Building Regulations Indemnity Policy

Severnside

I’m in the process of selling my house. Twelve years ago in 1995 I got someone to draw up plans for a front porch and a large loft extension which included a shower room and also a utility room which also was to be connected to the H & C water supply.

We applied for and were granted planning permission and building regulation approval as well as Vendor Consent (the Council were the original owners of the land and this consent was required for any work done to the property).

Having accepted a quotation, a builder carried out the work during the Autumn of that year. During the process I recall cards were submitted to the Council by the builder under the building regs as various stages were reached. I also recall seeing the Inspector call a couple of times at least during the building work (which dragged on for about 3 months with the usual disappearing act by the Builders at various points).

When it was all finished the Inspector called again. He was happy with the porch and he was happy with all of the loft conversion except he said the headroom over the bottom step of the staircase didn’t meet the minimum height requirement. The builder agreed to do this and the Inspector went away never to be seen or heard from again.

This work was done in January 1996 and I asked the builder if we ought to get the Inspector back but he said it wasn’t necessary and was only a waste of money as a further fee would have to be paid. Rather foolishly I now think, I went along with this as the work had come to more than was anticipated for various reasons and money was tight.

My solicitor, at the request of the purchaser’s solicitor, asked me for the “completion certificate” from the Building Inspector but of course there isn’t one. Having explained the situation to him he has now written to me saying I have two choices:

!) I can ask the Building Inspector to come in to visit. If he does give his Certificate that is OK. The solicitor then says, “Of course it is possible that he will not give you a certificate and you will have to do more works in order to get him to do it”.

2) The alternative says the solicitor is “that you offer a Building Regulation indemnity policy of which there is a one off premium payable. This is based on the purchase price. On a price of £225,000 the premium will be £500. What you cannot do is first go to the Building Inspector and then try and get insurance. You cannot obtain insurance if you have notified the Council of a possible problem”

Apart from the fact that he’s got the price wrong (£225,000 was the original asking price last year, but the agreed sale price is £197,000) is he right? When I had got over the initial shock I rushed off to search on the web for a cheaper quote but came across this site first. From another thread here I’m not clear if the Council can actually do anything after all this time. Since the porch & loft were built in 1995, the only time any Council staff have been near the place is to deliver election voting cards and empty the bins.


I am worried about getting the Building Inspector back because now I wonder if the builder did raise the ceiling above the bottom step by the required amount. He certainly did raise it, but the water pipes to the utility room run immediately above it, so I don’t think there was much leeway nor have I a clue as to what the height requirement was in 1995. Also the builder under-estimated on the job he claimed at the time because the roofing subcontractors apparently charged more than he expected. So he said he had made no profit which makes me fear he may have cut a corner on this ceiling work. I fell out with him long ago because the porch roof was unsatisfactory. I made a retention, he wouldn’t come back, and in the end it cost me more than the retention to get the work done.

I suppose for many people £500 isn’t much, but the whole purpose in moving is to go somewhere much cheaper, as having been forced to retire early, my financial situation is quite dire and getting worse. I haven’t got £500 and I fear if the ceiling has to be raised the cost might be even higher plus if that delays things I could lose both my purchaser (they are renting) & my own purchase (the house is empty). Any advice from anyone who has come across a similar situation would be much appreciated. Thanks.

Doozergirl

£500 is way over the top. I've sold more expensive houses and never been charged more than £200.

I would contact building control because even if it doesn't comply, they really can't come after you after this amount of time. They will have record of your original application and what the inspector saw. Tell them that the height has been raised - what do you do? They may be able to sign off on the final item or they may just write a note saying that they will not persue the issue any further.

silvercar

Risky decision to make.

If you call the council and they say they have not kept the records from so long ago, you will be stuck. You won't be able to take out an imdemnity, you could hope the council will right you a non-pursue letter, but some don't (and even if they do, will your buyers accept it?). If the council don't have the records and you wanted then to obtain the certificate you would be stuck with trying to meet todays requirements - which may not be possible.

