How far do I push?

EmmEve

I'm looking for some advice if anyone can please help? Our vendors do not wish to pay for an indemnity policy, obviously we don't want to pay either. My solicitor has asked if we want him to labour the point (we do) but I'm worried the vendors will pull out. We are all set to exchange once this is out of the way. I've been advised it's seen as the vendors responsibility to pay for this insurance? so presumably any other buyers who came along would also expect the vendor to pay for the insurance and they (the vendors) stand to lose almost as much as us if they pull out at this stage just because we say no?

jimbog

How much are we talking about?

AdrianC

A bit more detail about the reasons for the indemnity might be useful.

It's entirely possible another buyer might decide no indemnity is needed, depending on the actual risk involved, or their solicitor might not think there's an issue needing to be indemnified.

But, at the end of the day, both you and the vendors need to decide if a hundred quid or whatever is worth the sale falling through over.

Thrugelmir

EmmEve wrote: »

Our vendors do not wish to pay for an indemnity policy, obviously we don't want to pay either.

Then compromise and offer 50/50 split of the cost. :cool:

EmmEve

I'm not sure on the price. I've only just picked up the email and not had a chance to speak to the solicitor to check. It's for a breach of covenant.

EmmEve

I hadn't even thought of that Thrugelmir, thanks.

Kynthia

If they refuse to pay and you refuse what will happen? One of you will break first in order to be able to exchange. So who can hold out longest?

ACG

It depends how much you are talking.
If its £50 then I would just pay it and have done. If its £500 then the most likely outcome is a compromise. If they pull out they have most likely wasted money on valuation and legal fees.

bris

Depends on the risk, breach of covenant can be low to non existent risk if the covenant is old and there is no one to enforce it, which is the case most of the time.

Covenants can be removed in such cases but because of the hassle involved they tend to just sit dormant on the property.

Get the details of the covenant and who holds it, then you can find out if they still have an interest in it and are still about to enforce it.

As for the vendor being liable for it, no they can choose to pay for it or not, it's up to them whether they want to or not.

AdrianC

bris wrote: »

Get the details of the covenant and who holds it, then you can find out if they still have an interest in it and are still about to enforce it.

You're assuming it's covenant-enforcement related.

We've asked vendors to take out two indemnities on different properties.

One was covenant-related, but your suggestion would not have worked. There were definitely believed to be covenants on one portion of a plot, but nobody knew what they were - the paperwork had long since been lost, so the very "get the details" was what was being indemnified against...

The other was relating to mildly dubious RoW for vehicular access to a separate garage within a block.

phill99

Most indemnity policies are put in place due to the massively over zealous nature of solicitors. They normally encourage you to buy one (bear in mind they sell them so have an incentive) for a breaches of planning permission even when the breach was more than 4 years ago (4 years us the cut off point for enforcement), non availability of a fensa cert (there is no risk in not having a fensa cert) or other paper shifting exercises.

Remember an indemnity policy will never legalise any breach, nor will it stop a prosecution. At most it picks up the legal tab to fight it.