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Construction quality of new homes set to improve

The first insurance provider offering a 10-year warranty against hidden (latent) defects for newly built and converted homes and commercial property has established a presence on the island.


REPORTS of poorly constructed homes in Cyprus are legion. Problems of leaking roofs and damp penetration are common and, most recently, reports of a development that is slipping down a hill at Armou in Paphos have made front page news in the local press.

All that is about to change.

British-based insurer Premier Guarantee, one of Europe’s leading providers of structural warranties and building control and support services, has become the first company in Cyprus to offer a 10-year warranty against hidden (latent) defects on newly built and converted homes.

Premier Guarantee for Cyprus is designed for property developers and contractors who wish to gain a competitive advantage over their rivals and help restore the tarnished reputation of the Island’s construction industry.

But more importantly, it provides those buying property with a number of significant benefits, including:

  • The buyer gets a full 10-year protection against losses resulting from defects in the design and/or materials and/or workmanship of a property that results in major damage to the structural elements.
  • The company will settle the claim without the buyer having to prove negligence or blame on behalf of the developer or contractor. This avoids lengthy delays in making repairs and the costs involved in obtaining reports from independent engineers and drawn out and expensive litigation proceedings.
  • In the event of the property being re-sold, the insurance cover is transferable to the new buyer.
  • Should the developer or contractor become insolvent or fail to honour their responsibilities the insurance remains intact.
  • If the developer has chosen to include the additional options available to him, buyers will also benefit from a 10-year warranty covering the waterproofing of roofs, external walls and basements, costs of accommodation and loss of rental income while repairs are being made.

Once a developer has been accepted into their scheme, the company carries out a technical assessment – an audit of the property’s design to ensure it meets the construction requirements set out in its 320 page technical manual, which are required to achieve the warranty standards.

Members the company’s 50 strong technical audit team carry out on-site inspections at critical stages of the build to ensure that its required warranty standards are maintained throughout the construction process.

About Premier Guarantee

Established in 1997, the British-based company Premier Guarantee has arranged cover on over €34 billion of property in the UK, Ireland, Spain and now Cyprus – and has become one of Europe’s leading providers of latent defects insurance.

All policies issued by Premier Guarantee for Cyprus are insured by AmTrust Europe Limited. AmTrust Europe Limited is part of the AmTrust Group, a worldwide insurer, who amongst other classes of insurance specialise in Building Warranty risks. Their security rating is excellent, having received an ‘A’ rating for financial strength from A.M. Best.

Readers' comments

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  • Denton Mackrell says:

    @Nigel. Yes, the good do indeed exist – BUT hens’ teeth, hens’ teeth. I see nothing in this entire story and thread that leads me to believe that there is going to be some miraculous (or even a modest,bubbling along) change of behaviour by developers here. I wish this insurance crew good luck but they should not hold their breath in expecting big bucks out of it.

  • Mike says:

    A step in the right direction but I too would offer a 10 year warranty, the only stipulation being that the first premium is equal to the cost of a total rebuild to accredited standards. I am certain an insurance company will have assessed the risks and will write a policy commensurate with those risks.

    As Nigel say’s we have very able builders in Cyprus and highly qualified and experienced architects too. Sadly some of the major developers put short term profit way before any kind of quality and use unqualified labour to undertake skilled work and compromise on quality materials to boost profits.

    Very much like the major builders in Britain – there is no difference and anyone alluding otherwise is deluding themselves.

    The lack of planning, inspection and quality control on domestic building is not so evident on commercial builds but as long as we pay top dollar for sub standard work it will be provided. The building industry has got what it deserves but government and its agencies must shoulder much of the blame for not being in control and permitting the tail to wag the dog.

    As an aside and off topic if I may – I agree an NHBC warranty is generally not worth the paper it is written on.

  • @Curmudgeon – Firstly, the article is NOT about the NHBC and any problems that you may have had in dealing with them. Please read the comment guidelines.

    Secondly, it’s quite simple; if the developers do not improve their building standards, then they will not sell property.

    Thirdly, if you take the trouble to read the article, it’s an insurance policy – there is no need to take the developer to court – you submit a claim to the insurance company and they will take the develop to court if it becomes necessary.

    Fourthly, there are skilled and accredited tradespeople here – who do you think built my house???

  • Curmudgeon says:

    If you’ve ever had to make a claim on the NHBC warranty you’ll know it is an uphill task nearly as bad as trying to get your developer to sort snags out (having said that, the NHBC does eventually come up with the goods whereas the Cypriot developer doesn’t).

