Building Regs Problem

Mrs_Arkwright

Doozergirl wrote:

Apart from the fact that an indemnity policy is useless after 15 years as the LA can't persue you, an indemnity policy is invalid if you contact the LA on the issue.

Does this mean that if the work has been done a long time ago, there is no use in the seller getting an indemnity policy? Because if the LA can't come after you after such a time, what other use does it have? We are currently in a similar position, sold our house which has an extension built before we bought it, over ten years ago - solicitor is saying we need an indemnity so that the LA can't make us tear it down, but that makes no sense to me if they can't anyway due to timescales? I'm confused.

pigeonpie

We've just bought a flat with similar issues except that the work was finished in 2001. There is apparently a 4 yr rule where the council can come at you, but after that it's only if it's a safety issue. Our solicitor acted for both us and the lender and was happy with a buildings indemnity insurance. She said it was pretty common that the buildings inspectors don't sign off and we've had to take her at her word. Even if it's 15 yrs ago, if the vendor's offering an indemnity insurance imo go for it for peace of mind's sake.

Richard_Webster

As you are at the coalface, do you see particular resell issues with this? We don't require a mortgage so not an issue for us, but would we have a problem with a future buyer and their lender?

It will depend a bit on what a surveyor says and the nature of the issue. If you haven't spoken to the Council you can always get a Building Regulation Indemnity Policy and this seems to work wonders...(As you have seen it only protects aginst enforcement, but no guarantee about the quality of the work...)

I will go back to the facts of the first post.The implication seems to be that the LA will supply a letter saying they checked some of it and that was OK but there was no final inspection etc. Also the implication seems to be that the LA wouldn't do anything about it now.

From what they have told me (and you will understand I always have to be careful not to commit myself on this kind of thing), I would be happy on that basis from a lender's point of view.

You need to understand that the lenders don't get into this level of detail usually. They simply require us to confirm that all the requirements of the CML Lenders' handbook have met for that particular property. So most of the time we don't actually write letters about this level of detail.

VERY occasionally a surveyor may make a comment on some building work and the lender will impose a specific condition requiring our specific comment on it but this is unusual.

Slightly less unusual is the situation where a neurotic solicitor feels he has to explain it all to the lender. This can be a disaster because usually the lender overreacts - and as they do not have staff who understand the points involved - we can end up with some silly requirement that cannot be met in practice. Fortunately most solicitors don't go there. If you get the letter from Building Control as mentioned in the first post then that should be sufficient.

The last possible problem is the neurotic buyer. Most people use their common sense, and if their surveyor's approach is to say that he can't see any real problems but he makes the point that he cannot be certain all the standards have bene complied with (because he couldn't remove plaster etc) that is usually the best you can get. I have had clients who have had this kind of reaction from their surveyor but have held on like a dog with a bone to the point that there is no evidence of compliance with the building regs. I have known them to refuse to hear me when I point out that there is no evidence the rest of the house complies with modern standards either... So there will be some like that, but fortunately they are a small minority.

All in all I don't think this is a big deal and there are lots of people in this kind of situation so I don't think it should make much difference. As a solicitor I simply have explain all this kind of stuff in my pre contract reports.

As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients.

Debt_Free_Chick

forevergrey wrote:

Thank you everyone for replies to date.

Debt_Free_Chick.. your comment '...provided the lender is satisfied' is the point I'm trying to nail down. Would the lender of a prospective future buyer refuse to offer a mortgage in these circumstances?

Outside my understanding, I'm afraid.

For what it's worth, I think it depends on the LTV. If the buyer wanted a 100% mortgage, then possibly the lender would be nervous (though I'm not sure why!). If the buyer wanted an 80% mortgage, then there is less chance that the lender would be nervous.

Remember that the lender is only concerned about having the mortgage repaid if the buyer defaults. Any lack of paperwork might affect the resale value if the property had to be repossessed - but then there is the question of "by how much?". Which is why the lower the LTV the less likely it is that the lender will be difficult.

