The 'gagging' clauses to know before buying a new build home

Yahoo

01-05-2025

Homeowners on a new build estate in Oxfordshire have complained they have been 'gagged' from objecting to another housing development nearby by a clause in the contract they signed when they bought their house.
Residents of the 191-house Highlands Park development in Henley-on-Thames, say they were shocked to discover a 'non-objection' clause in their buyer contracts.
The development was completed by Crest Nicholson in 2020, and the company has now submitted plans to South Oxfordshire District Council for permission to build 131 more homes nearby.
The new plans represent 'phase two' of the development but some of those who bought homes on the current site say they have been banned from objecting to the second development.
Developers have been criticised by homeowners for using non-objection clauses and Non Disclosure Agreements (NDAs), saying they stifle complaints from concerned residents.
The clause within their contracts stipulates that residents could not express objections to neighbouring planning applications.
It says that 'the buyer agrees not to object or cause any objection to be made to any planning application made by the seller in respect of any neighbouring or adjoining land which relates to the development or other residential development'.
It continues to state that the buyer agrees 'not to lodge an objection or objections with the local planning authority or relevant government department or object or be represented at any public enquiry called in connection with such planning application'.
The new planning application is for a mix of one- and two-bed apartments, one-bed maisonettes, and two, three, four and five-bed houses in its 'northern field'.
But residents say some community facilities promised in the first development, such as a community centre and football pitches, will also be relocated, as part of the new planning application.
One unnamed resident said: 'I see it as a gagging order. That's the whole purpose of putting it in there. It's to gag you.
'It gives them total freedom to do what they want. It's horrendous. People are afraid. It's intimidation.'
He added that most people might have agreed to the contract after "skim-reading it" and only spotted the clause in January after being told by a neighbour.
'They can do what they want. You're entitled to object," the anonymous resident said. "You can put anything into a contract. It doesn't make it legal or defendable.'
Some living in Highlands Park complained about a lack of feedback from Crest Nicholson after voicing concerns about the new development.
Objections to the development include negative environmental impact which exacerbate the loss of wildlife, but some residents say they would not object to the new homes just the changing of sports facilities.
The unnamed resident said he had complained about the relocation of the football pitch and other facilities as he felt the changes had been done 'in haste'.
It is hard to establish just how common non-objection clauses and NDAs are, as people who have signed them rarely speak out through fear of legal action.
Developers can use non-objection clauses for many reasons often between landowners and developers within large-scale infrastructure projects, or phased developments.
Often these contracts will have many clauses and buyers should always seek legal advice before and during the purchase of a new-build home.
In this example the developer uses a non-objection clause to ease the planning process for 'phase two' of the development, which is set to be built nearby.
Developers argue that when economic realities happen - such as financial crashes - then they should be free to change developments.
Geoff Peter, of Wingrove Law, a solicitors which acts for buyers of defective new build homes, told Yahoo News: 'The contract terms may seem innocuous, but buyers need to be aware that a development can change.
'Prospective buyers need to educate themselves and understand that this is a risk they are taking when buying new build properties.'
Complaints can arise when the development changes perhaps increasing the number or size of homes, which can be down to many factors, including financing or local restrictions.
'It can sometimes be seen as a cynical commercial ploy by developers which often have under-staffed local authority planning departments over a barrel', he said.
Developers more commonly use NDAs to protect sensitive information. Earlier this month it was reported that residents on a new-build estate were asked to sign an NDA after asking to see invoicing behind their estate fees.
Other homeowners say they were asked to sign non-disclosure agreements (NDAs) as a condition of building repairs being completed, as far back as 2021.
NDAs are widely used in many industries and are legally binding with penalties including injunctions and potential court proceedings leading to financial damages.
And although it is not known if a civil case has been brought specifically against a breach of a non-objection agreement in a new-build estate, Peter's advice is that the contract should not be broken.
'If you do object in this instance, you are likely to see a strong response, with the developer initially likely asking for a withdrawal to any objection,' he said.
'Then possibly further consequences which could come back to haunt you. It may feel that the clause is unreasonable but there is not much that can be done from a contractual point of view.
'The clause may prevent homeowners from engaging with the planning process, which may feel unreasonable, but still forms part of their contract.'
In February this year, the Court of Appeal clarified the lawfulness of non-objection clauses in option agreements, in Suffolk Energy Action Solutions SPV Ltd v Secretary of State for Energy Security and Net Zero.
The court did note that although the clause was legitimate 'in the circumstances of this particular scheme' it may not be legally applicable to all contracts and to all developments.
If you have a non-objection clause in your homes contract and would still like to complain about their actions, it is important to complain to the developer directly first.
If you are not happy with the response, the New Homes Quality Board has published a New Homes Quality Code (NHQC) which many large developers such as Barratt, Taylor Wimpey, Redrow and many more have signed up to.
The code says developers must have a 'reliable after-sales service and effective complaints procedure'.
You can also complain to the New Homes Ombudsman (NHOS) which helps customers resolve issues with their new homes.
The NHQC code is monitored by the New Homes Ombudsman (NHOS) and sets out several principles that developers should abide by with penalties up to £75,000 and an expulsion from the NHOS scheme.
But even if you do go ahead and object, often local authority planning departments are often ill-equipped to take on developers after residents objections.
Mr Peter founded Wingrove Law to help homeowners who bought houses and later discovered serious defects with their properties, the practice has represented hundreds of homeowners against developers.
'If local councils object, this could lead to a costly legal battle they may lose, so often avoid,' he said. 'Even a homeowner's objection is unlikely to be a significant factor in the council or developer's minds.'
According to the planning portal a planning decision was due to be made by April 25, but as of no update has been logged.
A spokeswoman for Crest Nicholson said the clause 'has been included in our contracts previously'.
She said: 'As a member of the New Homes Quality Code, we regularly review the provisions in our agreements and are currently reviewing our documentation in line with upcoming changes to the Code issued by the New Homes Quality Board.'