    Any building warranty is a positive move within the Republic. But, can anyone see the developer forking out for the warranty, can anybody envisage a building passing the requirements? I cannot.

    If you get a ‘warranty’, any claim will probably be voided due to some infringement or technicality. Fancy chasing the issue through a Cypriot court? You’ll be grey and six foot under before your time.

    Just won’t work here in Cyprus until they get trained, accredited tradesmen.

  • Odd_Job_Bob says:

    As it is wet and windy where I currently am, I thought I’d try to spitefully dampen the optimism expressed re: the above article by any who are currently enjoying the lovely Cyprus weather.

    I had a maths lecturer once who did this jolly clever thing whereby he proved that, if you make the initial assumption that zero can be treated as any other number, then 2 = 1.

    Here goes:

    Under normal circumstances: 2 x 0 = 1 x 0 = 0. But if you substitute “0” with “a number”, you get:

    2 x (a number) = 1 x (a number), which leads to 2 = 1. Which is clearly very very wrong.

    What he was trying to prove was that if the initial assumption is deeply flawed (i.e. 0 can be treated as any other number), then everything flowing from it will thus be a load of cods.

    The aim of the Premier Guarantee is to, from the manual, “assist Developers in building dwellings to meet the technical requirements”. I.e, new builds, not existing stuff.

    There is already way too much housing stock in Cyprus that will NEVER meet the Premier Guarantee’s requirements (unless they are knocked down and built again, but properly this time). People don’t even know if the property they’ve got (which may or may not be falling down) will be taken away from them when the fateful knock on the door from the developer’s bank arrives.

    Only an idiot developer would build new stuff from scratch, at a far higher cost than normal in order to meet PG’s requirements, in the distant hope of being able to sell in a dead market as he will now have a “guarantee” that it won’t fall down.

    The initial assumption then that a developer will want any assistance in order to meet PG’s technical requirements is thus flawed. Deeply, deeply flawed.

    So, why have PG made this big announcement now?

    Hands up all those who’ve heard of Premier Guarantee before this article?

    Hands up all those who have now?

  • John says:

    Andrew,

    Inspections on site will be carried out by professional, experienced surveyors. Critical stages of construction will be targeted. Their role will be to ensure that as far as can be determined, the construction meets the requirements of the initial design, legislation (Eurocodes), the insurer’s relevant technical standards and general good practice. Should the developer/ contractor fail to meet these requirements, insurance cover will not be offered.

    It is acknowledged that most structural problems do show within 10 years of construction.

    For developers who chose to access the scheme, structural cover is compulsory. There are then optional endorsements which include cover for the waterproofing elements of basements, external walls above ground level and roofs. Taking the option on these endorsements would alleviate some of the other potential problems you discuss.

  • Frank says:

    When the government has trouble collecting taxes from developers and buyers have trouble getting legal ownership from developers and banks have trouble getting loan payments from developers and purchasers have trouble getting developers to use quality materials which are fit for purpose; rather than cheaper substitutes: what chance is there that developers will pay the premiums for this insurance?

    Latent defects insurance is unlikely to be a suitable product for a developer whose business model involves the deliberate inclusion of latent defects, to cut their costs and enhance their profits.

  • @Andrew – I suggest that you read through the company’s technical manual (link in article), which describes the functional requirements. It’s 11Mb, so it will take some time to download it.

    As for scheduled building inspections, the company does carry these out to ensure the required standards are maintained throughout the construction process.

    I don’t know if you are aware – but in the UK you cannot get a mortgage on a new property unless it is covered by a 10-year warranty (the NHBC being the most well known). Hopefully the banks in Cyprus will adopt a similar approach as this will help drive the many ‘cowboys’ out of the market.

    I took delivery of my house in 2004 – no sign of damp, leaking windows or roof, etc – I have guttering to take much of the rainwater to a soakaway in the garden. I’m currently repainting one of my retaining walls, which faces west and gets the worst of the wind, rain and sunshine.

  • Andrew says:

    How nice it would be if that company would pay out when the hapless buyer finds that their new home has no thermal insulation, no damp proof course, no provision for rainwater removal, inadequate drainage.

    Most of these things are common yet unlikely to cause major damage to the structure during the first ten years.

    The industry needs to adopt a system of proper scheduled building inspections DURING construction.

  • Costas Apacket says:

    Sounds brilliant!

    A real step forwards.

    Let’s see how many Cypriot developers/builders are competent enough to pass the vetting process.

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