Bear in mind that an inspection from the council costs so you will be spending some money, whichever way you go.

The third way is to tell your buyers that the work was done so long ago that their solicitor should realise that there can be no comeback from the council now; that they should rely on their own survey to check the building is OK and that you are not prepared to pay out for further inspections or indemnities. They can like it or lump it!

Severnside

Thanks Doozergirl and silvercar for your helpful comments. Certainly I thought £500 seemed over the top so I'm very interested to hear that £200 or less is the norm.

I have to be careful not to upset my purchasers because I've had a lot of difficulty selling and have had to reduce the price twice. They're ideal buyers because they aren't selling and this was a strong factor in persuading my seller to accept my offer on the place I'm buying.

So I'm going to give it a bit more thought overnight and then make a decision. Thanks very much.

chops05

£500 does seem a bit steep. My Grandad is purchasing a property where the extention to the rear doesn't have building regulations as they have been lost. We have taken the endemnity at it is costing £241 on the purchase price of £230k. Can you not "shop around" for a cheaper insurance?

Severnside

It has proved quite difficult to track down insurers as it is a specialist field and it seems most, possibly all, will only deal with professional advisers.

However I did eventually unearth a company called Stewart Title who have an online application form, keyfact sheet and specimen policy which you can download. Their premiums are extremely reasonably, they are FSA regulated and are owned by a big US firm.

For my house, sale price £197,000, their premium, including insurance tax, is £57! Even in rip-off Britain the difference between £57 and £500 is startling (to put it mildly). So I rang them but they will only deal with solicitors so I am at the mercy of mine whose literature says they only offer the product of one (unspecified) provider. I've written to them today sending the print-outs and saying I would prefer to use the people who charge £57. I await the reply with interest. Solicitors proclaim they always act in the best interests of the client. My best interests is to pay £57 not £500. We shall see!

Doozergirl

Severnside, I hope your name isn't your location as well! :eek:

Thanks for the heads up on that company. I'll keep a mental note of that.

Richard_Webster

Legal & Contingency will also do it for £57. Thing is that a lot of solicitors haven't bothered to link up to all the main providers and stay with one or two. Another provider which sent out loose-leaf books of policies to solicitors, Guaranteed Conveyancing Solutions (GCS) (underwritten by Norwich Union) charges £75 for this price band.

Norwich Union On-line will be slightly cheaper as they always undercut GCS! It is slightly more hassle for the solicitor to sort out Norwich Union On-line because he has to go through an on-line application process whereas the GCS one is where he simply takes the form out of the loose-leaf and fills in the details by hand!

Another provider, Countrywide Legal Indemnities, charge £75.

Your solicitor is talking rubbish if he says an indemnity policy just for building regulation breaches will cost £500.

As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients

Severnside

Thanks very much for your posts. Well it turns out my solicitor made a mistake. He says he came back from holiday and faced with a huge backlog of post he looked at the wrong table. The £500 being for some completely different type of policy! So he can do it for £57.50 with his pet company, as this is only 50p more than Stewart Title I'm not going to argue with that. As to the mistake, well I'll say no more, I'm just so relieved as I don't know where I would have pulled that £500 from.

As to my location well I am heading in the direction of the Severn but will be a good way from it. The property I want to buy isn't affected by the recent flooding. My heartfelt sympathy goes to those who are; it must be an absolutely awful situation to be in, with the fear it could be a frequent occurence.

I'm grateful to Stewart Title for having a useful website open to all and with complete transparency of their fees. Certainly anyone needing this type of insurance could sensibly bear them in mind. Searching for this type of insurance on the web proved very difficult. I searched under both Building Regulation Indemnity and under Title Insurance. None of the other companies came up. That's not to say they aren't there, but if so their entry was probably many pages past the earlier ones which I looked at. Thanks again to everyone for their comments, which encouraged me to look into it further.