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  • FIRST POST
    Sammie_UK1
    Extension with no Building Regs - Indemnity Insurance confusion..!
    • #1
    • 26th Apr 12, 5:19 PM
    Extension with no Building Regs - Indemnity Insurance confusion..! 26th Apr 12 at 5:19 PM
    Hi,

    I'm in the process of buying a house which has had some building work done on it. The current owners say that the work was done before they purchased the house and they do not have details on whether the work done conforms to building regulations. I've recently discovered that due to this I might need to obtain an Indemnity Insurance Policy.

    My questions are:

    Has anyone in a similar position been required to obtain an Indemnity Policy?

    Is it absolutely neccessary? Will my mortgage company not comply/offer funds without a policy in place?

    How much does it cost to set up?

    I'm guessing that the current owners must have an indemnity policy in place from when they bought the house, can I not take over their policy and extend it?

    Sorry if my questions are dumb, I know nothing of Indemnity Policies and I have a newborn to tend to so don't have the time to do my research and find out myself?

    If anyone can share their experiences of Indemnity policies and buying properties without building regs, that would be most helpful.


    Thanks..
Page 1
    • pmlindyloo
    • By pmlindyloo 26th Apr 12, 5:35 PM
    • 9,753 Posts
    • 11,479 Thanks
    pmlindyloo
    • #2
    • 26th Apr 12, 5:35 PM
    • #2
    • 26th Apr 12, 5:35 PM
    Similar questions asked and answered here:

    http://www.homemove.co.uk/forums/buying-a-house-with-no-planning-permission-or-building-regs-for-extension-3028.html

    Richard Webster posts on here so he might be along later to answer any further questions.
  • Elzibaby
    • #3
    • 26th Apr 12, 5:40 PM
    • #3
    • 26th Apr 12, 5:40 PM
    Our solicitor has basically told us a Indemnity Policy isn't worth the paper it's written on the majority of the time, in our case the council know about the problem so our circumstances may be different. We have just pulled out of a sale as they have "claimed" land that belonged to the council but isn't registered as there's and there are no documents for the loft conversion so it can only be classed as storage ( but the description of the house had it as a room) I'm confused over all this also, the seller keeps contacting us and dropping the price but I think we've already made our minds up
    • Yorkie1
    • By Yorkie1 26th Apr 12, 7:09 PM
    • 11,006 Posts
    • 20,506 Thanks
    Yorkie1
    • #4
    • 26th Apr 12, 7:09 PM
    • #4
    • 26th Apr 12, 7:09 PM
    If the council know about the problem then an Indemnity Policy is not possible.
    • phoebe1989seb
    • By phoebe1989seb 26th Apr 12, 9:38 PM
    • 2,838 Posts
    • 5,971 Thanks
    phoebe1989seb
    • #5
    • 26th Apr 12, 9:38 PM
    • #5
    • 26th Apr 12, 9:38 PM
    Depending on when they bought the current owners may not have an indemnity policy anyway....we bought a house in 2007 that had a conservatory probably built some time in the late 1980s or early 1990s and no mention was made about the fact that their was a restrictive covenant in place regarding extensions/conservatories being built on the land.

    Fast forward to 2011 when we were selling and our buyers' solicitor insisted indemnity insurance was taken out in relation to this.....

    Back in 2007 I didn't even know such a thing as indemnity insurance existed.....it seems they are all the rage these days!
    Paid off mortgage early - mortgage-free since age 40 (2007)

    Over 40,000 mis-sold PPI reclaimed
    • chappers
    • By chappers 26th Apr 12, 9:48 PM
    • 2,425 Posts
    • 1,350 Thanks
    chappers
    • #6
    • 26th Apr 12, 9:48 PM
    • #6
    • 26th Apr 12, 9:48 PM
    Our solicitor has basically told us a Indemnity Policy isn't worth the paper it's written on the majority of the time,
    Originally posted by Elzibaby
    That may be true with regards to making a claim or ever needing to, but your lender may not complete without the policy in place.
  • Sammie_UK1
    • #7
    • 28th Apr 12, 11:21 AM
    • #7
    • 28th Apr 12, 11:21 AM
    Thanks for all the replies so far.. But I'm still a little confused.

    What do I need to do/find out to decide whether or not I need an Indemnity Policy?

