Do I need new indemnity insurance ?

Willis347

When I bought my current house the previous owner had rebuilt a small lean-to with a flat roof to increase headroom. No planning or building regs were in place so an indemnity policy was put in place to allow the sale to go through. 5yrs down the line I am selling and the buyers solicitors are asking for building regs /completion certs . My question is do I also have to get a new indemnity insurance in place or is the previous one still valid and transferable ?

DVardysShadow

timmyt wrote: »

indemnity is a one off payment and covers your buyers...if the buyers will accept it. some want local authority to say the house is sound - tell them to get their surveyor to do that...though they may make you pay for a specialist structural surveyor to come in and examine...as your house has the issue that they were not told about when they put their offer in.

down to negotiation, but most will indeed accept indemnity

My call centre conveyancer tells me that once the local authority has been approached, indemnity insurance is not valid and no longer available.

AlexSnow

You need to check the details of the policy you currently have. The majority of them are transferable however you may need to pay a small additional premium to increase the limit of indemnity if the value of your house has increased (again some policies have an escalator clause in them which could mean the policy is fine as it is).

First thing to do is to ensure your solicitor has a copy of the policy you have and get them to pass it onto the other party. DO NOT CONTACT THE COUNCIL! It could invalidate the policy.

wackorash84

DVardysShadow wrote: »

My call centre conveyancer tells me that once the local authority has been approached, indemnity insurance is not valid and no longer available.

100% correct.

In similar situation, but we are buying.
Conveyancer advised that the moment someone (buyer/seller) approaches the local authority, the indemnity insurance becomes invalid and no longer available.

Willis347 wrote:

My question is do I also have to get a new indemnity insurance in place or is the previous one still valid and transferable ?

Suggest to speak to your solicitor/convenyancer. However, in general see explanation below:-

An Indemnity Policy is like an Insurance Policy with a one-off premium. They can be obtained for a number of things but the two most common ones are Buildings Regulation Consent Indemnity Policy and Planning Consent Indemnity Policy. These are usually provided where a Seller has not obtained the relevant consent but they are no substitute for the consent as there is no evidence that the works that the Seller did not obtain consent for have been done properly and you should ensure that your Surveyor gives you his opinion that the works are structurally sound. The policy covers the position if the Local Authority ask you to put the property back to its original condition. The indemnity policies are transferable to your Buyer in the future but you may be expected to top them up to provide cover up to the level of increase in value of the property.

Willis347

Thanks all that's very helpful and reassuring hopefully not looking at major delay or forking out to resolve things .