Indemnity policy Exclusion clause (Urgent)

InvalidIndemnity

Thank you very much guys for your help and support. I am pasting the content of that so called waiver document which I did sign back in June 2006 before the purchase of this flat. I have a mortgage and they are not at all worried, I don't know why they are not worried at all but they are not doing anything against the solicitor. below are the main paragraph taken from that waiver I did sign:

"With regards to the property being converted without planning permission, I understand that should the council require me to, I would have to apply for retrospective planning permission at my own cost of in the region of £500.00. There is no guarantee that the permission will be granted retrospectively, and the council may be able to order the conversion to be un-done and this is when the indemnity policy covers me for the amount for which I have paid for this property (but not any guarantee of any increase of value). I understand that this could cause a lot of inconvenience to me in those events, as the council will take action regardless of any indemnity policy. My solicitors have advised me fully about the perils of and against buying such a property and the consequences of resale value, but I wish to go ahead regardless."

Doozergirl

This is what confuses me. Your solicitor has not advised you correctly.

That document points out that enforcement action may ensue. That it is your responsibility to fight the Local Authority, fair enough. But it then states "and this is when the indemnity policy covers me for the amount for which I have paid for this property" which it does not and never did. IMO, they are negligent for advising you that there was a policy in place - there wasn't. They have bought an item which provided no cover at all.

There won't be any loopholes in the actual indemnity policy for you to wriggle through. The insurers know what they are covering you for and it makes perfect sense that they will not cover very recent work (less than 12 months).

I put the blame for the lack of policy at the feet of your solicitor. You can't claim from them the cost of the enforcement action and the battle with planning (you agreed that in the letter), but you should be looking to be indemnified against the result of that enforcement.

InvalidIndemnity

But they are claiming as I have signed this waiver that they did advise me but I bought it even after they told me

InvalidIndemnity

Thank you very much Doozergirl and DVardysShadow for your help and support.
DoozerGirl:
I know what you are saying, they were negligent that is why my solicitor has asked me to take them to court and barrister has drafted the letter for submission in county court london but my solicitor told me he hasn't got the copy of the Indemnity policy that is where I actually asked the insurer to fax me and they fax me the copy of original indemnity policy. I provided it to my solicitor and also asked him before proceeding have a look at the original indemnity policy as it is conflicting with what they said in their refusal.

DVardysShadow

The Indemnity exclusion does not apply because you did not do anything to initiate the planning matter coming to the notice of the council. But it implies very strongly that the rest of the policy makes it clear that it is in respect of works over 12 months old at the time of taking out the policy. So the Insurer are off the hook here, I would be almost certain. But you should check for another exclusion for works less than 12 months old at inception and also for a statement of what is actually insured. You may find that poor drafting has not actually excluded your situation - but don't hang your hopes on that.

Otherwise, you are relying on the waiver being poorly drafted. Was this provided by your solicitor? And the insurance too? It looks like he believed it covered you, so you are now down to his professional negligence insurance. If you contact him, you may get a funny letter stating that he will have nothing more to do with you and he cannot help you. This si not alegal admission, but if you get that, you will know that he has consulted his Insurer and they have instructed him to have no further contact because they believe you may have a case ....

DVardysShadow

InvalidIndemnity wrote: »

But they are claiming as I have signed this waiver that they did advise me but I bought it even after they told me

You are likely to get the funny letter from them soon. As I read it, in the waiver, they advised you that you were at risk of a PCN, and your only protection was the Indemnity Insurance.

Now if the Indemnity Insurance does not cover the works because they were too new, then I would say that the solicitor has been negligent because his waiver suggests that the insurance does cover you. OR on a correct reading of the whole policy you are in fact covered and the 'alerting the council' exclusion clause contains random text about 12 months whereas the policy as a whole is not limited to works older than 12 months.

Doozergirl

InvalidIndemnity wrote: »

Thank you very much Doozergirl and DVardysShadow for your help and support.
DoozerGirl:
I know what you are saying, they were negligent that is why my solicitor has asked me to take them to court and barrister has drafted the letter for submission in county court london but my solicitor told me he hasn't got the copy of the Indemnity policy that is where I actually asked the insurer to fax me and they fax me the copy of original indemnity policy. I provided it to my solicitor and also asked him before proceeding have a look at the original indemnity policy as it is conflicting with what they said in their refusal.

