Indemnity Insurance Question

captaincrueso

Hey guys,

I'm new to the forum.. Great stuff here about house buying.. hope someone can answer my question...

We're close to exchanging contracts on the house we want to buy.. however, the (I'm now finding out very common :think:) problem of lack of building regulation certificate has come up on an extension for the house (over 4 years old, so not at risk of action from the council). Basically the problem is that the vendor never got a final inspection of the extension when completed (although they did get the plans approved I believe). There is no planning permission issue here, (I'm told it wasn't required as it's a 1st floor extension) just the lack of building regs.. Also there's a question about the recent wiring (lost certificate).

From what I've read, the vendor buying indemnity insurance would be the easiest & quickest solution.. HOWEVER, my big question is: I keep reading that the main rule for getting accepted for indemnity insurance is that the council must not have been notified of the issue - In my case, as the vendor did submit plans for the extension (I think about 5 years ago) but never got in touch again to say they actually carried out the work, can they still get indemnity insurance? or is their only option to get the final inspection done? Can anyone help?:huh:

Also a quick follow up - Obviously the indemnity insurance issue has us thinking about when we sell the property on.. Theoretically the indemnity would then simply be passed to the new buyer - but has anyone had any experience of selling property with an indemnity insurance attached? Does it put potential buyers off??

Look forward to hearing from you..

Cheers,

CaptainC

maria6259

I am not sure about building regs for an extension already built, and I dont know where you've got the 4 year rule from.

I can only suggest you ring your local council and ask them about it.

Regarding the wiring, you could ask an electrician to go and look and give an opinion. Also I dont think indemnity insurance can be passed on, the vendor would have to take out another.

Good luck

Richard_Webster

I can only suggest you ring your local council and ask them about it.

Don't mention the address of the property if you do!

Mostly extensions that are 4+ yaers old to a house are immune from planning enforcement - but in a few cases (if built in breach of an express planning condition then the limit is 10 years).

Unlike Planning Law where there are legal limitation periods (4/10 years) there is no limitation period for enforcement in respect of Building Regulation breaches, but from a practical point of view the likelihood of enforcement in respect of an apparently normal domestic extension after 4 yaers is very tiny indeed. An indemnity policy protects against this very small risk but NOT against the risk of structural failure. merely submitting plans for approval would not in itself disqualify from obtaining such a policy.

When you come to sell it is a matter for the buyer as to how neurotic he is about the point. Some buyers do worry about this but den't worry about the risk of structural failure of say the main structure of a 100 year old house which may well have been built to far lower standards

The main benefit of a Building Regulation Policy is to avoid solicitors wasting a lot of time patiently explaining to a lender that such a policy is waste of time. It is just easier to get a policy and then wave it at the lender if they ask. Unfortunately lenders are still taking quite an unrealistic view about how far we have to go in checking old building regulation issues.

captaincrueso

Thanks for the advice Richard. Will let you know how it pans out.

One other question - Will having an extension also affect the cost of my standard buildings insurance? Are they likely to ask about building regs too?

Regards,


CC

Richard_Webster

Woudn't normally expect the fact of an extension as such to affect the cost of buildings insurance although it might make the rebuild cost higher and therefore the insurance cost higher from that point of view. If you are using a company that gives unlimited cover they will only want to know how many bedrooms and postcode.