Indemnity Policy for Septic Tank?

Richard_Webster

Apparently once the builder has sold the last property he's going to make the septic tank a company, but this is in the future and not yet sorted.

Well the septic tank itself wouldn't be a compamny! I assume he means that he will set up a company to own the land where the septic tank is and that company will then give rights to the various property owners to use it. The property owners ideally should eventually control the company. Each property owner should get a share in it, but the land owner would retain a special controlling share which he would lose when he sold the last property.

Frankly he should do this now and I can't see why he can't. How do you know he will do so in the future? Not sure an indemnity insurer will be interested in indemnifying in a situation where the undocumented use hasn't already started. Seller is being sloppy or doesn't want to pay the extra costs of setting a company and the related conveyancing involved in granting rights etc.

I would insist that this is sorted now - it can be sorted, so the seller should do so. Otherwise you are going to get all kinds of difficulties down the track if it isn't.

stator

I would think an indemnity for this will be very expensive. A house without sewage is virtually worthless, so the indemnity would have to cover the entire value of the house.
If you are buying from the original developer you need to make it clear to him that he's going to have to pay the costs for this indemnity and then he might come up with a better option to formalise the arrangement

abillybob94

Oh no more scary things

Thanks for all your advice guys. Our solicitor has asked them to buy an indemnity policy to cover the risk and we're still awaiting to hear back. The seller is apparently poorly with asbestos lung and I suppose the reason as to why he hasn't set up a company as of yet could be because of this with the extra stress and effort that would go into it.

Although it could also be because he's being sloppy and wants to save some money! We don't know if he will definitely do this in the future, he may not but I presume if this was the case couldn't we remedy it by installing our own septic tank on our land and then pointing the pipes in the house to this? Wouldn't this be what the indemnity covers us for rather than the full price of the house?

Sorry first time buyer here so not 100% sure what I'm on about!

stator

abillybob94 wrote: »

Oh no more scary things

Thanks for all your advice guys. Our solicitor has asked them to buy an indemnity policy to cover the risk and we're still awaiting to hear back. The seller is apparently poorly with asbestos lung and I suppose the reason as to why he hasn't set up a company as of yet could be because of this with the extra stress and effort that would go into it.

Although it could also be because he's being sloppy and wants to save some money! We don't know if he will definitely do this in the future, he may not but I presume if this was the case couldn't we remedy it by installing our own septic tank on our land and then pointing the pipes in the house to this? Wouldn't this be what the indemnity covers us for rather than the full price of the house?

Sorry first time buyer here so not 100% sure what I'm on about!

How much land do you have? Septic tank distributes the filtered sewage out into a field. If you don't have enough suitable land you can't have a septic tank. Instead you would have to have a sewage tank. This would mean you'd have to pay someone to empty it all the time which would cost money.

Davesnave

stator wrote: »

How much land do you have? Septic tank distributes the filtered sewage out into a field. If you don't have enough suitable land you can't have a septic tank. Instead you would have to have a sewage tank. This would mean you'd have to pay someone to empty it all the time which would cost money.

There is also a more modern option, which is to have a private treatment plant installed, which would allow the discharge of treated waste direct into a ditch or stream, as an alternative to percolation.

Surely no one would want to install a cess pit nowadays.

There are several red flags for me here: notably that the property has taken 2 years to find a buyer, and that the builder has, perhaps, not considered the legal aspects of the build at an early stage.

While a legally qualified person ought to be the one drafting each resident's rights and obligations as part of the title, with property that has shared facilities, the builder needs to think about these things right from Day 1, so that the physical aspects of the site do not create problems later.

With someone as disorganised as this chap, I wouldn't be confident that had happened.

phoebe1989seb

I was wondering how the other barn owners had dealt with this issue.....the OP referred to having obtained their title deeds from the LR, so I assume that some have been sold. Perhaps the OP could speak with these potential neighbours......

DaftyDuck

The other owners may well not have mortgage liability, so their purchasing solicitor might have warned them of the risk, but felt able to continue if so instructed by the buyer.

If there's enough plot space to install a modern treatment plant (as Dave suggests, and it only takes 20 feet squared), then I would consider this a possible belt-and-braces cover should the builder not meet his promises.

However, given the builder doesn't seem to have been completely on the ball, worth checking this septic tank met regulations and has been signed off. Worth checking everything else carefully too...

Freecall

Davesnave wrote: »

There is also a more modern option, which is to have a private treatment plant installed, which would allow the discharge of treated waste direct into a ditch or stream, as an alternative to percolation.

You would still need a licence to discharge from the Environment Agency and there is no guarantee that you would get one - especially with an existing septic tank close by.

This really is a matter for the seller to sort out in advance. If other purchasers have taken a chance on the basis that all will be fine and don't worry about it then that is up to them. This has all the hall marks of a post on here in a couple of years time titled 'Help - can't sell my house due to legal problems with sewage'.

G_M

PS, looking at the searches it says that our water isn't from the mains water. Our solicitor has said he'll have to make further enquires to where we get our water from

I'm amazed you've got as far as you have before finding this out. Where your water comes from is just as mportant an issue as the sepic tank - if not more so.

* is the water source safe drinking water?
* does it need treating and is it treated?
* is it a reliable source, or a well that (might) dry out in hot dry weather?
* If the source is not on your land, is there a right to use the water source (as with the septic tank)
* is there are right to access and to maintain the source eg if the well collapses or needs maintenance, and the owner does nothing, are you permitted to send in a contractor and fix it?

abillybob94

Ok so apparently all the enquries have been answered now by the sellers solicitors and my solicitor seems to be happy. They have also said they will fund the indemnity insurance on the septic tank.

My solicitor has now said he's waiting for final versions of the documents to sign from the sellers solicitors and then he will send us a report? Do you think this means we will be able to complete soon? What's the next step?