BLP

BLP

July 12, 2011 03:30 ET

New Homes Warranties Are Not Working

LONDON, ENGLAND--(Marketwire - July 12, 2011) - According to data from Wilkins Kennedy, the Top 22 accountancy firm, 948 construction companies went bust in the first quarter of 2011.

The hardship of this is obviously being felt by the people involved in the companies but the effects spread out far wider as Brian Kilroy, BLP's business development manager, explains: "It is not unusual for a developer to change contractor during a job or for a scheme to pass from one developer to another. However, even when the warranty provider has been involved from the commencement and has carried out all necessary inspections on site, making the necessary amendments often proves to be difficult! In the majority of cases, the developer's only option is to take out a completely new policy. This can be expensive and can even carry penalties for late registration because the works have already started!"

He continues: "I am taking dozens of calls every month from developers caught in this situation. The problems arise when the warranty provider fails to see that the changes are outside of any inherent risk within the design or build and/or will not be pragmatic in addressing the needs of the client."

In contrast, with a latent defects insurance policy, like BLP's*, it is the building that is insured (rather than the supplier) so if any aspect of the development changes, it makes no difference whatsoever. The process is far simpler and means that even developments that have started (or even completed) can benefit from this cover.

Brian concludes: "New Homes Warranties and the way they work rely on the developer or contractor putting right problems in the first 2 years and this responsibility is formalised through legal contracts and guarantees. Warranty providers do not appear to be making amendments easy, leaving developers and contractors struggling for options."

For further information, please call 0207 204 2444 or see www.blpinsurance.com.

*Policy is underwitten by Allianz Global Corporate & Specialty, UK Branch

Notes for editors:

BLP offers an innovative, revolutionary approach to defects insurance for new buildings and refurbishments in commercial and mixed schemes as their policies give clients not only what they want, but what they need.

Unlike traditional new homes warranties, BLP's insurance covers the building – not the developer – and does not ask developers to pay up front registration fees, ongoing membership fees, bonds, guarantees or deposits.

For claims, only proof of damage is required not proof of liability. BLP's cover is approved by the majority of British mortgage lenders.

BLP has long standing relationships with architects, designers, builders, developers, housing associations and professionals to the building, pension and insurance sectors. Some of their clients are: Land Securities Plc, Catalyst Communities Housing Association Ltd, Scottish Widows Investment Partnership, Newlon Housing Trust, Prime Development Plc, Breyer Group Plc, Clarendon Homes Ltd, Concept Construction Services Ltd, Keyside Properties Ltd and Seagrave Developments Ltd.

BLP (Building LifePlans Limited) was incorporated in 1999 and is a subsidiary of Thomas Miller. It is regulated by the FSA and backed by Allianz Global Corporate & Speciality AG (UK branch) which has an AA insurer star rating.

For further information see: www.blpinsurance.com

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