restrictive covenant Indemnity policy

Gills1979

I'm currently in the process of selling my home and after quite a protracted process felt we were now at the point of exchange.. However the buyers solicitors have now insisted that I purchase a restrictive covenant Indemnity policy to cover the fact that double glazed windows were installed over 15 years ago ( long before I purchased the property ), when the is a covenant in the 1985 produced deed about alterations. The probability that the original home builder will come back to an estate of over 1000 homes and insist that nearly every property revert to single glazed windows is simply not going to happen. I've refused to pay for this and my solicitor has advised that the buyers solicitor is being over particular and not engaging common sense. I'd like to know if things like this come up is it at the buyers discretion to go ahead without or will their solicitors insist on it being in place.

silvercar

If your buyer's solicitor is advising his clients not to proceed without it, then assuming they take his advice, either you pay up or risk losing your buyers.

The fact that it is a worthless piece of paper does not matter, if paying for it makes the sale proceed you have to decide if that is worth it to you.

davidmcn

And the buyers may well have no discretion if they're getting a mortgage and their lender insists on it (it's likely that the lender will simply follow whatever the solicitor's advice is).

Gills1979

Then surely it's for them to pay as I as the current owner get no benefit from having such a policy in place.

Gills1979

I have also already purchased an indemnity policy on their request to cover the fact their is no Fensa certificate for the windows despite there being no requirement to have one at time of installation. To now come back with a further request so late in the process is poor. I have been very accommodating in terms of accepting an offer under what u said I'd accept ( which was still several thousand under asking price ), and supporting various other checks they wanted done on the property.. think its about time they gave towards the process . I've had absolutely none of these issues with my purchase which is a proper of similar age built by same developer.

stator

Have you found out how much it would cost?
I'm afraid you've just got to make a decision about whether you want to stick to your principles or risk losing the buyer. Would it be a big hassle if you had to find another buyer?
You can always offer to split the cost 50/50

Newly_retired

Our buyers' solicitor asked for an indemnity policy as the previous owners, like many other owners of property in that street, had broken a restricted covenant imposed by the builders/developers preventing any extensions being added.
We discussed this with our solicitor who agreed it was a pointless piece of paper, and supported our refusal to pay for this. The cost as far as I recall was around £145. Fortunately our buyers' solicitor did not insist.
Had they done so, we would have paid to get a policy rather than lose the sale.
Hope this helps.

silvercar

Gills1979 wrote: »

Then surely it's for them to pay as I as the current owner get no benefit from having such a policy in place.

All depends how desperate you are for the sale to proceed.

EmmyLou30

If you want the sale to proceed then just pay it - yes it's a worthless piece of paper but some nervy FTBs and even non-FTBs get freaked at the slightest thing and back out of a sale. You may well risk losing your sale if you don't pay it. It's always bought and paid for by the vendor though, not the buyer. It shouldn't cost a lot though (in the grand scheme of things).

The vendor of our house bought one against him breaching a restrictive covenant (removing the front lawn and having shrubs taller than 3 foot high, and owning a garden shed) but that was on his own solicitors advice, we were just told he was doing it! Waste of £100 if you ask me and we never woud have insisted on one but some buyers always will unfortunately.

DRP

EmmyLou30 wrote: »

If you want the sale to proceed then just pay it - yes it's a worthless piece of paper but some nervy FTBs and even non-FTBs get freaked at the slightest thing and back out of a sale. You may well risk losing your sale if you don't pay it. It's always bought and paid for by the vendor though, not the buyer. It shouldn't cost a lot though (in the grand scheme of things).

The vendor of our house bought one against him breaching a restrictive covenant (removing the front lawn and having shrubs taller than 3 foot high, and owning a garden shed) but that was on his own solicitors advice, we were just told he was doing it! Waste of £100 if you ask me and we never woud have insisted on one but some buyers always will unfortunately.

It is generally paid for by the vendor, but if they refuse it comes down to whoever has most to lose. If, for example, it is the buyer's mortgage company who are insisting on a policy then the vendor may decide that it isn't their problem.

Hoploz

I had to buy an indemnity to cover a covenant about alterations too, even though my house was built in 1958 so extremely unlikely to be enforced. So I would say go ahead and agree to it to get on with things.

However, if they have already asked for an indemnity which is totally pointless on Fensa when it was never a requirement, that seems ridiculous! I would suggest saying you will buy one of these but not both.

(the policies are only taken out when you complete, I think, so they shouldn't have already bought the first one.)