Not upheld: handling of building warranty claim; dispute over warranty section applicability complaint against National House-Building Council (NHBC)

Decision detail

Summary

Mr H and Mrs H complained about NHBC's handling of a building warranty claim regarding chimney flashing and water ingress at their property. The issue was first identified in a snagging list in February 2022, reported to the builder in 2023, and continued to cause problems. NHBC declined to consider the claim under Section 2 of the warranty and instead offered to consider it under Section 3, requiring a physical inspection. The ombudsman found that Section 2 is not an insurance activity and therefore outside FOS jurisdiction, and that NHBC's approach to validate the claim under Section 3 was reasonable. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that NHBC's warranty includes non-insurance activities, specifically the Section 2 resolution service, which falls outside FOS jurisdiction. The ombudsman could only consider insurance-related activities under Section 3. Since no resolution report had been issued directing the builder to complete works by a deadline with subsequent failure or insolvency, the conditions for FOS jurisdiction over Section 2 were not met. The ombudsman found it reasonable for NHBC to validate the claim and require a physical inspection, as video evidence alone was insufficient to establish the cause of water ingress. The ombudsman noted that subsequent investigations following the physical inspection fell outside the scope of the complaint being considered.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website