House built in 4/50s....solicitor requesting indemnity insurance for 1920s title doc?

Midnight_Tboy

Hi all.

Without going through all the details of the nightmare time I've had so far with mortgage advisors etc, basically we're buying a house, a few houses away from where we currently rent, on what was originally thought to have been a fairly quick sale as First Time Buyers.

As its local to us, we kind of know the sellers, and had exchanged numbers early in the process.

Anyways, it's been dragging out a while, either side getting quite frustrated due to the problems (the MA mostly)

I then received a message from seller a week or so back, showing a letter from their solicitors saying that our solicitors requested some "title document" that dates back to 1921, and that as theres no record of this in Land Registry etc they want them to take out an indemnity cover for £88 for this.

Now the house wasn't built until around the 50/60s give or take, and have no idea what this is for as it doesn't say in any detail, but basically the sellers were going to tell their solicitor they're not paying for it as didn't believe it was needed.

Now today, I have just received a letter from my solicitor saying

"I have received notification from the sellers solicitors that you have been dealing with the Seller direct with regards to the indemnity policy that I have requested. It seems it has been agreed that the seller will not be making any allowances for indemnity policies and that you will be paying for the policies yourself. Unfortunately these are required as they are for the benefit of the lender"

I made no such offer, I just said it sounds crazy and have no idea of what its for in the reply sms to the sellers.

I've read online that it seems common these days for the solicitors to try to fleece indemnity policies for things left right and centre.

At the moment, this is the only indemnity policy that I know about, but the letter mentions policy both plural and singular....so I've emailed today the solicitor asking to confirm if this is the ONLY policy requested. If its the only one then I guess I'll reluctantly have to pay it, but any more then I have no idea what to do til know what its going to cost me.

Any ideas what this "title document" might be for? considering it goes back to 20/30yrs before the house was even built

I'm also concerted that a few weeks back I know the solicitor had also requested a certificate for approval for a conservatory.....when it was built when conservatories did not require any permission....so makes me wonder if they're going to try and slap indemnity policies on every possible outcome, or if its just a one off.

I'm curious too.....they say that these policies are for the benefit of the 'lender', but as of right now they've not even heard from the lenders, as that is with the underwriters right now (the status on the online tracking has just changed to "Date Case Offered" so its hopefully near the final offer of mortgage now, so I wonder what would happen in scenario that these indemnity policies were flat out refused to be bought?

Thrugelmir

Midnight_Tboy wrote: »

so I wonder what would happen in scenario that these indemnity policies were flat out refused to be bought?

Simple. The solicitor will report back to the lender who is employing them. The lender will not release the funds for completion.

Midnight_Tboy

thanks - figured as much for that part I guess - I'd have thought for the indemnity policy it would actually say what the title certificate requested was for however. I know when we got the solicitor quotes ourselves for the beginning of the sale, I know there was recommended indemnity insurances there, to do with Chancel I believe (the farm incident), and think was around the same sort of money, though I hadn't as of yet said whether they are to go ahead and pay that or not as it was optional but recommended

Thrugelmir

While it's great having direct contact with the vendors.

At a point you will be on opposite sides of the fence from them so to speak. As you've found they'll use it to their advantage.

So worth keeping a distance and allowing the solicitors to do their job. If mediation is required using the EA is useful tool.

Yorkie1

Just so you're aware, solicitors do not make any profit on indemnity insurance policies; they are disbursements and therefore charged to the client at policy cost.

I suspect, reading between the lines, that there's references in current documents / land registry entries to obligations (covenants) in a document when the land was previously sold in the 1920s. If that document is not available, there is no way of knowing whether the houses are built in breach of a still-enforceable obligation.

Therefore, the lender (and you) need to be sure that nobody will take you to court for a breach of any obligations. The indemnity policy protects you against the cost of such action. Highly, highly unlikely to happen but it's belt and braces where lenders are concerned.

Chyna81

Hi,

I am in a similar position however I am due to exchange next week. I have received my freehold property report which states there may be unknown restrictive covenants and I should take out an indemnity policy as the seller has refused to fork the bill on my behalf.

Although my solicitor advised in the report to take out an indemnity policy, after speaking with him he said I should not bother as the covenants are from 1934 and it's highly unlikely that action will be brought against me.

The way I see it if the vendor I am buying off does not have this policy then I need not have it.

Midnight_Tboy

thanks guys.

As you say, there are certainly some negatives in having some direct contact with the sellers......I can understand their frustrations to some extent, because of the delays due to my mortgage advisor messing up the application TWICE (even told them beforehand on the 2nd occasion something that would cause a problem but they assured me it would not and it failed for that very reason).

I don't mind paying this one payment, but of course, if it wasn't actually required then I'd rather not pay it all all if its optional, for that 1 in a billion risk. The house itself is ex council house, bought out early 90s I believe and extended upon........I'd have thought being ex council, there'd be less likelyhood of issues with the land (but then I'm very naive when it comes to trusting what the government do with the land I guess )

I'm also concerned that there could be a huge list of indemnity policies that I don't even know about that I'd also be expected to cough up on too.

As mentioned earlier, I know they were requesting certificates for building regulations on the conservatory that wasn't needed at the time of build....so maybe they'd be after that, but wonder about other things too, I think there was mention I saw on searching about boilers having not been services for example

Chyna.....I see it the same way, but then if it causes the lenders to not give us the money for something so unlikely then they have us between a rock and a hard place of pulling out of the mortgage offer