    If I enquire with the council regarding any planning applications made for the property we're buying and if in retrieving this information they discover that no planning permission was given yet work has been done to the property, does that prevent me from gaining a VALID Indemnity Policy?..

    Gosh, this is so confusing.. I don't know where to go to for help regarding this...
    • pmlindyloo
    • By pmlindyloo 28th Apr 12, 11:48 AM
    • 9,753 Posts
    • 11,479 Thanks
    pmlindyloo
    • #8
    • 28th Apr 12, 11:48 AM
    • #8
    • 28th Apr 12, 11:48 AM
    Thanks for all the replies so far.. But I'm still a little confused.

    What do I need to do/find out to decide whether or not I need an Indemnity Policy? Your solicitor will tell you whether you need an indemnity policy. He/she will probably suggest you get one if the relevant planning permission/building regulations documents are not available. Your mortgage lender may also insist on your obtaining one.

    If I enquire with the council regarding any planning applications made for the property we're buying and if in retrieving this information they discover that no planning permission was given yet work has been done to the property, does that prevent me from gaining a VALID Indemnity Policy?.. Yes

    Gosh, this is so confusing.. I don't know where to go to for help regarding this...
    Originally posted by Sammie_UK1
    Really your solicitor should be dealing with all this - that's what you pay them for.
  • Sammie_UK1
    • #9
    • 28th Apr 12, 6:52 PM
    • #9
    • 28th Apr 12, 6:52 PM
    Should I tell my conveyancer that there has been some work done to the property but not to mention this to the council when you do your search? Surely, he should be familiar with this anyway and know not to ask anything directly about the work done to the property to allow for a vaild indemnity policy?..

    what, if anything, would make me exempt from needing an Indemnity Policy?..

    My mortgage offer came through and having read the document, they have not mentioned the need for an indemnity policy.. Is an Indemnity Policy a must have only if the mortgage company ask for it? If they don't ask for one, is it still neccessary for me to have a policy anyway?..
    • Richard Webster
    • By Richard Webster 29th Apr 12, 4:08 PM
    • 7,298 Posts
    • 6,951 Thanks
    Richard Webster
    My mortgage offer came through and having read the document, they have not mentioned the need for an indemnity policy.
    Mortgage offers do not mention loads of things but your solicitor still has to make sure that he complies with the CML Handbook requirements which set out all the detailed stuff lenders require to be checked by solicitors. If you talk to the average mortgage lender branch office person they won't have the a faintest clue what this is all about so don't try it!
    RICHARD WEBSTER

    As a retired conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability for it.
  • Sammie_UK1
    What, if anything, would make me exempt from needing an Indemnity Policy?..
    Originally posted by Sammie_UK1
    Can anyone shed any light on the above?

    Thanks,

    Sam
    • pmlindyloo
    • By pmlindyloo 30th Apr 12, 2:46 PM
    • 9,753 Posts
    • 11,479 Thanks
    pmlindyloo
    As Richard Webster says your solicitor has a duty to comply with the regulations regarding information that your mortgage lender requires.

    What does your solicitor say?

    It is not a question of being exempt from needing one, it is a question of whether your morgage lender is insisting on one.

    Just to illustrate - we bought a property which had a conservatory with no building regulations certificate.

    Because we were cash buyers and didn't need a mortgage we could make the decision as to whether we had indemnity insurance. Since the conservatory had been built yonks ago (and hadn't fallen down/leaked etc etc) and the likelihood of the council checking was practically nil then we made the decision not to buy one.

    A house we sold had a granny flat conversion (13 years old) and we couldn't find the building regulations certificate. The buyer's mortgage lender insisted that they had indemnity insurance.

    Don't ask me why mortgage lenders insist on indemnity insurance because I have no idea and I suspect they have no idea either.

    To be honest this can be easily dealt with your solicitor getting indemnity insurance - it isn't expensive when you look at the amount you are paying for the house. If you want you can ask the vendor to pay for it.

    Indemnity insurance isn't worth stressing over. Just get it!

    The more important thing is: is the building work safe and fit for purpose? (have you had a full survey done?) How long ago was it done - the longer the better.

    Hope this helps.
    Last edited by pmlindyloo; 30-04-2012 at 2:59 PM.
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