It is a pleasure to serve under your chairmanship, Mr Davies. To ensure that the developers of new build homes are accountable for their actions, they will be required to become and remain members of the new homes ombudsman. The principle of requiring organisations to belong to an ombudsman or redress scheme by law is not new. Clause 130 provides the legal basis for the Secretary of State, by regulations, to require developers to become members of the scheme, and to remain members for a specified period. That may extend to when they are no longer developers, which will ensure that they meet their responsibilities to the people to whom they sell homes.
The clause also allows the Secretary of State to require members to inform purchasers of the scheme, which may include requiring members to obtain, display or produce on request a copy of a certificate confirming their membership of the scheme. It also provides for an enforcement framework to be put in place to protect against rogue developers who breach the requirements in the regulations, and that includes the imposition of civil sanctions for breach of the requirements.
The proposal will create a flexible enforcement framework, allowing the Government to task an existing or new regulator or enforcement body with investigating and sanctioning breaches of membership and publicity requirements, and to resource that body accordingly. Proportionate safeguards are attached to the new power. Where provision is made for sanctions to be imposed, there must also be provision for the right to appeal the imposition of a sanction. The clause is vital as the basis for a future-proofed and comprehensive redress, accountability and enforcement framework.
Clause 131 places a requirement on the person who maintains the new homes ombudsman scheme to keep a register of the scheme’s members and make it publicly available. That will help instil more confidence in the transactional process, given that a prospective purchaser will, for example, have greater assurance that issues with their new build home, if they happen to arise, can be resolved via the new homes ombudsman.
It is a pleasure to serve under your chairmanship once again, Mr Davies. I have a brief question for the Minister about examples of civil breaches and sanctions. He referred previously to the fact that, under current protections, new homeowners have fewer rights than those purchasing a new toaster, so enforcement measures and sanctions will be vital. Will the Minister briefly expand on that?
I think, in terms of the spectrum of powers, that we are better focusing on the ultimate power: that developers could be expelled from the scheme if they do not comply with the ombudsman’s code. That would prevent them from developing in the future, which feels like a heavy stick with which to beat them should they decide not to comply. It is therefore important for that ultimate action to be available, so that people know that a developer not prepared to comply with the code will ultimately be prevented from building homes in the future.