In today’s development landscape, securing both building warranties and deposit protection is a smart strategy for developers looking to safeguard their projects while optimising project returns. At J3 Advisory, we specialise in sourcing these solutions, backed by A-rated capacity to ensure reliability and peace of mind.
When it comes to deposit protection, understanding the claims process and the capacity behind the solution is vital. As Johnny Leadsom, Director at J3 Advisory, emphasises, “There’s often noise in the market about deposit protection – Our focus is on ensuring the solutions we provide are backed by A-rated capacity with a proven claims process, giving developers and buyers alike true peace of mind.”
For instance, in a recent project, Nomad Developments worked with J3 Advisory to secure an A-rated building warranty for their £16 million luxury apartment development in Surrey. This warranty covers potential structural issues, offering protection for both the developer and future buyers.
In addition to the building warranty, deposit protection was secured to help safeguard off-plan deposits and reduce the need for interest-bearing loans..
Here’s an example of how deposit protection works in practice assuming the risk is acceptable to the underwriter :
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A developer agrees to sell a house for £750,000 and requests Deposit Protection Cover
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The proposed purchaser pays a £75,000 deposit, and a signed contract is provided to the insurer. A certificate is then issued in the purchaser’s name.
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If the developer enters insolvency after starting work, the purchaser can present a claim to ICW under the Section 1 certificate.
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In this scenario, the purchaser would be refunded their £75,000 deposit. * (Financial limits apply)
If you’re interested in learning more about how this approach can benefit your development, get in touch with J3 Advisory today.
