new build 'snagging'

Snagging schedules or lists are more correctly termed Schedules of Outstanding Works.

The slang term originated as part of building contract procedure.  When the contracted works are complete with the exception of some minor defects the Supervising Surveyor issues a Certificate of Practical Completion.  At the same time he or she prepares a Schedule of Outstanding Works which are required for the contractor to comply with the terms of the building contract.

This final Schedule has been termed a 'snagging list' over the years.  Many people have adopted the same phrase to describe the Schedule of Outstanding Works prepared as part of a contract of purchase of a new build property.

However, one in important difference is that a sum of money is retained under building contracts until works have been dealt with.  Retentions from purchase prices are rare.

Snagging lists are of value both prior to purchase and during the two years following purchase.

New build contract terms

New build properties are often bought 'off-plan' and the contract of purchase contains provisions for exchange of contracts when the construction work is close to completion.  The contract is completed when outstanding works have been dealt with.

There are commonly provisions for the developer to serve notices on the purchaser requiring exchange of contracts and completion at specified dates.

Developers drive the notice process forward, sometimes when major works are incomplete, promising that works will be carried in time for the completion date.

Inevitably, there are cases where the works are not carried out by the purchase date.  Some purchasers proceed and attempt to coerce the developer to carry out the works after their purchase.

Once the purchase price has been paid the developer has little incentive to carry out works.  The developer's attention is focused on the next project or ensuring that the next unit or phase in the development reaches the point where it can be sold. 

Many purchasers find that it is an uphill struggle to force the developer to deal with outstanding work.  They suffer the stress of constantly chasing the developer for action and spending days at home waiting to keep appointments with builders who may arrive unprepared, late or not at all.

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A strategy for purchasers

We believe that the best time to deal with these matters is prior to release of the purchase monies, when the developers mind is focused on doing what is necessary to obtain the purchase price.

We recommend that:-

1. A Schedule of Outstanding Works be prepared by a Surveyor at exchange of contracts.
2. Completion of the purchase be dependent upon completion of the works contained within the Schedule.
3. If completion of the purchase has to proceed before all the works have been carried out then part of the purchase price be retained until works have been completed to the surveyor’s satisfaction.

Defects after purchase

Defects to new build property often arise following purchase.  The purchaser relies upon the contract of purchase and the long-term guarantee provided by the developer via an insurance company.

Contracts to buy property are excluded from the Consumer Protection Legislation and purchasers rely upon the developer’s goodwill and, as a last resort, costly Court action.

Developers long-term guarantees

The insurance long-term guarantee is restricted to major structural defects with the exception of the first two years when minor defects are included.

However, the insurance company relies on its contract terms with the developer and it is necessary to go through a process of complaints to the developer before the insurer takes action.  That action would normally be to instruct the developer to carry out certain works.

Such insurance backed guarantees have a greater value should the developer become bankrupt and major structural defects come to light.

'Snagging' after purchase

Most purchasers of new build property are not experts in building construction.  They find that a 'snagging list' prepared by a Surveyor at any time during the two years following purchase is the best way of driving forward the process whereby defects are corrected.  The surveyor can also represent the purchaser, dealing with the builder and insurance company.

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Is a 'snagging list' similar to a building survey?

No.  A building survey is a detailed report on the condition of the building combined with advice on many matters relating to building construction, repair and potential defects.  A 'snagging list' or Schedule of Outstanding Work is a list of works for a developer to complete in order to allow a sale or purchase to proceed.

Some clients require both a building survey report for advice on the property and a 'snagging list' as a document used in their purchase procedure.  Both can be dealt with at the same time.

Our 'Snagging' Schedule Service

We inspect the property in detail both internally and externally, within every room, accessible roof spaces, garages, outbuildings and grounds.

We produce a Schedule of Outstanding Works which should be carried out prior to completion of the purchase.

We supply two copies of the Schedule to the client and two copies to the client’s solicitor.  If requested we also provide a copy for the developer.

We carry out final inspections prior to purchase completion to confirm that all work has been carried out satisfactorily.

Should a client wish to complete the purchase of the property prior to the works being carried out his/her solicitor may recommend that a sum of money be retained from the purchase price.  We would assess a suitable sum.

We provide a similar Schedule of Outstanding Works, if required, following purchase and negotiate, on behalf of clients, with developers and insurance company representatives to agree a satisfactory settlement.

James Flynn Surveyors?

We are an independent firm of surveyors and have been advising clients on all aspects of property value and condition since 1980 from our offices in London, Surrey, Hampshire, Sussex and Kent.  We mainly cover the London and South East region but travel further afield when this is requested.

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To contact us please select from the appropriate area link below:

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