Building Indemnity Insurance

leap31

Hello,
I am hoping that someone can point me in the right direction please!? We are buying a house where a garage has been converted into a study without the necessary building regulations sign off. We are still awaiting the results of a survey, but we have been advised to purchase 'Building Indemnity Insurance' - does anyone know what this covers and where exactly I can purchase it from?
Thank you in advance

Leory

Are you paying for this? I wouldnt pay as it was the sellers responsibility to ensure that any work had building regs approval. they didnt so i would expect them to take the remedial action.

The cover is to cover you against losses incurred if the council demand that it is taken down due to the lack of regs.

Another factor could be how long ago was the garage converted?

vet8

Every house sale these days seems to advise someone to take out Indemnity Insurance for something. I am convinced these are just a money making rip off. If the garage conversion was done before Building Regs. came in it would not need them. It may have been done by the previous owners, the ones before the current ones and they did not hand over the regs. stuff.

Surely as long as the survey says the building will not fall down soon there is no problem. I believe I am right in saying that if the council have not acted within 4 years of the work they can do nothing, so find out when it was done and then say "No I am not paying for that". I know people who have refused to pay and suddenly the problem goes away. As I said it is a new way for insurance companies and (possibly solicitors) to make money.

I must also say that as the vendor I would not pay. If the buyer wants the house the problem is theirs, if anything happens once they own it, it is up to them.

timmyt

vet8 wrote: »

Every house sale these days seems to advise someone to take out Indemnity Insurance for something. I am convinced these are just a money making rip off. If the garage conversion was done before Building Regs. came in it would not need them. It may have been done by the previous owners, the ones before the current ones and they did not hand over the regs. stuff.

Surely as long as the survey says the building will not fall down soon there is no problem. I believe I am right in saying that if the council have not acted within 4 years of the work they can do nothing, so find out when it was done and then say "No I am not paying for that". I know people who have refused to pay and suddenly the problem goes away. As I said it is a new way for insurance companies and (possibly solicitors) to make money.

I must also say that as the vendor I would not pay. If the buyer wants the house the problem is theirs, if anything happens once they own it, it is up to them.

take it seriously OP, and ignore this advice.

That said if the works are over 12 months then Council cannot take action unless danger to heatlth and safety.

how diff would it be to reinstate...otherwise cheap £40 insurance - and no solicitor makes anything from it.

yes seller pays.

Richard_Webster

A lot of the problem with Building Regulation Indemnity Policies is that mortgage lenders take a very blinkered view about these things. They set out a load of rules about what solicitors are supposed to check and if you ask them a question you do not get to talk to a lawyer in their office with whom you can have a sensible conversation. So generally we don't consult them because we rarely get really sensible answers.

Many lenders requires us to check Building reg points back forever because in theory the Council could seek an injunction in the County Court to have the work undone. The Cottingham case in 2000 turned on the theoretical possibility of such action and nobody bothered to point out to the judge that no local authority would ever take action in respect of work more than a couple of years ago unless it was obviously and evidently unsafe or a public building etc. If it did then I think the national press would have a field day!

What is so stupid is that we have to check for the possibility of contraventions in respect of modern work but lenders quite happily lend on older properties which have features in them that would be nowhere near acceptable if built now.

The Building Reg policies are mainly taken out to keep the lenders happy so the buyer's solicitors can say (if challenged by lender later) that they did all they could. Obviously there will be a few buyers out there who will be neurotically worried about the remote possibility of enforcement action, but most people will use their common sense.

Insurance companies provide them in order to provide a full range of products but I remember somebody at Norwich Union (now Aviva) saying they were a pain because they (NU) wasted a lot of time dealing with enquiries from property owners who wanted to make a claim because there had been some damage caused by substandard construction, something which the policies don't cover. Solicitors do not get any commission for arranging them.

vet8

At last a sensible post about indemnity insurance and from someone in the know.

It alarms me that, every day someone posts on here saying that they have been told to take out these insurances, I would like to know if any of them have ever paid out. As Richard Webster says it is common sense, the council is really unlikely to take enforcement action.

The reason I wondered if solicitors make money from them is that there is a certain solicitor around here who is notorious for always insisting on a whole sheaf of indemnity insurances whenever he deals with a house sale. I just assumed he made money from them.

A friend of mine bought a house with no problems, when he came to sell it 2 years later, he suddenly was told he had to take out about 4 different indemnity insurance policies for all sorts of things. Once one was settled the solicitor found another problem which needed another policy and so on. He refused to pay for the majority of them and the solicitor eventually just accepted that. Because of these problems the house sale took 6 months, which really hacked him off as they wanted to move as his OH was pregnant and by the time they finally moved the baby was nearly walking.

House selling and buying is long winded, expensive and stressful. I just think that things like this make it even worse, but actually contribute nothing useful to the process.

timmyt

vet8 wrote: »

At last a sensible post about indemnity insurance and from someone in the know.

It alarms me that, every day someone posts on here saying that they have been told to take out these insurances, I would like to know if any of them have ever paid out. As Richard Webster says it is common sense, the council is really unlikely to take enforcement action.

The reason I wondered if solicitors make money from them is that there is a certain solicitor around here who is notorious for always insisting on a whole sheaf of indemnity insurances whenever he deals with a house sale. I just assumed he made money from them.

A friend of mine bought a house with no problems, when he came to sell it 2 years later, he suddenly was told he had to take out about 4 different indemnity insurance policies for all sorts of things. Once one was settled the solicitor found another problem which needed another policy and so on. He refused to pay for the majority of them and the solicitor eventually just accepted that. Because of these problems the house sale took 6 months, which really hacked him off as they wanted to move as his OH was pregnant and by the time they finally moved the baby was nearly walking.

House selling and buying is long winded, expensive and stressful. I just think that things like this make it even worse, but actually contribute nothing useful to the process.

thank goodness for them, they make the process fast, as they offer an instant solution.

that said, they derived to help the online conveyancers who got stuck at the simpliest of issue...insurance bailed them out.

leap31

Thank you for your responses, it has clarified and confirmed our thoughts!! It justs seems to be one thing after the other at the moment.

Vet 8 - I was pregnant when we started to market our house, and our baby is now 6 months too!! It's just driving me crazy!!!