Breach of covenant & indemnity insurance when selling property?

SNIC

We are in the final stages (so we thought!) of selling our house and our buyers solicitor has just picked up a breach of covenant relating to an extension we had built 2 years ago for which we should have gained consent from original developers for alterations to the property. We didnt realise this covenant existed and the company who built the house is now dormant on the companies house register so Im not sure how much luck we would have lifting the covenant. Plus 90% of the properties on our road have already had the same work done....
Anyway, my question is this - our solicitor has suggested indemnity insurance as an alternative, provided our buyers solicitor is happy with it. Is it normal that this would be an acceptable alternative?? Unfortunately buyers solicitor is away today so we are having to wait for a response. We were hoping to exchange next week so this is a real pain we could do without Any experiences gratefully received thank you!

go_cat

We ended up buying indemnity insurance as our new house had a conservatory which breached a covenant,just protects us if the builder challenges it even though they were bought out by another builder.

Also to point our my solicitor would not exchange until this had been sorted.

And yes the vendor should have bought it as they messed up by building it before the 5 year covenant was up, but they refused and I didn't want to lose the house so close to exchange

go_cat

Also to point our if the builder is or was aware the covenant was breached then any indemnity insurance would not be valid

phoebe1989seb

We also had to go down the indemnity insurance route when we were selling our (non-listed) Tudor house with 1930s extensions last year that had been subject to a conservatory being built about 15 years before we had purchased the property in 2007.

There was a restrictive covenant dating from the 1930s - which was when the old Tudor building had been carefully removed from its former site and rebuilt several miles away - stating that permission had to be sought from the original vendor of the land before any extensions such as conservatories were added.

Our buyers were happy to go with this, although we were a bit miffed that our solicitor hadn't spotted this when we bought the house three years previously and also as we felt it unlikely that the descendants of the original owner of the plot would be concerned - especially as virtually every other house on the same estate had also been extended (and sold several times) over the intervening years However, we thought it advisable to do this rather than risk losing our sale!

shiny76

SNIC wrote: »

Is it normal that this would be an acceptable alternative??

Yes. Happened to us. We had to buy an indemnity policy, cost approx £180. Buyers solicitor perfectly happy with it.