Indemnity Insurance - Building reg

sonia7860

I need help. I am buying a house and my solicitor’s have asked me to take out indemnity insurance because the seller dont have building reg certificate for removing the wall between kitchen and dinner. The seller also converted the shed on side into utility room.

1) - I don’t mind taking out the insurance (obviously) at seller’s expense but I am thinking there is no point taking it out as I am looking to move kitchen into utility room and use kitchen/dinner as living space. So I get the entire work certificated at once. But not sure if I need to obtain building reg certificate for work done before then I can go ahead and do next bit or I can get done everything in once.

Can some one explain to me how this works?

above is not something I am looking to do straight away so I am thinking at least it will cover me till I start the work and its not expensive.

2) - However my solicitor also suggested that I can insist the seller to get local authority in and obtain the certificate which will mean I can not take out insurance, if they do.

So I am stuck. I am also thinking if i insist that they get local authority in and try to obtain the certificate . if the certificate is not obtained and there are remedy work required at least I know what I am getting myself into.

But the guy who is selling the house may not agree to do the work cos he want to sell the house as it was his mother who just passed away so he just wants to pocket the money and share with his siblings. So i am thinking there maybe a room for negotiating the price I am not sure how this will go down with lender as i am getting mortgage?

On other hand just make the process easier for seller and tell them to get me insurance and compensate me as price reduction for risk I am taking.

My worse night mare is negotiating as i am really crap at it i really dont know how much of vaule comes down as there is no building reg certi? i think when negotiating the price at place i rushed in cos i really wanted the house.

Can some one please advice me? I am 1st time buyer.

All this thinking is making my head hurt. I am so close to exchange. It will be shame that I will lose out on all the money I paid out for mortgage fees and etc.

Cannon_Fodder

Your lender will want you to get the indemnity insurance. To protect them from the possibility, however slight, that someone enforces the regs and in doing so reduces the value of the property - damaging their collateral.

So, get the indemnity.

Then when you decide to do your own work to the place, get your own regs/permissions properly.

The indemnity should cover the risk you are taking. If the seller pays for it, that is the penalty they suffer. You can try haggling, but on its own that factor won't carry a huge amount of weight.

Bananamana

To add to what CVannon Fodder has rightly said,

the most important additional point is to make sure you confirm the current works are structually sound before proceeding to buy. If not then there is a much bigger concern. If they are then the cost of indemnity is around £50 so I think you'll be fine negotiating.

blackshirtuk

ok as above
1st make sure it is safe!
2nd get an indemnity to satisfy lender
3rd when you do your works get council approval for your works, if at that point they question previous works, (doubtful) point them in the direction of indemnity insurer.

tbs624

What you do need to be aware of though is that the indemnity insurance only provides cover against action by the Council. It offers nothing if the work is shoddy and has caused structural problems.

Have you had a survey done ( not just a valuation) and if yes, what were the surveyor's comments?

Doozergirl

You realise that something which previously lived life as a shed has virtually no hope of meeting regs? Unless there is an outside door (a thermal block) between the existing kitchen and utility in which case it would probably only be the electrics that needed to pass as it would still be classed as an outbuilding of sorts.

You'll be building a new extension if that's where you want to put the kitchen.

sonia7860

Thank you all for replying.

I hope council approval is as easy as it sounds.

Blackshirtuk: will it be possible to point them to indemnity insurance if they notice the previous work? i dont think there are many cases where council order to reinstate the house in its original condition, i am sure they might ask me to correct defects in the workmenship, which is not covered by the insurance.

TBS624: I did get homebuyer survey and it says that the property is whole as considered to be reasonable proposition for purchase price of 157k. There is no evidence of any significant problems, and no special difficulties arising on re-sale in normal market condition are foreseen (this is just summery). Only concern highlighted was electricity I had independent electricians to check and he gave me the report on what is dangerous and need urgent work so I handed that to my solicitors and buyer agree to do the work.

The seller is also saying the workwas done in 2004 so did they still needed approval at the point?

Doozergirl: it was brick shed on side of the house just say left (when you come out of kitchen to a bit of space then door to sheds), they remove the wall and put a door between them (kitchen and shed) to make it utility room hope this makes sense. My sister lives on same road and her neighbour had converted their sheds into kitchen so that’s why I thinking shouldn’t be problem.

I am not building a new extension I just want to move kitchen into utility room and use kitchen and dinner as living room.

I also forget to point out the house have main wall cavity and survey report says there is no evidence pf significant structural movement and there is no evidence of dampness internally.


Can you pelase tell me what you would you do if you were in my situation apart from getting the insurance and check if it is safe?
after making sure it is 100% safe i should go ahead with purchase as normal at price agreed? its been over 4yrs since this work was done!

Bananamana

the enforcement period is only 1 year anyway, subject to a few exceptions - the biggest being the work is unsafe.

You need to rely on your own survey and inspection.