Buildings Regulations indemnity insurance

crazydiamond22

I am currently selling a house and at the last minute before exchange our purchasers have just mentioned that they want building regulations for 2 extensions completed in 1970 and 1980. The council has told me this takes about 2 weeks.
My solicitor has advised me to get building regulations indemnity insurance at a cost of £150 rather than to delay matters by going through the council.
We bought the property 2 years ago through the same solicitor that we are now using to sell it so I was wondering whether my solicitor should be liable to pay for this insurance as they obviously didn’t sort it out on our purchase.
I really don’t want to delay exchange so would it be best to pay it and then try to claim the money back through the Law Societies complaints procedure? I would appreciate any advice on this.
Thanks

Debt_Free_Chick

crazydiamond22 wrote:

We bought the property 2 years ago through the same solicitor that we are now using to sell it so I was wondering whether my solicitor should be liable to pay for this

This hadn't ever used to be a problem - it seems to be an issue that has cropped up over the past couple of years. (I bought four years ago and the issue PP/Buildings Regs for an existing extension was never mentioned).

You could try and get the solicitor to pay, on the basis you've outlined. But if they do, it will be a "gesture of goodwill" as I very much doubt that they have any contractual liability.

Might be worth a try though ....

silvercar

Indemnity for work completed that long ago? There is no way the council can oblige you to change anything now. AFAIK 4 years is the max time between the wrok being done and the council able to force you to comply with anything. I would be inclined to refuse, if the buyers really want it let them pay for it.

crazydiamond22

Thanks for the advice.

I think the guarantee is really for the purchasers solicitor rather than our purcahser - there was a case in the past where a solicitor had to pay out a lot of money so they tend to want to cover their backs now.

I have decided to pay the money as it isn't worth our sale and purchase falling through over £150. I may though try to get the money back from the solicitor after completion especially as I have been unhappy about several things in relation to their dealings with me.

danm

silvercar wrote:

Indemnity for work completed that long ago? There is no way the council can oblige you to change anything now. AFAIK 4 years is the max time between the wrok being done and the council able to force you to comply with anything. I would be inclined to refuse, if the buyers really want it let them pay for it.

Not an expert, but potentially facing similar problem myself.

4 years is the definately the max time for planning permission. Not sure if the same limit applies to Building Reg's which is a totally different kettle of fish

RiskAdverse100

Building Regulations Indemnity Insurance for work carried out this long ago is utterly pointless and a complete waste of money.

Oh, and if you have already contacted the Council about getting retrospective approval for the works then you cannot take out indemnity insurance.

If a local authority want to take action under the 1984 Building Act because work has been carried out without building regulations approval then they only have one year to do so from completion of the works.

They could take action under other legislation if more than a year has passed although this would only be because the work was so poorly done that the building constituted a dangerous structure etc.

You must not agree to pay this money but instead get your solicitor to argue with the buyer's solicitor that indemnity insurance is a waste of time.

If your solicitor is advising you to pay the money then you should make it clear that you expect him to deduct it from his bill.

You could always put him on the spot and ask what the risk is that this kind of insurance is supposed to cover. When he can't answer you can tell him:

..the Underwriters will indemnify the Insured up to the Limit of Indemnity in respect of any loss damages costs and expenses which the Insured may sustain suffer or incur during the Period of Insurance in complying with any enforcement notice or injunctive proceedings served on the Insured by the appropriate Building Control Authority being directly attibutable to the Lack of valid Building Regulations Consent in respect of any works carried out upon the Property provided that such work was fully completed at least twelve months prior to the Date of Commencement

This is a direct quote from a policy.

So the insurers first require that the work must have been completed over a year ago which means that it won't cover action taken by the local authority within a year of completion of the works under the Building Act. This means that the policy is only useful if the local authority serve an enforcement notice or take out an injunction which they are only going to do if the building works have been done really badly.

And, Mr Solicitor, the chances of the local authority serving an enforcement notice for works carried out to this property at least 26 years ago are what exactly?

If the professionals people employ to buy and sell properties are as ignorant of the law as this then we are all doomed!

RiskAdverse100

mrsc_4

We went though a very simular thing with the property we brought, work was carried out in 1979 and 1980 and our Vendor paid for an indemnity insurance to be honest we only wanted it in case we ever sell and then the property is still covered despite the work being done 27 years ago, if it had come to it we would have paid for it to save our sale and purchase from falling though.

RiskAdverse100

But covered against what?

I think these policies should be renamed 'Ignorant Solicitor Indemnity Insurance' as it seems that they are only taken out to stop solicitors raising ridiculous building regulations questions!

RiskAdverse100

cerbera

Hi, after reading the above - I'm wondering if we are further up your chain ! Its come to light in the past few days about this problem and we were supposed to exchange yesterday and move Friday !! We are in the Bedfordshire area.. !! It's driving us crazy !!

chant1l

Interestingly I have just paid out for the very same thing, and the link below us has stalled over a £45 extra fee.
My gut reaction is to pay it and move forward, why risk a sale over such a small amount?

rscds4us

I have just tried some of the big insurance companies for Buildings Regulations indemnity insurance and got a sorry we do not offer this cover. Can anyone post a few names of those who do ? thanks