Building Regs indemnity insurance

noo66

I know there are a number of threads related to this type of indemnity insurance, but couldn't find one to quite answer my question.

Had the mortgage valuation back on a house I'm byuing, and it states that a wall has been removed between the lounge and dining room, and the report says that it assumes all local authority requirements have been complied with. The wall was removed 35 years ago, long before the present owners bought the property, and they have no buildings regs certs. I do not intend to dig around at the council to find out, as I do not want to alert them, so was going to arrange indemnity insurance.

The valuation confirmation from the mortgage lender simply says that it is acceptable for them to proceed with processing our mortgage- no conditions, no mentions of needing to provide building regs certs/ indemnity insurance.
Does that mean they're not bothered? Or will they suddenly request something at the last minute? The mortgage offer is all signed, sealed and delivered, again with no conditions related to the valuation.

Hope someone can clarify!

Richard_Webster

Mortgage offers are always subject to solicitors certifying that a great list of things including building regulations are OK, so in extreme cases if they are not OK, then the mortgage offer cannot be used.

Lenders don't seem to understand the real world about these points so it is common for buyer's solicitors to require a building regulation indemnity policy which will pay out if there is enforcement by the Council, but not if there is some structural failure because of a breach of the regs.

noo66

Thanks for that Richard. I'll speak to my solicitor and get him to sort out the indemnity insurance- don't want to leave anything to chance.

tek-monkey

Pretty much what I've found, they just want to cover their back. Physical problems should have been spotted in the survey, you're not protected anyway unless its a new build with warranty. The indemnity just means if the council come knocking demanding changes are made, they don't lose out in any way if the house is rendered useless as a result. The building insurance is their for actual problems, I assume this increases if an indemnity is in place?

lucyloves

I would phone the Building Control department at the council and see if you can find a certificate. However, as the building works were carried out 35years ago, and the Building regulations didn't come into effect until 1984 they might not have anything!

DVardysShadow

lucyloves wrote: »

I would phone the Building Control department at the council and see if you can find a certificate. However, as the building works were carried out 35years ago, and the Building regulations didn't come into effect until 1984 they might not have anything!

Well meant, but very bad advice for anyone contemplating getting indemnity insurance. Once you do this, you render any indemnity insurance you have invalid and you can no longer take it out.

tek-monkey

Actually this is incorrect, as I have recently found out. Indemnity policies can be obtained when the bodies in question have been contacted, but you cannot simply use an off the shelf package. Both Severn Trent and Staffordshire Council know about the lack of regs for the place I am buying, or rather the fact that they don't have a copy due to the buildings age, yet an insurer (whatever Norwich Union are called nowadays, aviva?) was still happy to put a policy in place to protect my lender. I also contacted a firm myself, who after hearing the details said they could provide some cover.

However, it is MUCH easier to get if nobody knows. Also the vendor should be paying, so if you are buying its their problem.

Richard_Webster

Actually this is incorrect, as I have recently found out. Indemnity policies can be obtained when the bodies in question have been contacted, but you cannot simply use an off the shelf package. Both Severn Trent and Staffordshire Council know about the lack of regs for the place I am buying, or rather the fact that they don't have a copy due to the buildings age, yet an insurer (whatever Norwich Union are called nowadays, aviva?) was still happy to put a policy in place to protect my lender. I also contacted a firm myself, who after hearing the details said they could provide some cover.

However, it is MUCH easier to get if nobody knows. Also the vendor should be paying, so if you are buying its their problem.

That's fair enough, but whether they will do a bespoke policy will depend on all the details so it is safer for the advice to be not to contact them!

tek-monkey

Oh god yes! After the trouble I've had, take the easy way out. Seems insane that you are better off burying your head in the sand than actually tackling these things, but if I was in the same situation again I'd just shut up and accept the policy offered.

m_13

We bought a terraced house that had the wall removed between the two reception rooms and the former lounge and the hall. It was nearly open plan apart from the kitchen at the back.

When we bought it we had to do nothing but when we sold it we had to pay for an indemnity and a structural surveyor to come out and take off a bit of the plaster boxing in to show that there was a suitable steel there.

Cost us quite a lot of money in the end but worth it to move! One neighbour ran a newsagent and was up at 4.00 am each morning making breakfast and shouting at the dogs. You'd just get back to sleep and the people on the other side got up and the poor children were shouted at for an hour until they left for school!

The property we bought at auction has no NHBC or similar warranty despite being only 4 years old. NHBC did some of the inspections but then the builders went bust and the people who finished it off didn't bother. We tried to get an indemnity policy for this but the only policies available would cover our lender not us and we don't have a lender! It did have all of the building regulations and council inspections done and we had the electrics and high pressure water checked.

tyllwyd

I've bought (and sold) several houses with walls that have been knocked through a long time in the past, and I don't recall building regulations ever being an issue. I may be being totally naive but if the surveyor is happy and hasn't raised any issues with the mortgage lender, I'd have expected that they will just lend the money with no questions asked.