Covenants and indemnity insurance

haverhillhammer

Just had a letter from my solicitor, regarding a partition wall that was removed in my house sometime before I bought the property.
Basically, the solicitors are asking whether there was permission to have it removed, and if not was there a policy to cover the lack of permission.
I have no clue whether any permission was granted, or whether any policy exists, so the solicitors say that they will have to get either retrospective permission from the Council, or that I buy a new policy to cover this.

Does anyone know where I can find out about these policies? How much do they cost?

Richard_Webster

Some solicitors just don't seem to anticipate the obvious questions their clients are going to ask.

It really isn't difficult to tell a client 2 things in this kind of case:

1. Don't talk to the Council about the matter, because if you do you could lose the ability to get a policy
2. How much the policy will cost and how it is arranged (usually from the sale proceeds on completion)

A policy for a house worth between £150-£200K would cost £57 with a leading company. The policies are arranged by solicitors because they are specialist and do not take very long at all to sort out. The work must be at least 12 months old for a policy to be available.

It only deals with the (unlikely) possibility of enforcement action by the Council, and doesn't give any guarantees about the quality of the work if there is a problem with it later - but again all this should be explained by your solicitor.

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

haverhillhammer

Thanks for that, Richard.

My house is only worth £135k, so my policy may be cheaper, I guess.

There is also a 'flying freehold' issue, regarding a room which goes over an accessway.
They say I need a policy for that, too.So that will be two extra policies, plus the Chancel policy that I have purchased. The world has gone mad!

The purchasers have also asked for £500, in respect of some window seals that need replacement. I believe they should have offered £500 less, if they wanted to get that money. I am going to refuse to give them anything, although I am getting myself a quote , in case I don't move.
Right now, I am thinking of pulling out, completely, regardless of the cost to myself.

papermoney

I have had a similar problem recently. The solicitor said it would be £120 to insure on 140k house(the conservatory apparently didn't have planning permission) My solicitor didn't explain it very well and I have got confirmation from the counil that they have no interest in the conservatory - now just waiting to hear back from the buyers solicitor.

haverhillhammer

The removed wall broke a restricted covenant, so whoever took the wall down, did it illegally. Yet it is me, the current owner who has to pay.

loveandlight

Originally posted by haverhillhammer

The removed wall broke a restricted covenant, so whoever took the wall down, did it illegally. Yet it is me, the current owner who has to pay[/

B]

Can't you claim it back from the person who sold you the house? Or claim it from your solicitors who acted for you at the time of your purchase as they should have picked this up? We did.

Richard_Webster

Your previous solicitor would not necessarily have known that there had been an internal wall removal. Also, if you bought the house before the awful case of Cottingham v Attey-Bower in 2000 (that started all this business about building regulations for old work)he would have quite reasonably taken the view that he didn't need to ask about the legal aspects of internal work done on a property more than 12 months previously.

Whilst it is possible, if this is a freehold house, it is quite unusual for there to be a restrictive covenant restricting internal alterations.

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

haverhillhammer

My current property is an ex local authority house.The covenant was there in 1988.Between then and 1995(approx), this wall was removed.
I have spoken to the housing association that took over the properties, and they have given me information to get this one sorted out.Sounds like I just need to write to them, explaining what has happened, and they will grant retro consent.

The issue of the 'flying' freehold is bugging me more at the moment.

PDW_2

We are first time buyers and currently in the process of buying a house that has had a garage conversion into a dining room and there is no planning permission for it. The sellers are saying that the conversion was done before they moved in. Our solictors are currently asking them to pay for an idementity policy. The sellers brought the house back in 2004.

We have some confusion on the pros and cons of a indemntity policy.

My question is how does this policy affect building insurance and selling the house further down the line and generally is it safe buying a house with this policy attached to it.

Thank you

helmarwin

I am in a similar situation, looking to buy a house as first time buyer and just been informed it is the kitchen extension that was done by previous owners without planning permission and current owners have indemnity insurance which would be transeferred with the house.
what id like to know is what does it actually cover you for? does it protect you from some authority telling you you need to remove it, or change it to fit regulations?
the current owners have lived there 3 years no probs but its just a bit daunting and wanted some more info.
also, anyone know how common this situation is?

thanks x

silvercar

Indemnity policies generally cover you in case the council insist you do work to rectify a situation that exists without PP/ building regs. As they can't be taken out if the work is very recent and the council can only enforce building regs within a year of work being done, indemnity policies are useless in that they cover you for something that can't actually happen.

What they do do is give peace of mind (to you, your solicitor and your lender) that everything is covered off.

What they won't do is cover the cost of putting right shoddy building work. So check with your surveyor that the work will hold good.

Supposedly they cover the loss in value (if there is any) from a place with the correct certificates and one without; but as previously said, enforcement action isn't possible, so they are irrelevent in that respect.