Had an offer accepted on a new build done by a small, independent builder. Was all going well until today I found out that there is no NHBC cover and only an architects certificate.

Is anyone able to tell me in simple terms what this is and does it provide me with any kind of cover from small snagging issues up to major structural problems?

It depends on what the wording says on the certificate. Some just cover conformity with building regs. Some have a lot of caveats for good reasons actually. If anything goes wrong you or your insurance company would have to take legal action. You should at least check what levels of indemnity the architect is insured for under that certificate.

Do you mean a Certificate, or a Colateral Warrenty?
A completion certificate is issued on completion of the building contract to the Contractor and is to demonstrate the works that form the contract have been complete in the eyes of the contract administrator.
A Colateral Warrenty passes on securities to a third party (or their lender) which were not party of the original contract. This will cover specification and design, but not hold up against defects in workmanship.

It sounds here like it’s a (Practical) Completion certificate which as mike399 says is confirmation from the Architect (assuming they are the one named in the Contract) deeming the work to be complete.

This wouldn’t necessarily offer any protection in the event of a defect appears in the defect period.

In effect you could be buying the house with the only recourse to rely on whatever is included in your purchase agreement with the building contractor or in the extreme taking action against the contractor.

My experience is based upon larger construction work rather than domestic property but I’d suggest having some form of inspection of your own to help identify anything which is not up to scratch. Also having details of any snagging or defects schedules which accompanied the certificate would be helpful as completion can be given with patent (known) defects still existing.

With reference to a collateral warranty this is an agreement between the individual contractors(or subcontractors), the main contractor and you as the beneficiary. It only comes into effect if the main contractor ceases exist and passes the rights and remedies of these contracts (or subcontracts) To the beneficiary. Therefore I doubt this is what you are bei offered and if it did would only help if the company you are buying the house from go bump.

The practice I used to work at nearly got taken down by issuing an architects certificate without fully realising what it could actually be used for. Claims totalled over £350k against our PI and massively increased the premiums for the next five years. We only just survived.

It’s not a PC certificate. Thiis may be useful to the OP and anyone eles!
https://www.architecture.com/RIBAMembership/LoginToMembers-onlyArea/MemberServices/ProfessionalSupport/CMLcertificate.aspx

From a mortgage company point of view, lending on the property…… Depends on the Architect

A collateral warranty transfers rights beyond the initial contractual arrangement. It has nothing to do with other people going bankrupt.
In the end, go there with a disinterested third party, see what it is and then make your decision.

Thanks but sorry still a little confused. There has been no mention of a warranty. Just an architects certificate.

So if the shower develops a leak in 6 months and damages the kitchen below I’d have no warranty to claim on?

If the builder has not enrolled in the NHBC scheme, then NHBC will not be underwriting any warranty on the build.

You may be able to get the builder to subscribe retrospectively, but I would expect NHBC to tell them to shove it.

That leaves you with the option to get third party cover. Some providers listed here. Zurich insurance used to be the go-to outfit (its who I used with my own self build) but theyve withdrawn from the market.
https://www.citizensadvice.org.uk/consumer/getting-home-improvements-done/building-organisations/building-guarantee-schemes/

I would adjust my offer by whatever the cost of the premium is for the cover.

Your mortgage lender would also usually expect to see a new build warranty on any new build house purchase.

You are correct Prezet, you have no warranty.

From the ARB web site:

“confirming its conformity with Building Regulations and the contractual instructions for the purposes of securing a mortgage on the property.”

You need to make sure that you end up with a professional consultants certificate in the form required by the Council of Mortgage Lenders. See the CML handbook on line. Your conveyancer will or should know about this.

See here.

https://www.cml.org.uk/lenders-handbook/pcc/

p.s. I would have no problem with an AC and its quite common – I usually ask for a copy of their pi insurance as well. It will not cover snagging which will be down to the builder – just think of it as doing what an NHBC warranty would do in terms of main structural type works.

@Nipper99 – I’m more concerned about being able to claim for a structural defect, from what I can tell I am unable to do this based on a AC. Is that correct?

In my example of a shower developing a leak – I’m guessing this wouldn’t be a snagging problem? So how would a AC cover me here??

What happens if the builder goes out of business, again what cover would I have with just an AC?

This all leaves me with too many unknowns, where it seems a simple warranty would cover all these problems.

prezet the AC not in reality significantly different from NHBC cover which is why it is acceptable to most institutional lenders.

If you have concerns about the viability of the builder / developer then whilst most sales agreement will have an obligation for the seller to construct the property in a good and workmanlike manner etc. there is the risk of the builder going through. If you consider that a real risk I would ask your conveyancer to negotiate a retention from the purchase price for a period of say 6/12 months to cover the cost of snagging issues.

the AC stands even if the builder goes out of business.

Also another question – Is this something I should seek to resolve myself before I get a conveyancer involved, or should I just let the conveyancer deal with it?

I would just try and do what stoner suggested and buy a policy to cover defects for, say 5 years if you can and deduct it from the purchase price.

prezet the AC not in reality significantly different from NHBC cover which is why it is acceptable to most institutional lenders.

I’ve read differently, in that some lenders will not approve an application based on an AC alone – it needs some kind of additional warranty in place.

Also, this article (while it may be out of date now?) leads to a very different view that an AC and NHBC are very different from a buyers (not a lenders) perspective: http://www.lexology.com/library/detail.aspx?g=3840e1dc-43f8-4d57-863a-a45e73281625

Get some legal advice

As said above, an Architect’s certificate (of practical completion) does not protect you as a buyer from construction defects. If the vendor is offering a transferable Designers collateral warranty, you will have some protection from design defects, but again not workmanship defects. Also the warranty may not be assignable, in turn, by you – when/ if you come to sell the house. (You would need to read the actual warranty/ get legal advice on this). Design warranties are notoriously difficult to claim against anyway.

Would you buy a new car without a warranty?

AFAIK all companies offering insurance backed transferable warranties against building defects (E.g. NHBC cover) require the contract setting up at the outset, so they can inspect the building works progressively – I.e. it will now be too late to get such a warranty in place I’m afraid.

An Architects Certificate and a Certificate of practical completion are different things.