What does indemnity insurance cover?

mrsukyankee

The house we are attempting to buy did not get planning permission or building regs on an extension or loft conversion. They said it was built 10 years ago but have not produced anything to prove that it was built then. They have gotten it regularized since accepting our offer, but we're worried about the lack of planning permission and lack of any proof that it was built 10 years prior. Indemnity insurance was brought up...but what does that cover? Because I'd hate to buy a property, have the planning office force us to put it back to the original state and then have to pay to get a new extension and loft conversion...way too much money out of our pocket just because these owners didn't do what they were meant to.

Any thoughts?

planemad

The solicitors will sort out the indemnity insurance and make sure you are covered for most eventualities.

The basic gist of the policy is to cover you the buyer from any liability claims that can arise in the future its a very common term when purchasing a property I had to buy my last buyer an indemnity policy to cover them for the fitting of the windows.

The flat was leasehold and I applied to the council who owned the freehold to ask if I could put in double glazing and they said yes in writing but I lost the letter so I had to get a policy to cover my buyers from any future liability in case the council turn around and said that we never gave you permission to put them in. [SIZE=-1]
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Richard_Webster

OP needs to be clear about whether the issue is Planning or Building Regulations - they are not the same. The rules are different. Most loft conversions don't need planning permission unless there are external changes to the building, but would certainly need to comply with the Building Regulations. An extension might be permitted development not requiring Planning Permission if it did not exceed a certain size and complied with other conditions.

They have gotten it regularized since accepting our offer

What does this mean? You can apply for a regularisation certificate under Building Regulations but if this was done and a certificate produced covering all the works then that would deal with this issue completely as far as Building Regulations are concerned, but if the works did not meet the standards, by making the application the sellers prevent themselves obtaining any Building Regulation Indemnity Insurance.

If OP can explain in more detail what has/has not been obtained etc then maybe I can try to see what more can be done and explain the usefulness or otherwise of indemnity policies if they are available.