Clauses
Beyond the standard structure, new build contracts include 'special conditions' — custom clauses added by the developer. These are where the most significant traps often hide.
| Common Special Condition | What It Does | Concern Level |
|---|---|---|
| Prohibition on assignment | You cannot sell (assign) the contract to another buyer before completion | Medium — prevents flipping off-plan purchases, but also traps you if your circumstances change |
| No set-off | You cannot reduce the purchase price to reflect defects or incomplete works at completion | High — you must complete at full price even if the property has obvious problems; your remedy is post-completion claims only |
| Limit on pre-completion inspections | You may only inspect the property once before completion (or not at all until the snagging appointment) | Medium — limits your ability to identify problems before committing |
| Contribution to communal works | You must pay a share of future communal infrastructure costs if the local authority doesn't adopt them | Medium-High — open-ended financial commitment; check what the potential costs could be |
| Access reservation | Developer retains right to access your property to complete works on adjacent plots or communal areas | Low-Medium — reasonable during the construction phase but should have a time limit |
| Dispute resolution clause | Specifies how disputes are resolved (mediation, arbitration, or court) | Low — check whether it limits your right to go to court; ensure the Consumer Code dispute route is preserved |
What Happens If Things Go Wrong
Understanding your remedies before you sign helps you assess the risk of the contract.
| Problem | Your Remedy | Practical Reality |
|---|---|---|
| Developer doesn't complete by the longstop date | Rescind the contract; deposit refunded | You get your deposit back but lose time, mortgage arrangement fees, and solicitor costs with no compensation |
| Property doesn't match the specification | Claim for breach of contract; damages for the cost of correcting the deficiency | May need to go to court or arbitration; developer may dispute what 'equivalent' means under the variation clause |
| Defects discovered after completion | Report to developer under the defects liability period (first 2 years); then NHBC warranty (years 3-10) | Developer defects process varies hugely in quality; NHBC claims can be slow and contentious |
| Developer goes into administration | NHBC pre-completion cover (deposit refund up to limits); unsecured creditor for anything above | You may get your deposit back but will need to find another property; any additional losses are unlikely to be recovered |
| You can't complete (mortgage falls through) | Developer can rescind and keep your deposit | You lose 10% of the purchase price — potentially £20,000-£50,000+ |
| Communal areas never completed | Claim against developer; pressure through management company | If developer has dissolved the company or moved on, enforcement is difficult and expensive |
| Roads and sewers never adopted | Bond against the developer (if one was in place); or residents pay for maintenance | Adoption can take 2-5+ years; bond enforcement is complex; you may be paying estate charges indefinitely |
Contract Review Checklist
Use this checklist to ensure your solicitor has covered every critical point before you exchange contracts:
Before Exchange
- Full contract pack received and reviewed — no missing documents
- Specification cross-referenced against marketing materials and show-home
- All agreed incentives written into the contract or specification
- Deposit to be held as stakeholder (not agent)
- Longstop date exists and is reasonable
- Completion notice period is at least 14 days (ideally 21)
- Variation clause has defined limits
- Defects liability period confirmed (minimum 2 years)
- NHBC or equivalent warranty registration confirmed
- Ground rent is peppercorn (for leases post-June 2022) or acceptable and not doubling
- Service charge estimate provided and seems reasonable
- Management company structure understood and voting rights confirmed
- Road adoption (Section 38) and sewer adoption (Section 104) status checked
- Planning conditions reviewed; no outstanding conditions that could affect you
- Section 106 / Section 75 obligations don't restrict your plot
- Restrictive covenants reviewed and acceptable
- Transfer deed (TR1) checked for proper rights and reasonable reservations
- Searches completed and results satisfactory
- Mortgage offer in place and valid for sufficient period
- All developer incentives disclosed to mortgage lender
At Exchange
- Contract signed by you and returned to your solicitor
- Deposit funds transferred (cleared funds required)
- Exchange confirmed by both solicitors (usually by telephone)
- Insurance noted (buildings insurance typically the developer's responsibility until completion)
- You understand the completion mechanism and notice period
After Exchange, Before Completion
- Mortgage offer remains valid (extend if necessary)
- Snagging inspection booked or planned
- Removal firm on standby for short-notice completion
- Solicitor monitoring build progress and liaising with developer's solicitors
- Stamp duty calculation prepared
Frequently Asked Questions
Can I pull out after exchanging contracts?
Only in very limited circumstances. If the developer breaches the contract, fails to complete by the longstop date, or makes a material change that triggers your right to rescind, you can pull out and (usually) get your deposit back. If you simply change your mind or your mortgage falls through, you cannot pull out without losing your deposit — and the developer may also pursue you for additional damages.
What if the developer goes bankrupt?
If the developer enters administration before completion, your deposit should be protected if it's held as stakeholder by the solicitor. NHBC Buildmark also provides pre-completion cover that can reimburse your deposit up to £100,000. However, any other losses (solicitor fees, mortgage costs, price differences on an alternative property) are unlikely to be recovered.
Can my solicitor force the developer to change the contract?
No. Contract negotiation is a request, not a demand. The developer can refuse any amendment. However, on key consumer protection points (stakeholder deposit, longstop date, defects liability), most developers will agree because refusing creates legal risk and bad publicity. Your solicitor should raise concerns through formal enquiries and proposed amendments.
Should I read the whole contract myself?
Your solicitor should review the entire contract and provide a report on title explaining the key terms and any concerns. You don't need to read every clause yourself, but you should read your solicitor's report carefully and ask questions about anything you don't understand. Pay particular attention to the specification, restrictive covenants, and any financial obligations.
What if the developer pressures me to exchange quickly?
The 28-day exchange deadline in the reservation agreement creates legitimate time pressure, but your solicitor should not rush the review to meet an arbitrary deadline. If the contract pack arrives late or there are genuine concerns that need resolution, a competent solicitor will manage the developer's expectations and request an extension. If the developer refuses any extension, that itself is a warning sign. For more on this, see our reservation fees guide.
Is the contract the same for every buyer on the estate?
The core contract and general conditions are usually identical for every plot. Individual variations may include: plot-specific restrictive covenants, different prices, different incentives, and specific conditions relating to the particular plot (e.g., a plot next to a pumping station may have specific noise/odour warnings). Your solicitor should check whether any plot-specific conditions apply.
Related Guides
- New Build Conveyancing: The Complete Process from Instructing a Solicitor to Getting Your Keys
- How New Build Conveyancing Differs from Resale
- Reservation Fees and Agreements: What You're Signing and What It Costs
- Shared Ownership: The Complete Guide to Buying a New Build on Shared Ownership
- Service Charges on New Build Homes Explained