Indemnity Policy

peppapiglet

Hi there

Just after a bit of advice if possible.

I am currently selling and buying a house and this has been progressing okay. Early on in the process, my solicitor rang to inform me that there was some kind of covenant which was referred to but could not be found. I was advised that I would need to take out an indemnity policy to cover this, which I did, at a cost of £150.

Things carried on and we are almost at exchange. Solicitor rang me again today to say that the environmental search had just been received and had flagged up potential land contamination. I was quite surprised at this as I was under the impression that all the searches were back a while ago (solicitor was instructed on 10th August). We have lived here for 28 years and have never heard anything about the possibility of contaminated land; I presume that when we bought years ago these searches weren't performed?

Anyway, she advised that we take out an indemnity policy (at a cost of £156). When I queried if this was absolutely essential, she said she could tell the buyers solicitors that we were not aware of any problems and ask them to meet us half way and pay £75 each - not sure if they will go for this.

I did a bit of searching around myself and ended up on Manchester City Council website with the following information:

"We maintain a contaminated land public register of certain information relating to the remediation of contaminated land and not a list of former industrial sites or a record of land which is being investigated.
There is only one area of land within the city boundary that has been formally remediated and cleaned up.
A public register entry is created when any of the following happens:

• the land is designated as a 'Special Site' (in which case the Environment Agency becomes the relevant enforcing authority);
• a 'remediation declaration' is published;
• a 'remediation statement' is published; or
• a 'remediation notice' is served."

When I enter my post code into the "contaminated land public register" I get the response "sorry, no matches were found", but I realise that this just means none of the above apply.


I have emailed the solicitor asking if she can email me a copy of the search report, to see if this throws any more light on it but she has not responded yet.


Obviously, if this is going to be deal breaker then we will get the policy, but just wondering if it is absolutely essential. I don't want the buyers freaking out thinking the house is built on a time bomb.


The house is 80 years old and is in one of 3 streets of private houses, sandwiched between 2 large council estates.


Any ideas any one?


Thank you


PP

G_M

You could instruct your solicitor to inform the buyer you have lived there perfectly happily, and safely, for 28 years and see no need for an indemnity policy. If the buyers want one, they can buy one.

The buyers will then either
* buy you property as agreed and without an indemnity policy
* buy a policy and then buy the property
* negotiate and try to pursuade to to pay for all or part of the policy
* walk away and start house-hunting all over again

peppapiglet

Thank you GM

So am I right in thinking that there is choice in the matter, i.e. if the buyer's don't feel the need to have the policy it isn't something the solicitor can insist on?

PP

G_M

The buyer's mortgage lender (if there is one) may insist.

Sootoo

I'd say it's up to the purchaser to buy if they feel it's necessary because it's them who will benefit from it and probably their mortgage lender who will insist on it if it's required.

davidmcn

Without knowing more about the "potential land contamination" it's hard to say - if I were buying I'd want more information about that rather than just get insurance. The lender may have the same attitude.