Section 106 affordable housing warranties
Structural warranty cover for affordable homes delivered through planning obligations - what the developer needs to arrange, and what the registered provider buying the homes should check before completion.
- Instant response
- Insurer quotes usually within one working day of your proposal
- UK FCA Regulated Broker
- No broker fee to pay
- Rent, shared ownership and sale
How section 106 homes are delivered
One site, two parties and a warranty that has to work for both
In England and Wales, a section 106 agreement attached to a planning permission often requires a share of the homes on a site to be affordable. In Scotland the equivalent is usually a section 75 agreement. Very often the developer builds the affordable homes and sells them to a registered provider, sometimes called a package deal, with each home passing to the provider as it completes.
Those homes will usually come with the developer's structural warranty. The real question is whether that cover suits the housing provider that ends up owning them, and the shared owners who may later buy a share.
Two perspectives
What each side of a section 106 deal should check
For developers
- Register the whole site, affordable plots included, before work starts
- Check the provider is acceptable to the housing provider buying the homes and to shared owners' lenders
- Read the sale agreement - it may say what warranty the housing provider expects
- Make sure each affordable home has its final certificate ready at handover
For registered providers
- Ask early which warranty provider covers the homes, and for evidence the site is registered
- Check the warranty passes to you and covers every home you are buying, including any in separate blocks
- Check the cover suits how you will hold the homes - rent, shared ownership or sale
- Track the final certificates, so none are missing when homes complete
When it is not straightforward
Late affordable homes, changed tenures and missing certificates
Section 106 schemes change. Affordable homes can be added or moved around a site after a planning variation, tenures can switch between rent and shared ownership, and a housing provider can come in after work has started. Tell the warranty provider about changes as they happen, so the cover and the certificates keep pace with what is actually being built.
If affordable homes were started without a warranty in place, retrospective cover may still be possible from some providers, with more evidence and at a higher price. Our sister brand Retrospective Warranties specialises in cases like these.
Section 106 warranties - common questions
Does the developer's warranty pass to the housing association?
Usually a structural warranty stays with the home and passes to later owners, including a registered provider buying section 106 homes. Check the policy wording, the schedule, any endorsements and the transfer terms, and make sure you receive the certificate for each home.
Who pays for the warranty on section 106 homes?
Usually the developer arranges and pays for it as part of building the homes, but the sale agreement with the housing provider sets out who does what. We can arrange cover for either party.
Can the affordable homes use a different warranty provider from the market homes?
It can be possible, particularly where the affordable homes are in separate blocks. It adds inspections and administration, so agreeing one provider acceptable to everyone at the start is usually simpler.
Does section 106 apply in Scotland and Northern Ireland?
Section 106 agreements apply in England and Wales. Scotland uses section 75 agreements, and Northern Ireland has its own planning agreements. The warranty questions are much the same wherever the site is.
Tell us about your section 106 scheme
Whether you are the developer or the housing provider buying the homes, tell us about the site and we will come back with the providers likely to cover it.
- Takes under a minute
- Instant reply by email with your reference
- Insurer quotes usually within one working day of your completed proposal
- Schemes anywhere in England, Scotland, Wales and Northern Ireland
- Free and no obligation
Already filled in a proposal form? Email it to us or send it on WhatsApp with any drawings you have and we will take it from there.