HTH

cat79_2

In terms of planning, work that was carried out more than 4years ago without consent (if it had been required) while not lawful development, the local authority cannot take enforcement action against you. If the building is listed there is no time limit and we can ask you to either reinstate the building to its previous state and/or request an application for planning permission/listed building consent. In terms of building regs, I am not sure though I do know that this is a major issue when coming to sell a house without the docs to verify the work. Usually if a warrant was granted and work carried out but no completion ceritficate issues you can request for a building standards surveyor to come and have a look and if the work meets the standards a letter of comfort can be issued, that WAS the case though in scotland the regs have recently been changed and I am not a building standards surveyor so not really able to add much more to this. Though the work cannot be assessed on the regs today (if that was the case hundreds of thousands of extensions etc would not be up to scratch). I am not sure what happens if the council consider the work that was carried out to be substandard obviously they cant issue a letter of comfort, it may then be a case of keep it up at your own risk.

silvercar

building regs certificates can only be issued against standards that are in force at the time of issue. If you have work done and a final certificate hasn't been issued you would have to bring the work up to todays standards if you wanted a certificate. This can cause problems as it is not always possible, or prohibitively expensive, to do. Even if the work reaches the standards in force at the time the work was done you cannot have a certificate issued NOW against those standards.

this is why indemnity policies exist, to cover work done for which there is no certificate.

Imagine an extension done a few years ago. Say the work was done correctly but regulations have since changed and it wouldn't pass inspection today. A seller can't now get a certificate, the buyer is concerned about the work. The answer is for the seller to pay for an indemnity policy to cover the buyer in case the council take any action. The buyer pays for a survey on the property to check that the building is to standard.

Now think what that indemnity policy covers. It doesn't cover shoddy workmanship - but then a survey has investigated that. It covers the council ordering work to be done (or undone), but the council can only go back 4 years for lack of planning permission and 1 year for building regs, so that is unlikely to happen as the work is older.

So what does the indemnity policy give you? Peace of mind, no worries about selling the property in years to come? Nothing tangiable then.

From the opposite point of view, the policy costs a couple of hundred pounds. the cost of the insurers writing and selling the policies, a few quid for the solicitor to purchase it. If there were lots of claims the costs would go up over the years to cover this, but the costs haven't changed, because there have been few claims.

So do you need to take out a policy? Your peeved because the seller hasn't got the certificates so your happy for them to pay a few hundred pounds, they pay it to secure a sale. Everyone is happy! Especially the insurers, money in the bank.

babs

My hubby is a building control officer. Here is what he said.

Firstly, you may have problems in the future selling if you don't have a completion certificate.

Once you are the owner, if you go ahead with sale, ask the LA to carry out a final inspection (this can only be done if the previous owners, applied for approval 15 years ago)

If work is satisfactory they will issue a completion certificate free of charge based on the regulations in force 15 years - Not Now as previously stated. However, if anything didn't meet the standards at that time it will have to be put right before a certificate can be issued.

Babs x

silvercar

my council said they can only apply the rules currently in force and cannot measure against standards in force at the time of the extension.

babs

This only applies if building reg approval wasn't applied and granted initially. In this instance, you would need to make a complete new application and all work would be on today's standards.

If building reg approval was applied and granted and the work had been noted down as being STARTED by the council then you can ask for a completion certificate based on the standards 15 years ago.

I would take this up with your Building Control Department if they are saying otherwise.

silvercar

we moved in the Summer. The exension work to the house had been inspected at various stages prior to completion but a final inspection and sign off had never been done. When this came to light, the seller's applied for a final certificate and were told they would have to comply with current regulations (apparently recently changed). They had to have extra works done before a certificate was issued, including an extra support in the loft and a fire door between the integral garage and the house. Apparently the roof support wouldn't have been required if the certificate had been applied for when the work was done 9 months previously.

They apparently did have some arguements with building control but were told catagorically that any certificate issued has to comply with regulations in force at the time of issue.