ANOTHER Indemnity Insurance Query

wabbitpoo

About to exchange but last minute issues have arisen over BR approval (or lack of) in the house we are buying.....

I get that case law says that building regulations enforcement have no time limit, and that a solution is that someone buys indemnity insurance. I have two queries:

1. What exactly does it indemnify against?

2. How long does it last (ie when we come to sell in 10 or 15 years time will these same issues come to light all over again?)

As I understand it we would be indemnified against BR enforcement (in the unlikely even that t'council ever got wind of something). Is that all the costs of inspection and any putting right that might be needed?

This really does seem to be a waste of time and money to me, but then I am no expert. It smacks of solicitor covering their bottoms, but I don't wish to get into discussions of the worthyness of the idea of indemnity insurance, just the real practicalities.

TIA

go_cat

What's the BR required for?

wabbitpoo

two conservatories, a new single garage and conversion of the old attached garage to a room (that's all!)

ging84

from what i have been told the actual cover is somewhat irrelevant, they are something of a bluff, the possibility the property owner will not be meeting the costs of fighting the enforcement, but rather a large insurance underwriter with an unlimited pot of money and an army of lawyers at their disposal can put an end to the matter before anything gets started

kingstreet

Indemnity insurance covers the legal costs of defending against the council taking enforcement against you.

Yorkie1

wabbitpoo wrote: »

About to exchange but last minute issues have arisen over BR approval (or lack of) in the house we are buying.....

I get that case law says that building regulations enforcement have no time limit, and that a solution is that someone buys indemnity insurance. I have two queries:

1. What exactly does it indemnify against?

2. How long does it last (ie when we come to sell in 10 or 15 years time will these same issues come to light all over again?)

As I understand it we would be indemnified against BR enforcement (in the unlikely even that t'council ever got wind of something). Is that all the costs of inspection and any putting right that might be needed?

This really does seem to be a waste of time and money to me, but then I am no expert. It smacks of solicitor covering their bottoms, but I don't wish to get into discussions of the worthyness of the idea of indemnity insurance, just the real practicalities.

TIA

Are you sure on the highlighted point? I was under the impression that BR couldn't be enforced after a few years.

It's restrictive covenants that have no time limit.

But if your lender insists then you've got to get them.

The others are right - they protect only against the cost of council enforcement. They don't protect against the cost of putting shoddy or dangerous workmanship right if something falls down etc.

wabbitpoo

Yes I am sure about the highlighted phrase.

I have no lender (cash purchase).

So legal fees of fighting an enforcement, or cost of fines for lack of? Sorry, still not clear on what it would pay for!

casperlarue

I would be more concerned about lack of planning permission than building regs. Converting the exsisting garage into a habitable room increases the overall floor area of the property, also the external appearance has most likely changed, ie. gagare door removed and replaced with a window.

This is a typical policy wording, found by googling:

The Building Regulations indemnity policy provides cover when there is a lack of evidence that building regulation consent has been obtained for the following types of work carried out to a single residential and/or commercial property:

• alterations, additions, extensions and conversions if completed at least 12 months prior to the commencement of cover.
• construction of the property, if completed at least 4 years prior to the commencement of cover

Key Features and Benefits
If the local authority serves a building regulation enforcement notice (i.e. a section 36 notice) or obtains an injunction under the building regulations in respect of the works described above, this policy provides cover for the following up to your selected limit of indemnity (not exceeding £2.5million*):

• the cost of altering, demolishing or reinstating the property
• the reduction in the value of the property
• costs and expenses with our consent.

The policy automatically covers subsequent owners of the property and mortgage lenders, and remains in force from the day you issue it without any time limit.

Richard_Webster

Legally planning breaches can be cured by the effluxion of time and the law stops action after 4 or 10 years depending on the nature of the breach.

Building Regs normally are not enforced after 1 year but there is no statutory time bar so in theory a Council could take action many years later - and if they did no doubt the Daily Mail etc would have them on the front page and the Council would be made to look very silly indeed - so it won't happen except for a really serious public safety issue - a Hillsborough type potential situation.

When buying a property you have to be happy that the place won't fall down/burn down etc and that nobody will take proceedings against you because of its condition. If your surveyor can't see any real problem then the indemnity policy is only there to keep mortgage lenders happy because they think the policies are worth while - don't ask me why!

If you bought a house built 100+ years ago when there weren't any building regulations you have to rely on your surveyor.

wabbitpoo

Thanks for all the info. Planning issues have now lapsed (>10years)

Solicitors are trying to get the vendors to basically say whether or not the council at the time told them BR approval was NOT needed...

to be honest I think we may just exchange and complete anyway. When we come to sell, then let battle commence all over again. Losing will to live with all the stress of house buying! due to exchange and complete this week. it'll soon all be over

thanks again for your help.