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Completion Certificate and Regularisation
glocal
Posts: 125 Forumite
I am in the process of buying a flat in a converted building. It turns out the Building Regs Completion Certificate is missing and the current owners took out an indemnity policy which covers them and future owners. I find it alarming that such a policy remains an option as long as the Council doesn't know about the missing certificate, but I understand this is very common practice and according to my solicitor perfectly legal. How can it be legal if we must keep it a secret?
Anyway, the problem is that some lenders these days, including mine (HSBC), refuse to lend a penny if the certificate is missing, even if an indemnity policy is in place. HSBC may be picky, but this probably says something about the investment risk involved. My solicitor advises me to pull out if the vendor cannot get the certificate from the Council, because in the future I may have the same trouble selling particularly if more lenders demand that the certificate is produced. Apparently, the trend is towards tighter terms.
So the vendor's solicitor says they are not going to check with the Council because if the certificate doesn't exist, the vendor loses the indemnity policy option forever.
What I don't understand is why the vendor wouldn't apply for a Regularisation Certificate. I may be missing something but I think this would simply involve an inspection and a fee. Can it be so complicated, expensive or time-consuming so that they prefer to risk losing the buyer three months into the process? The risk of problems with the actual work is non-existent really because the flat is part of a huge converted block, so presumably the conversion was done properly back in 2002 . If the bank insists saying no, I won't have a choice anyway so it will be up to the vendor to produce a Completion or Regularisation Certificate, or lose the sale. I just find the whole thing very peculiar. Any comments?
Anyway, the problem is that some lenders these days, including mine (HSBC), refuse to lend a penny if the certificate is missing, even if an indemnity policy is in place. HSBC may be picky, but this probably says something about the investment risk involved. My solicitor advises me to pull out if the vendor cannot get the certificate from the Council, because in the future I may have the same trouble selling particularly if more lenders demand that the certificate is produced. Apparently, the trend is towards tighter terms.
So the vendor's solicitor says they are not going to check with the Council because if the certificate doesn't exist, the vendor loses the indemnity policy option forever.
What I don't understand is why the vendor wouldn't apply for a Regularisation Certificate. I may be missing something but I think this would simply involve an inspection and a fee. Can it be so complicated, expensive or time-consuming so that they prefer to risk losing the buyer three months into the process? The risk of problems with the actual work is non-existent really because the flat is part of a huge converted block, so presumably the conversion was done properly back in 2002 . If the bank insists saying no, I won't have a choice anyway so it will be up to the vendor to produce a Completion or Regularisation Certificate, or lose the sale. I just find the whole thing very peculiar. Any comments?
0
Comments
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Replying to my own post for the benefit of others, HSBC insist they won't be lending any money unless the certificate is produced and the vendors applied. Apparently, the Council issued the certificate within 24 hours! Some sense at last. :T0
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