Some recent cases we’ve dealt with for housebuilder clients have raised the issue of what ought to be a simple question: what company does the customer have legal rights and remedies against, in relation to the purchase of their new property?

Generally, in the cases we tend to deal with, the customer’s rights and remedies will be against the company, or companies, with whom the customer concluded missives. However, the caveat to that in each case is what the nature of the claim is and how it arises. For example, the position might be different for a non-contractual duty of care for “after care” work, or an alleged misrepresentation made in pre-missives advertising materials.

In recent cases, customers have proceeded to either raise more than one court action, each against different companies within the corporate group, or simply raised an action against the wrong company.

The circumstances that have led to this vary, but include (1) references to trading names being used in customer-facing documents instead of a full company name, or (2) reference to company A, who is actually acting as agent for company B, where there is no reference to company B.

There are regulations that require full company names to be used on documents that a company issues, and which can include customer-facing documents (e.g. all forms of business correspondence and documentation). There are also requirements in terms of consumer protection. For example, the New Homes Quality Code requires a registered developer to disclose who the customer is buying a new home from (para 2.2(a)) in relation to reservation agreements.

We would recommend that care is taken in relation to both pre- and post- purchase stages.

On pre-purchase steps, we would generally recommend that a site-specific approach is taken to reviewing and preparing marketing materials and reservation forms, to – so far as possible – ensure that full company names are on the documents and correspond with the relevant company or companies who will be selling the properties (under the missives). These full company names can be on the documents in addition to a logo of, for example,  a trading or brand name that is not the full company name – we would recommend linking the two in some way in the ‘small print’ (e.g. that the trading or brand name is one used by the company).

On post-purchase after care steps, we recommend that care is taken to check email footers and letter heads to see if there is inconsistency between the company who the customer purchased the property from and which company/trading name subsequently appears on after care correspondence with the customer. There are numerous ways in which this can be resolved – and the most suitable one will depend on each organisation.

The impacts of any confusion can lead to increased legal costs if the matter reaches court, particularly if the customer is not legally represented. It can also adversely affect the extent to which you can recover costs if you are successful in ending a case raised against the wrong company, if the decisionmaker considers that the documentation made the position unclear for the customer.

So, in short: it might be worth a spring clean up of any style documents, such as reservation forms, to check that they meet the company name regulations and match up with the company selling properties on the corresponding site.

If you have any questions on the above, or would like help reviewing and amending documentation, please contact Stephen Farrell in our real estate litigation team or Mike Guthrie, our head of home sales.

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