indemnity issues PLEASE HELP!!?!

indemnity

My husband and I are desperately trying to sell our house.

While my husband lived there he added a two storey extension. He used an architect and went through all the proper channels to ensure the extension complied with regulations and was constructed properly.

When it came to selling, the buyers solicitor's discovered an issue, which is now effectively making the house un-saleable.

The original plans from the land registry, used at the time the extension was built, were incorrect. An area shaded a certain colour on the plans which meant that building COULD be done on that land - were meant to be a different colour, saying building could NOT be done. The reason for this being that there are electric cables below ground level and access may be needed by the electricity board. The land registry have admitted their mistake, and have now provided us with the correct plans - but with the extension having already been completed well over a year - this is a bit of a slap in the face.

We have contacted the electricity company, and they have visited the address. They have written confirming that with regards to the extension, they are still able to access any cabling from the front or rear of the building, and that is sufficient access for them. They have said that the only issue they would have would be IF they accessed the cabling AND it was damaged AND it could be PROVED that it were damaged as a direct cause of the extension then there would be an issue of liability.

This was enough to put our first buyer off, and the sale fell through. When we found a second buyer we were of course up front with them about this issue, and they were happy to proceed with the sale, as the risks seemed low. However, the day prior to exchange their solicitor informed us that their lender demanded an indemnity policy to cover the issue. They and we were unable to find such a policy and again the sale fell through.

We have handed the matter to the original architect who over-saw the extension, and despite his assurances of effort on his behalf, we don't seem to be getting anywhere with resolving this issue, and making our house sale-able!

My question is therefore, what policy do we need for an issue this specific? Is there one??
If there is a policy, can we as vendors purchase it, and hand it over to a buyer?
Where can we get such a policy? Who do we need to contact?

Who should be liable for this entire fiasco? The land registry or the architect who advised and oversaw the extension? Would any costs incurred potentially be covered by any professional indemnity held?

Anything else we need to know! I haven't a clue about any of this really - we are very much learning as we go along and any advice would be very much appreciated!!

go_cat

Your solicitor will be able to get the policy for you - if this pushes the sale through for you, for a few hundred pounds I would go for it

Flat_Eric

indemnity wrote: »

My husband and I are desperately trying to sell our house.

While my husband lived there he added a two storey extension. He used an architect and went through all the proper channels to ensure the extension complied with regulations and was constructed properly.

When it came to selling, the buyers solicitor's discovered an issue, which is now effectively making the house un-saleable.

The original plans from the land registry, used at the time the extension was built, were incorrect. An area shaded a certain colour on the plans which meant that building COULD be done on that land - were meant to be a different colour, saying building could NOT be done. The reason for this being that there are electric cables below ground level and access may be needed by the electricity board. The land registry have admitted their mistake, and have now provided us with the correct plans - but with the extension having already been completed well over a year - this is a bit of a slap in the face.

We have contacted the electricity company, and they have visited the address. They have written confirming that with regards to the extension, they are still able to access any cabling from the front or rear of the building, and that is sufficient access for them. They have said that the only issue they would have would be IF they accessed the cabling AND it was damaged AND it could be PROVED that it were damaged as a direct cause of the extension then there would be an issue of liability.

This was enough to put our first buyer off, and the sale fell through. When we found a second buyer we were of course up front with them about this issue, and they were happy to proceed with the sale, as the risks seemed low. However, the day prior to exchange their solicitor informed us that their lender demanded an indemnity policy to cover the issue. They and we were unable to find such a policy and again the sale fell through.

We have handed the matter to the original architect who over-saw the extension, and despite his assurances of effort on his behalf, we don't seem to be getting anywhere with resolving this issue, and making our house sale-able!

My question is therefore, what policy do we need for an issue this specific? Is there one??
If there is a policy, can we as vendors purchase it, and hand it over to a buyer?
Where can we get such a policy? Who do we need to contact?

Who should be liable for this entire fiasco? The land registry or the architect who advised and oversaw the extension? Would any costs incurred potentially be covered by any professional indemnity held?

Anything else we need to know! I haven't a clue about any of this really - we are very much learning as we go along and any advice would be very much appreciated!!

I can't help much other than to say you will need a bespoke indemnity policy for this and your conveyancing solicitor should be investigating this for you. It is usual for the solicitor to make contact with indemnity insurance companies rather than Joe Public. I suspect that because you have been in touch with the electricity company (i.e. notified them about the extension/that it goes over the cables) that this will be taken into consideration by the indemnity insurance company as to whether or not they decide to offer cover. Yes as vendors, you can (if you wish) be responsible for the costs of the policy - usually it would be taken out on completion and the monies payable deducted from the sale proceeds. The policy would then be handed over to the Buyers with the rest of the sale documentation/title deeds.

In general terms, I would be finding out how long the cables under this extension have been there for. I know nothing about such things but I'm thinking along the lines that if they have been there donkeys years then there is a good chance they are going to fail at some point and of course it would be sod's law for the problem to be right under or near where the extension is. I also suspect that if the electricity company could blame any work needed to the cables because of the extension then they would do so. (but that's just the cynic in me!)

As for liability - that's a difficult question to answer and to be honest, I think you would be wise to see if there is a litigation solicitor at the firm where your conveyancing is being undertaken as litigation is expensive and stressful and not something to be undertaken lightly.

You need someone to look at all the facts and paperwork and get some informed advice about the best course of action for you. Sounds like your architect has a sneaky suspicion that you might come after him and therefore isn't being as helpful as you want him to be. As for the Land Registry, has your solicitor raised issue under their complaints procedure?

Fire_Fox

This is what you are paying your solicitor to deal with for you, if they don't know the answer have them find someone in the practice who does. Not sure you can get an indemnity now you have contacted the electric company.

teneighty

They have said that the only issue they would have would be IF they accessed the cabling AND it was damaged AND it could be PROVED that it were damaged as a direct cause of the extension then there would be an issue of liability.

I would take a slightly different tack and try to demonstrate that the cable has not and could not be damaged and also for peace of mind that the cable or more specifically the trench it was laid in will not undermine the extension.

How deep is the cable? How deep are the extension foundations? Can anyone confirm exactly where the cable is laid?

I would suspect that if the foundations went down 1 metre the cable or signs of the trench excavation would have been spotted so maybe the cable is close to the extension but not directly under it?

I worked on a similar project many years ago and eventually after being frustrated by the lack of information from the electricity company we decided to dig an exploratory trench to try and find exactly where the cable was. It turned out it was in the next door neighbour's garden about 6 feet away from where it was supposed to be.