Buying house - building regs missing?

DeclanRandall

Hi guys.

I'm currently trying to buy a house. I've had an offer accepted, had a survey and all the searches, and my solicitor was at the point of drawing up the contract when he noticed an issue...

The current owners had a basement conversion done as a granny annex (kitchen, bedroom, and bathroom), about 7 years ago - but they don't have a certificate of building regulations for it. The survey I had done (a Building Survey from a reputable firm) didn't see any problems with it, but my mortgage lender isn't happy. Their valuation was done on the basis of 3 bedrooms, not 2, so they won't lend me the money unless the seller can produce proof that the basement is up to building regulations - not that I blame them! - and they won't accept building regs indemnity insurance instead.

The way I see it, there's three possibilities:

a) the seller gets that certificate. However, from what I've read, the council might well demand that the basement conversion be effectively ripped out and done from scratch - pretty expensive and time-consuming. But, they would be able to sell at my current offer... if I stuck around while they did it. (I do really like this house though!)

b) I go back to the lender and ask for another valuation on the basis of the basement not being habitable (i.e. treat the place as a 2-bed house). This would obviously drop the valuation quite a lot, and I'd then reduce my offer by the same amount. This is my preferred option at the minute, since my survey said the basement was fine and I'm happy to use it as a guest room without all the regs. It'd also give me the flexibility to either sell the house on at the cheaper, 2-bed price, or get the conversion re-done to the regs myself in the future (but the way I want it!) and hopefully increase the value of the house by about what I'd spend on it.

c) the seller waits for a cash buyer to offer them the amount I've offered them. Frankly I don't see this happening, but no mortgage lender will pay the 3-bed price.

Am I being daft? Is there another option I'm not seeing? Thanks in advance for any help!

lincroft1710

Either b) or walk away

G_M

a) Not going to happen

b) your lender might/might not agree to lend a smaller amount. If yes, and if vender drops price (Hmmmmm... depends how much the drop is!), then all good

c) you cannot know what other lenders will do. Some might accept indemnity insurance. Some might value it higher as a 2 bed than your lender does. Impossible to predict.

Personally the lack of BRs would worry me more not from a price percepective, or an enforcement perspective. What would worry me more is the quality of the work. Your surveyor will not have inspected inside or behind walls or ceiling or floor.

If it is poorly 'tanked' for example, damp could start penetrating after x months or even years.

If the foundations were disturbed during conversion, the structure might be at risk.

All sorts of potential hidden dangers which is why building inspectors inspect during construction. (though I accept that issues would be most likely to have appeared after 7 years).

mpeople

I would be getting rather nervous if this is a new basement development ie been recently dug out of the ground.
If the basement was already there and has been converted into habitable accommodation,then not so nervous.
edit,the last property i purchased my solicitor classed any building work without a receipt from a builder as diy work.

Try to get the vendor to reduce their asking price or as already mentioned ,walk away.
good luck.

Cakeguts

It may not be possible to get a certificate of building regs for a basement conversion like this. The owners may have done the conversion knowing that the living accommodation will never meet building regs because of the basement living.

What you are buying is a two bed house. The fact that someone has decided that a basement is suitable for sleeping in doesn't make this into a 3 bed house. This house is a 2 bed house with a big basement. You need to check that you are not paying for a 3 bed house because this is not a 3 bed house it is a 2 bed house. The floor plan will be that of a two bed house not a 3 bed.

DeclanRandall

Thanks for the advice, everyone.

I should have mentioned that the basement conversion definitely is a conversion - because of the layout of the site, it's only underground on one of four walls, and its exterior walls are the same age as the rest of the house. I think it used to be a garage or storage area before it was converted. It's certainly not been added after the rest of the house, so I'm not concerned about foundations, although damp is still a concern.

I'm going to email my solicitor suggesting option b), and saying to pass it on to the seller if she thinks it's a good idea. I might try and get them to pay for the re-valuation, too...

I'll post back here when I have more news.

Browntoa

Never ceases to amaze we why some people carry out building work without regs when they are going to need to sell it at some point . There was another recent thread where the house had been converted into flats without planning , building regulations etc

DeclanRandall

Well, by the time I managed to get in touch with the seller (long story), they'd decided that they're going to try and get a certificate of regularisation from the council. So it looks like option a) is going ahead!

My plan at the minute is to keep looking for other houses while they get that sorted; if I find somewhere which seems better, I'll drop out (don't feel bad for them - they'll need that certificate whoever buys it, now they've notified the council); if I don't, I'll be able to get this house at my previous offer. I'll update this thread again when one of those has happened.

Thanks for your advice.

Hoploz

Well that is good news - I think - for you anyway. For the seller, sounds like a minefield but if it's just a simple conversion as you believe then hopefully it'll be ok. It coud be that they had informed building control along the way but for one reason or another it wasn't signed off.

Before you gave details I was envisaging some damp dark low-ceilinged cellar with no light or ventilation being used to store grandma in! Fingers crossed! Hope they can get it done quickly.

DeclanRandall

I thought I'd better close off this thread, in the spirit of xkcd 979.

What happened next:

The sellers, after talking to the council, were very surprised by how expensive it would be to get a certificate of regularisation. They changed plans and decided to get a building regulations indemnity policy instead. I was pretty skeptical that this would be possible - as I understood it, having talked to the council, they'd have to commit fraud to get the policy - but their solicitor managed to get one!

I tried to negotiate a small reduction on the price, saying that I hadn't known about the building regulations issue when I'd made the original offer - completely true, and the reduction was in line with the cost of getting the certificate of regularisation. I'm not sure what the agents passed along to the sellers, but I got the distinct feeling that they felt I was just trying to squeeze them late in the game, and they came back to suggest a reduction half the size... which I accepted. I don't like feeling like the bad guy, but all's fair in love & house-buying, right?

Our solicitor got that new amount confirmed by our lender, Nationwide, including the upsetting news that apparently they didn't actually need the indemnity policy, so all that fuss was for nothing!

The sale has gone through and we've moved in happily....

... BUT - a word of warning! The building regulations issue was a warning sign. Now that we've had a good look at the place, there's a lot of things which have been done shoddily & badly. Leaking shower drains, badly-sealed tiling, very questionable electrics, unbacked kitchen cabinets, the world's cheapest and least-efficient boiler, and uninsulated central heating pipes in the walls (which means they creak continuously when the heating's on). Nothing anywhere near bad enough to make us regret the purchase, but a lot of things to fix, which we could possibly have spotted beforehand (and prepared for) if we'd realised.

Anyway, I hope this thread is useful for someone in the future. I've got a lot of things to do!