Not upheld: warranty claim declined - defective construction complaint against National House-Building Council (NHBC)

Decision detail

Summary

Mr T and Mrs G complained that NHBC unfairly declined their building warranty claim for defects in the party wall between their property and a neighbour's property. The defects included missing insulation in the cavity and incorrect bricks, discovered via a surveyor's report in March 2025. NHBC declined both the resolution service under section two and cover under section three of the warranty. The ombudsman found the complaint not upheld, determining that while the missing insulation and incorrect bricks are visible defects, they do not meet the warranty's definition of 'physical damage' (which requires the damage to be broken or otherwise physically damaged). The ombudsman also lacked jurisdiction to review NHBC's decision not to offer the resolution service.

The Ombudsman's reasoning

The ombudsman found that NHBC's decision to decline the claim was fair because the warranty requires both a defect AND physical damage for cover under section three. While the missing insulation and incorrect bricks are visible defects, they do not constitute 'physical damage' as defined in the warranty (damage that is clearly visible, impairs performance, and is more than cosmetic). The bricks and insulation are not broken or physically damaged; they are simply absent or incorrect. The ombudsman also lacked jurisdiction to review NHBC's decision not to offer the resolution service under section two, as this is not part of the insurance cover.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website