If that is the exclusion they quoted, then they have quoted the wrong thing. But I thought the exclusion is what you've picked out, not an exclusion that they quoted?

The policy does not cover any work carried out less than 12 months before the policy was purchased and some work carried longer ago. It doesn't matter what the additional exclusions are.

You're not grasping the English contained in that exclusion. It means nothing to your case.

I edited my post above to explain why your solicitor is in fact negligent and it actually sounds (now) like your own solicitor is well on to it.

Richard_Webster

1. One of the major questions that should have been asked before OP bought was when the works were carried out. Did OP's solicitor ask this and what was the reply?

2. As Doozergirl has already suggested there must be a clause somewhere that says that says that nothing is covered if it is less than 12 months old and then works over 12 months old will not be covered if the Council is contacted about alterations or extensions to them.

3. As with all insurances you notify your insurer as soon as you catch wind of any potential claim so they can defend any enforcement action etc. So even if the policy was valid OP left it too late here. Did the solicitors advise OP that he should notify the insurers as soon as he became aware some action was contemplated by the Council?

4. The major issue from the Council's viewpoint here is the change of use rather than the works themselves and many Planning Indemnity Policies only deal with works rather than changes of use. OP needs to check the wording to see whether a change of use is covered. If it isn't then he may have a case against his previous solicitors for wrongly advising him. Also arguably a change of use to 2 flats only occurs when the second one is first separately occupied.

5. Back to my point 1, given the circumstances the solicitors should have asked for some independent evidence of the age of the work and if this was equivocal, then they should have further advised OP that the policy would only be valid if the work could be shown to be at least 12 months old and he would have to take the risk that the policy might not be valid. If the solicitor knew that the work was less than 12 months old then he was clearly negligent in advising OP in the way he did. OP might not have known about the 12 month cut off but the solicitor should have done.

So I think there may be two or three issues where the original solicitor was negligent. However they will probably argue that there is a substantial likelihood that OP would have gone ahead even if he had been advised of these further risks.

On the other hand the solicitors laid it fairly thickly in their disclaimer clause and pointed out the risks and hassle involved so OP must have been pretty thick skinned not have understood the clear warning behind the wording which was "Don't buy this flat..."

DVardysShadow

Doozergirl wrote: »

If that is the exclusion they quoted, then they have quoted the wrong thing. But I thought the exclusion is what you've picked out, not an exclusion that they quoted?

The policy does not cover any work carried out less than 12 months before the policy was purchased and some work carried longer ago. It doesn't matter what the additional exclusions are.

You're not grasping the English contained in that exclusion. It means nothing to your case.

I edited my post above to explain why your solicitor is in fact negligent and it actually sounds (now) like your own solicitor is well on to it.

Doozer, I agree with

• Indemnity is unlikely to cover works newer than 12 months at inception, because building control may still inspect
• The quoted exclusion clause is not relevant
• OP is probably not reading the policy in context
• There is likely to be another clause [not necessarily an exclusion clause] which [effectively] excludes works newer than 12 months
• Original solicitor appears to have been negligent in offering the policy, as evidenced by the waiver admitting the Indemnity policy as the remedy

The only question in my mind is whether the Policy could actually protect works newer than 12 months at inception. You seem quite convinced it would not. What am I missing here?

Doozergirl

DVardysShadow wrote: »

Doozer, I agree with

• Indemnity is unlikely to cover works newer than 12 months at inception, because building control may still inspect
• The quoted exclusion clause is not relevant
• OP is probably not reading the policy in context
• There is likely to be another clause [not necessarily an exclusion clause] which [effectively] excludes works newer than 12 months
• Original solicitor appears to have been negligent in offering the policy, as evidenced by the waiver admitting the Indemnity policy as the remedy

The only question in my mind is whether the Policy could actually protect works newer than 12 months at inception. You seem quite convinced it would not. What am I missing here?

You're right. I presumed it at the beginning and then the OP quotes the underwriter giving it as their reason for the cover not being provided. I haven't seen the policy wording for what is covered, but having worked for an insurer and knowing that they simple will not cover a blatant new risk, plus the fact that Building Control in particular lose their teeth at 12 months, I have taken it as gospel which I perhaps shouldn't have.

But I'd put money on it.